When Governor Jerry Brown signed a $156.3 billion spending plan on June 20, housing advocates across California had many reasons to be enthusiastic. The Fiscal Year 2014-15 state budget contains several steps in the right direction for expanding affordable, sustainable rental housing options for Californians. The new budget also provides a long-term framework for housing funding through future cap-and-trade auction revenues.
The legislature passed a budget that includes four major housing victories. First, $100 million in new funding was allocated for the Multifamily Housing Program at the California Department of Housing and Community Development. Half of this allocation will be devoted to supportive housing developments. Although $100 million is less than the $200 million requested by California Assembly Speaker Toni Atkins, it is significant because it is the first general fund allocation for the Multifamily programs in more than a decade.
The second budget victory is a $75 million allocation for weatherization and renewable energy. Third, at least $65 million is allocated for affordable housing in transit-rich areas to reduce housing and transportation costs while also reducing environmental impacts.
Finally and significantly, agreement was reached establishing a 10% set-aside of cap-and-trade auction revenues for affordable housing that reduces greenhouse gases. Cap-and-trade auction revenues are a relatively new funding source for affordable housing programs. California’s Global Warming Solutions Act of 2006 created a cap on aggregate greenhouse gas emissions from entities responsible for roughly 85% of California’s air pollution. Based on this cap, the Air Regulations Board now holds quarterly auctions to sell allowances for emission standards. This process is known as cap-and-trade. Under California’s 2012 law guiding the use of these funds, 25% of revenues must go to programs benefitting disadvantaged communities. With cap-and-trade auction proceeds estimated at $2 billion each year, the 10% set-aside is expected to generate more than $2 billion in sustainable affordable housing over the next six years (see Memo, 5/23).
This victory was the result of intensive advocacy by a broad coalition of California organizations that includes the California Housing Partnership Corporation, Housing California, Southern California Association of Non-Profit Housing, California Coalition for Rural Housing, and the Non-Profit Housing Association of Northern California, all NLIHC State Coalition Partners.
The Rural Smart Growth Task Force, a coalition of groups committed to the use of cap-and-trade dollars for affordable housing and sustainable communities projects statewide, gained key language in the budget. That language requires cap-and-trade proceeds to be available to support any affordable housing that reduces greenhouse gas emissions, including projects near transit, that reduce vehicle miles traveled or reduce reliance on fossil fuels.
Much of the budget advocacy effort was coordinated by leaders of the Homes and Jobs Act campaign, an ongoing effort to pass legislation that will generate additional revenue for affordable housing development through the creation of a document recording fee for real estate transactions and notices. The work of the Homes and Jobs Act campaign educating legislators about the importance of expanding affordable housing was a key stepping stone toward success in the state budget. Their efforts were joined by the Green Rental home Energy Efficiency Network (GREEN), a coalition working to expand housing energy cost reduction.
Michael Lane, Policy Director of the Non-Profit Housing Association of Northern California, stated that they are pleased with the results of this budget, but will continue to fight for bigger victories in the coming year. “We are very grateful to our members and other affordable housing advocates across the state who demonstrated great persistence and tenacity over the past two years in pushing for state funding sources. These wins are due to those efforts and thanks to our key champions in the legislature, Senate President Pro Tem Darrell Steinberg, Assembly Speaker Toni Atkins, and Senator Mark DeSaulnier.”
“The 2014-15 state budget investments will keep California builders working in the coming year to provide safe and affordable homes and keep our economy moving,” said Shamus Roller, Executive Director of Housing California. “These funds are part of the solution, and our work continues to secure ongoing state investment in affordable homes.”
Looking ahead, California advocates will continue to push for new and expanded funding sources for these essential affordable housing programs, and will work to set strong implementation standards for new cap-and-trade funds. The recent focus on building new housing that is energy efficient has been attractive to lawmakers looking to reduce household utility costs and protect the environment while addressing the shortage of affordable housing.
For more information, contact Michael Lane, Policy Director, Non-Profit Housing Association of Northern California, email@example.com or Shamus Roller, Executive Director, Housing California, firstname.lastname@example.org.