The United Voice for Affordable Housing

INDUSTRY INSIGHT JUNE 2023

NOTE FROM THE EXECUTIVE DIRECTOR

"Our work to build a lasting coalition of labor, environmental, and housing advocates continues to bear fruit."

It is the first full week of June—just past the halfway point of this year’s legislative session—and the good news is all of CHC’s sponsored bills have passed out of their house of origin and are continuing to advance. The Governor is sending signals that he is in support of many of these bills. And our work to build a lasting coalition of labor, environmental, and housing advocates continues to bear fruit.

Over the next two weeks, though, all of that will take a backseat to the budget, which must be finalized by June 15.

CHC and our partners have been working with legislative leaders and the Governor’s office for months, pushing for ongoing affordable housing investments that match the scale of the state’s housing challenges. The Governor recommitted to these goals in his May Revise, maintaining $1.5 billion for critical affordable housing programs even as the state faces a projected $32.5 billion budget deficit.

Both the Assembly and Senate have proposed expanding on the Governor’s housing investments—with the Assembly promoting a boost to MHP funding and the Senate backing a proposal to double the size of the state housing tax credit and set aside more flexible funds for HCD.

These are good ideas, and we will be pushing for a final budget deal that includes every one of them.

We recognize, though, that with the state’s fiscal situation unclear, this may not be a year when state leaders will be able to support all of the state’s successful affordable housing programs—even if they recognize economic downturns are precisely the times when affordable housing is most needed.

All of which only underscores the importance of AB 1657 (Wicks), the $10 billion housing bond now moving toward the March 2024 ballot, which could greatly expand the state’s ability to get more affordable housing built, without a big hit to the budget. The Assembly overwhelmingly approved the bill last week, and it now moves to the Senate, where we will be working closely with our partners to ensure it helps every community build more of the affordable homes Californians need.

Thank you, as always, for your support.

Sincerely,

Ray Pearl, Executive Director

IN CASE YOU MISSED IT

The Legislature is gearing up for final budget negotiations with the June 15 deadline looming. Over the last six weeks, we have seen different proposals from the Governor, the Assembly, and the Senate. CHC is advocating for the highest possible funding among all three proposals.

Governor Newsom announced an 11-bill CEQA reform package saying the legislation was critical to accelerating construction of critical energy infrastructure projects across the state. No affordable housing proposals were included in the package, however, an omission noted with concern by many housing advocates.

LEGISLATIVE ROUNDUP

All five of CHC sponsored bills passed out of the first house and are headed to the second house ahead of floor deadlines.

SB 423 (Wiener) will extend and strengthen SB 35’s streamlining provisions and remove the sunset on SB 35 (Wiener). The bill passed out of the Senate with a vote of 29-5.

SB 439 (Skinner) will strengthen existing protections for affordable housing projects by providing additional remedies to curtail non-meritorious litigation that can delay or kill projects even after they secure local approval. The bill passed out of the Senate with a vote of 39-0.

SB 440 (Skinner) will empower local governments to join forces to create regional housing finance agencies to address the unique affordable housing needs in their communities. The bill passed out of the Senate with a vote of 30-8.

AB 1307 (Wicks) will reverse a troubling, recent court decision relating to unamplified human noise under the California Environmental Quality Act (CEQA). The bill passed out of the Assembly with a vote of 77-0.

AB 1449 (Alvarez) will facilitate the development of affordable housing by exempting from CEQA certain 100% affordable housing projects throughout California. The bill passed out of the Assembly with a vote of 54-13.

Please take action today by placing your letterhead on each of CHC's sample support letters and uploading them onto the Legislative Position Letter Portal, and sending copies to our Policy Associate, Jennifer Armenta, at jarmenta@calhsng.org.

CHC is supporting other priority housing bills, view our bill tracker to see real time updates.

View our Bill Tracker

SAVE THE DATE!

AFFORDABLE HOUSING NEWS OF THE MONTH

Can ‘social housing’ help solve California’s housing crisis? (San Jose Mercury News)

‘A nothingburger’: YIMBY activists frustrated by Gov. Gavin Newsom’s plan to reform CEQA (San Francisco Chronicle)

Tax on short-term rentals like Airbnb could fund California affordable housing (CalMatters)

EDITORIAL: A key law creating affordable housing in California cannot be allowed to expire (Sacramento Bee)

OPED: California’s most successful affordable housing law really works. But the state will lose it if we don’t act now. (Los Angeles Daily News)

FEDERAL UPDATE FROM DAVID GASSON

It is always my goal to end any presentation or update on a positive note so I will discuss the recently reintroduced Affordable Housing Credit Improvement Act later in this update. Let us begin with the continuing drama of the debt ceiling, the deal that has been negotiated and the potential results of the agreement.

Maintaining his reputation as a deal maker, President Biden has negotiated a debt ceiling increase with Speaker Kevin McCarthy. We are just getting the details of the deal but, as expected, there are plenty of unhappy legislators on both sides (the definition of compromise) and the final terms of the agreement have yet to be debated in either the House or Senate. What appears clear is that it is a compromise between the demands and desires of both the President and House Republican’s and if agreed upon by the Congress, would be a significant win for Speaker McCarthy and his first real legislative accomplishment. It would also preserve many of the legislative initiatives the President won in 2021 and 2022 with the Bipartisan Infrastructure Bill, the CHIPS Act and the Inflation Reduction Act.

Of greatest concern to the affordable housing industry are potential cuts to non-defense and non-discretionary spending (translation: HUD appropriations). The proposal would level fund FY 2024 appropriations at FY 2023 levels and cap the FY 2025 appropriations at a 1% increase. For the HUD budget in FY 2024, this would result is a significant shortfall and necessitate cuts in programs just to sustain Section 8 and PBRA levels. Analysis on the actual funding levels is ongoing but it is obvious those that rely on assistance in the form of vouchers or other programs at HUD will be adversely affected by these cuts.

CHC MEMBER SPOTLIGHT

In 2017, Senator Wiener’s SB 35 was signed into law to boost the production of affordable and mixed-income housing by streamlining housing approvals in cities that were not keeping pace with their state-mandated housing goals. This CHC supported bill has been enormously successful at increasing affordable housing production—helping develop over 13,000 units of affordable housing in the four years since it went into effect.

This is why CHC is co-sponsoring SB 423 (Wiener), which will extend SB 35 provisions beyond 2025—and strengthen the law, so it can continue to accelerate the development of affordable housing every community needs.

Featured below are examples of CHC-member developments that have benefited from SB 35: