To balance $27 billion shortfall, the state could chop funds for homelessness housing and office conversions.
With a $27 billion shortfall looming over the state, Gov. Gavin Newsom is eyeing a total of $1 billion in cuts to several housing programs aimed at financing and preserving existing affordable housing.
“There are components of our housing strategy where we are making adjustments, but the core mission remains firm,” Newsom said during a press conference announcing his proposed budget Friday.
Here are the housing programs where Newsom sees potential cuts:
— Eliminating the Multifamily Housing Program, including the remaining $75 million in 2023-24 for this program, as well as $250 million in proposed funds, which provide low-interest loans to build low-income housing.
— Reducing funds for the Homeless Housing, Assistance and Prevention Grant program from $1 billion to $740 million. Cities and counties use the grants to build permanent affordable housing and interim transitional housing.
— Ending the Foreclosure Intervention Housing Preservation Program, a program created in 2021 that gave nonprofits and community land trusts loans and grants to purchase foreclosed properties. The budget appropriated $500 million through June 2027, but Newsom froze the program in January 2024 before any of the money could be spent.
— Ending the Adaptive Reuse Program — renamed the Infill Infrastructure Grant Program — created in 2022 in response to excitement over potential office-to-residential conversions. The program was originally funded with $400 million aimed at giving grants to projects adapting and rehabbing underutilized commercial buildings.
The only new funding Newsom noted was an additional $500 million in state low-income housing tax credits, doubling the current amount.
Despite slashing multiple programs to build new housing, Newsom reaffirmed the state’s commitment to addressing homelessness — notably through the additional $6.4 billion to be generated via Proposition 1, approved by voters in March, which is set to increase the number of treatment beds and supportive housing facilities.
“There’s more investment for housing the homeless than ever,” Newsom said.
