Governor Newsom has released his new state budget, which benefits from a large surplus. Here are the highlights that impact housing:
$500 million in State Low Income Housing Tax Credits
$500 million for the Infill Infrastructure Grant Program
$750 million for Project Homekey
$750 million to enhance the continuum of behavioral health treatment facilities
$250 million for senior residential facilities
INFILL INFRASTRUCTURE GRANT PROGRAM The Budget includes $500 million General Fund for the Infill Infrastructure Grant Program to accelerate economic recovery through the creation of jobs and long-term housing development. The Administration is asking the Legislature to take early action on $250 million of the Infill Infrastructure Grant investment in 2020-21. This will provide needed funds for investments that will stimulate housing construction as developers navigate a housing market impacted by the COVID-19 Pandemic. Furthermore, the proposed investment could be available for housing projects that also include necessary site remediation, ultimately unlocking additional sites for affordable housing, and enhancing the state’s broader environmental and equity goals.
LOW-INCOME HOUSING TAX CREDITS Tax credits attract private investment in affordable housing by offering a dollar-for-dollar credit against an investor’s state or federal taxes owed. The 2019 and 2020 Budget Acts authorized an additional $500 million in low-income housing tax credits each year. To maximize the allocation of these credits, the California Tax Credit Allocation Committee and the California Debt Limit Allocation Committee adopted regulations aimed at increasing affordable housing production, containing costs, and maximizing public subsidy and benefit of the credits. To continue this valuable investment in affordable housing production, the Budget proposes a third round of $500 million in low-income housing tax credits. This will further reduce funding gaps in affordable housing units statewide.
EXCESS STATE LAND DEVELOPMENT The Administration is committed to using excess state lands more effectively to address the housing crisis. The state has solicited affordable housing developers to build projects that use innovative, creative, and streamlined approaches to build affordable housing on identified state excess lands. Currently, three projects are underway in Sacramento, Stockton and South Lake Tahoe, and the state has an additional nine sites in the pipeline in the coming calendar year. The Budget proposes statutory changes to encourage additional innovative development, including authorizing market-rate and commercial development that will provide flexibility and financial feasibility to subsidize fair and affordable housing production on excess lands.
More info: Budget Summary (ca.gov)