🏡💚 Budget proposal 'deeply troubling' for housing & climate
January 12th, 2024
In California state policy, the new year sure comes at you fast. Just as most of us are coming back from holiday breaks (where hopefully there was some time to rest and relax), we’re almost immediately hit with the highly anticipated yearly spectacle that is the Governor’s January budget proposal.
Given the Legislative Analyst Office’s report released in December predicting a $68 billion deficit, many were preparing for the worst and bracing for deep cuts to important programs and services. And while the Governor’s budget estimates a significantly less severe deficit of $38B this year, many of the proposed cuts are targeted toward recently hard-won programs and legislative efforts.
Since there are many other more comprehensive budget breakdowns out there (see CalMatters breakdown here), as well as those focused on various sectors, I’ll use this newsletter to highlight a few ways this proposed budget could impact green social housing priorities:
SB 555 Implementation: ??? - SB 555 passed last year as the first state-level social housing legislation in the country, directing the state to study the role that social housing could play in addressing the housing crisis. The Department of Housing & Community Development (HCD) was charged with implementing this study, which will require staff time and resources. In his budget announcement, Governor Newsom said that the deficit justified holding back funding to implement new laws, and there is significant concern that this will prevent the necessary agency staffing at HCD and cause a delay in the study, which already is not required to be completed until the end of 2026. (Many environmental groups have a similar fear about the implementation of SB 253 and SB 261.)
Foreclosure Intervention Housing Preservation Program (FIHPP): Cut by $247.5M - Championed by community land trusts (CLTs) in 2021, FIHPP was created as a $500 million program providing loans and grants to nonprofits purchasing and rehabilitating buildings at foreclosure auction, in the foreclosure process, or at risk of foreclosure. This supports the preservation and rehabilitation of affordable housing units, with CLTs set to play a major role in implementation.
After receiving a $15M cut last year, this year’s cut represents over half of the remaining funds for the program. As stated in their press release, the California Community Land Trust Network and its members have put an enormous amount of effort into developing the program, only for it to receive drastic cuts at this critical moment. This is a significant setback for an affordable housing preservation program that was just getting off the ground.
Equitable Building Decarbonization program (EBD): Cut by $283M - I’ve written previously about the potential scale and impact of this direct-install program for low-income residents (and the risks a poorly designed program could have for tenants). The GND Coalition and many partners have done a significant amount of policy and organizing work to advocate for funding and designing this program to be equitable, to protect tenants, and to create good jobs. Similar to FIHPP, just as this program is about to get off the ground, this year’s proposed cuts threaten to undermine much of the progress that’s been made. The Governor is hoping that these cuts can be backfilled by money from the federal Inflation Reduction Act, but it’s unclear if that will be possible, and is nevertheless unfortunate to see federal investments being used to justify cuts to state programs.
Housing Programs at large: Cut by $1.2B - Overall, the proposed budget included drastic cuts to a wide range of housing programs. A coalition of housing advocates issued a statement calling the proposed budget “deeply troubling,” estimating that these cuts would reduce annual construction of new affordable homes by one third (eliminating potential for 6,400 affordable homes), result in tens of thousands of individuals without homes, lost jobs and economic opportunity, and the loss of $1.6 billion in federal housing resources.
The other thing that I made note of during the Governor’s presentation was his continued vocal opposition to raising new revenue through taxes. This is a consistent theme of Newsom’s approach to the budget and his political orientation — one that poses a major challenge to campaigns aiming to make structural and transformative changes in the state. Actual solutions to the housing and climate crises will require unprecedented action by the public sector—state, regional, and local—and will require significantly more resources than we currently have available. As we consider this green social housing campaign going forward, we will have to grapple with the questions of revenue and funding, and the political conditions that will fight against our answers.
None of the Governor’s budget proposal is set in stone, and as always this is just the beginning of a months-long negotiation where advocates will have opportunities to pressure legislators and the Governor’s Office to change course. But it will be an uphill fight this year, one that I know many of you are already fighting.
Governor Newsom announcing his 2024-25 January budget proposal. Source: CalMatters
WHAT WE’RE READING
Rising Utility Costs Compound California's Housing Crisis (KQED) — adding this to my backlog of things I will write about in future newsletters!
In Yuma, farmworkers' struggle with heat is worsened by inadequate housing (AZ Republic) — the poor condition of farmworker housing provides a stark example of how frontline workers simultaneously bear the brunt of the climate and housing crises
Berkeley’s gas ban is all but dead. What does that mean for other cities? (Grist) — the latest decision by a federal appeals court has big implications for how cities ensure new buildings are fossil-free
How mobile home co-ops provide housing security — and climate resilience (Grist)
State’s end-of-year affordable housing bonanza likely to leave dozens of near-ready projects ‘mothballed’ (CalMatters)
CA Building Decarbonization: Progress Report & 2024 Priorities (NRDC) — great overview of building decarb work in 2023 and some ideas for what can be done this year
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