California Enacts $308 Billion State Budget, Falling Short of Advocates’ Proposed Housing and Homelessness Investments

California Governor Gavin Newsom (D) signed a $308 billion state budget on June 30 that commits nearly $5 billion to housing and homelessness programs for fiscal year (FY) 2022-2023. Despite making several significant investments, the budget does not include the long-term resources that many advocates, including NLIHC state partners, have proposed for addressing the state’s housing crisis.

“In poll after poll, Californians consistently identify housing affordability and homelessness as their top concerns,” said Chris Martin, policy director of Housing California, an NLIHC state partner. “Homeowners, renters, and unhoused people looked to Sacramento for long-term solutions, not just short-term fixes. Unfortunately, our leaders in the Capitol did not answer the call to meet the moment. . . . While the 2022-23 state budget contains some noteworthy expenditures, it invests only a fraction of the resources required to protect tenants, preserve communities and existing affordable housing, produce new affordable housing, and end homelessness.”

Governor Newsom’s initial budget proposal, released on January 10, contained $4 billion for affordable housing and homelessness programs (see Memo, 2/7). While advocates welcomed these proposed resources, they also highlighted the need for further long-term investments that align with the Roadmap Home 2030, a comprehensive framework of equity-centered, evidence-based policy solutions for creating structural change in California’s approach to housing and homelessness over the next decade (see Memo, 4/19/21). Despite entering budget negotiations with a projected $97.5 billion surplus, the final FY22-23 state budget devoted under $5 billion to housing and homelessness – a fraction of the funding required to meet the scale of the need, which the Roadmap Home 2030 estimates at $17.9 billion annually.

California's final FY22-23 budget includes the following investments in housing and homelessness:

  • $1.5 billion for Behavioral Health Bridge Housing, which provides interim housing for people experiencing homelessness who have behavioral health conditions.
  • $700 million for the Encampment Resolution Grants Program, which supports local jurisdictions’ efforts to implement short- and long-term housing solutions for people experiencing homelessness in encampments.
  • $500 million for the state Low-Income Housing Tax Credit program.
  • $425 million for the Infill Infrastructure Grant Program over two years, which accelerates development for qualifying infill projects in brownfields and downtown-oriented areas.
  • $410 million for adaptive reuse, which will facilitate conversion of commercial buildings into affordable housing.
  • $325 million over two years for the Multifamily Housing Program (MHP), which finances the construction, acquisition, rehabilitation, and conversion of affordable rental homes.
  • $250 million for the Housing Accelerator Program, which will be used to fund the backlog of shovel-ready projects that have received funding under other Department of Housing and Community Development (HCD) programs.
  • $150 million over two years for the preservation of existing affordable housing.
  • An additional $150 million for Homekey, which funds hotel and motel conversions.
  • $100 million over two years for the Veterans Housing and Homelessness Prevention Program created by Proposition 41 in 2014.
  • $30 million for legal aid to prevent evictions.

Advocates also criticized the budget’s focus on short-term responses to homelessness, rather than long-term investments. The budget dedicates more than $2 billion to temporary measures – interim housing and encampment resolution – that do not address the severe shortage of affordable homes that is at the root of California’s homelessness crisis.

Going forward, advocates will continue to press for further resources that meet the state’s need for robust, sustained investments in housing stability.