Governor’s May Revision Shows Bold Leadership To Address Homelessness, Increase Affordable Housing

Governor Gavin Newsom’s May Revision to the 2021-22 state budget shows bold leadership to resource critical affordable housing and homelessness policy solutions. We urge legislators to build on the Governor’s May Revise with additional sustainable investments to scale our response to support a strong, thriving, equitable California ahead, for every community member no matter their race or income. There is a historic environment around us on all sides — a historic budget surplus and a historic level of investment toward homelessness and affordable housing solutions in the May Revise — and yet a historic community need and racial inequities remain especially as we emerge and recover from COVID-19. NPH is urging lawmakers to advance the May Revision while also looking for opportunities to scale. 

Context: A Historic Surplus and Unprecedented Needs

In light of the historic state budget surplus of $75.7 billion, there has never been a more opportune time for our state to prioritize desperately needed homelessness relief and affordable housing production. This becomes even more true with the unprecedented needs in our communities for COVID-19 relief and recovery, and the disproportionate impacts on Black, Indigenous, Latinx, Asian and other communities of color. 

Housing is essential to COVID-19 recovery and is the foundation for our state’s well-being and success ahead. Affordable homes are critical in helping our neighbors and communities get back to work, getting and keeping people housed, and ensuring that we’re prepared for the next emergency. It’s clear that affordable housing serves a key role in helping our state move through and emerge from the economic and public health crises brought on by the COVID-19 pandemic.

What’s in the May Revision

The following are NPH’s Policy Priorities compared to the housing and homelessness items contained in the Governor’s May Revision to the 2021-22 state budget proposal:

NPH Priority: $20 billion over 5 years for various homelessness prevention programs and services with the spending modeled after the principles adopted by the Bring California Home Coalition.

• What’s in the May Revise: $7 billion over two years for Project Homekey
  • NPH Analysis: As members of the state Senate and Assembly called for a $20 billion investment to address homelessness, and Mayors called for $16 billion, NPH sees the $7 billion investment as a critical downpayment with more investments needed. While Project Homekey has been a groundbreaking and successful program (the state’s response to protecting Californians experiencing homelessness who are at high risk for serious illness and are impacted by COVID-19), going forward more flexibility is needed to use other models that can address homelessness. For example, the model called for by the Bring California Home Coalition calls for statewide, sustained funding needed to end homelessness.

NPH Priority: $13 billion to be spent on the construction of new affordable housing, including $3 billion to build stalled California Department of Housing and Community Development (HCD) funded projects (4,000 of which are in the Bay Area) and $10 billion to fund affordable housing production in our state through the multi-family housing program, farmworker housing programs, down payment assistance, affordable homeownership, and low income weatherization programs.

• What’s in the May Revise: $1.75 billion for stalled HCD projects
  • NPH Analysis: This is a strategic investment that will make significant inroads in getting stalled HCD projects built immediately. Given the budget currently has a historic surplus, we urge lawmakers to ensure additional investments so that all of the shovel-ready affordable housing advances in the HCD  pipeline. Californians need sustained investments and affordable homes now.

NPH Priority: $18.5 million to set up the Bay Area Housing Finance Authority (BAHFA) (created in 2019 by AB 1487 (Chiu) to provide the 9-county Bay Area with regional housing infrastructure) and launch the five pilot programs.

• What’s in the May Revise Budget: Will be pursued through the Legislature.
  • NPH Analysis: BAHFA needs funding for the Bay Area to set up regional infrastructure and programs to realize local and regional comprehensive solutions to our housing and homelessness crisis

NPH Priority: $500 million to acquire and rehabilitate “naturally” occurring affordable housing and convert them into permanent affordable homes.

• What’s in the May Revise: Not directly addressed, but the $7 billion for Homekey could potentially be used for this.
  • NPH Analysis: It’s possible that some of the $7 billion in the budget for Project Homekey could be used to help rehabilitate “naturally” occurring affordable housing

What Now?

NPH applauds Governor Gavin Newsom for the May Revision’s historic investment toward homelessness solutions and the construction of new affordable homes. We urge state lawmakers to advance the May Revision as well as continue to pursue immediate and sustained efforts toward addressing our state’s unmet homelessness and affordable housing needs, especially during the unprecedented time of COVID-19 recovery. 

You can make a difference. Learn about NPH’s policy work and endorse our legislative slate today.