California is establishing a new state agency dedicated solely to housing issues, addressing the state’s persistent housing crisis. Governor Gavin Newsom proposed earlier this year to divide the Business, Consumer Services and Housing Agency into two separate entities: one focusing on housing and homelessness, and another for other operations. The Legislature had until July 4 to veto the plan, but it went unchallenged, allowing the formation of the new agency to proceed.
The new agency aims to streamline the complex network of affordable housing programs in California. Currently, developers navigate multiple state organizations to access loans, grants, and federal tax credits. The reorganization seeks to simplify these processes, although major funding sources managed by the state treasurer will remain unchanged due to constitutional constraints.
Supporters, like Ray Pearl of the California Housing Consortium, view this move as a crucial first step in addressing housing issues. “A cabinet-level secretary who will sit with other cabinet secretaries, whose purview will be housing… that is elevating the agenda to the highest level,” Pearl said. However, some, including Senator Christopher Cabaldon, express skepticism about the impact of the reorganization, questioning how it will lead to tangible improvements.
The new agency will include existing housing-related entities and a new Affordable Housing Finance Committee to coordinate subsidy programs under the governor’s control. Despite these changes, the Little Hoover Commission, an independent oversight agency, highlighted the need for a unified application process for affordable finance programs, a goal yet to be addressed by the governor or the state treasurer.
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