Little Hoover Commission backs creation of California Housing and Homelessness Agency, drops proposed licensing reforms

SACRAMENTO — The Little Hoover Commission voted May 29 to endorse the governor's reorganization plan to create a California Housing and Homelessness Agency and related housing governance changes, while removing several contested recommendations on occupational licensing.

The commission adopted the core recommendation that the state create two agencies to consolidate housing and homelessness responsibilities and approved five companion recommendations focused on stakeholder feedback, streamlined application processes and staff development. Commissioners agreed to remove recommendations that would have created an independent fee-setting commission and other structural licensing changes after probing questions and public concern.

The commission's action followed roughly 30 minutes of public comment, mostly from housing and allied organizations. Marina Espinosa of the California Housing Consortium said the group supported the reorganization but urged the state to fund programs captured by the plan: "This effort will only be a meaningful culture shift and change in operation practices within the new agency, and it's also critical that resources be allocated to the state's housing programs."

Sheila Nicolopoulos, director of policy and legislative affairs at the San Francisco Mayor's Office of Housing and Community Development, urged the commission to preserve elements of existing agencies that work well, saying TCAC and CDLAC are "staffed by housing finance experts oriented to the market" and that a new agency should "embrace these ideals." Alex Rogala, policy manager at MidPen Housing, said the current system is "fragmented, lacks consistent goals, and is subject to bureaucratic delays," and called the reorganization "long overdue." Several other nonprofit housing developers and advocates, including Courtney Powell of Resources for Community Development and Galen Dobbins of the California Coalition for Rural Housing, expressed similar support for a unified financing and application system.

Not all public comments supported every part of the draft. Lucas Evenson, speaking for the California Medical Association, and Mary McCune of the California Dental Association asked the commission to remove or clarify recommendations that would change how professional boards handle enforcement, fee-setting, and board composition. Evenson warned the report did not account for the "potentially significant new costs" of creating a separate enforcement body, and McCune urged that complaint data be shared only in aggregate, de-identified formats.

Commissioners debated both the housing reorganization and the licensing proposals. Commissioner David Beyer framed the licensing items as part of a broader economic concern: occupational licensing now covers a much larger share of jobs than in mid-20th century and can have economic effects, he said. Several legislators on the panel, including Senator Cabaldon, urged urgency for the housing components and cautioned that the proposed timeline could delay the one-stop application and delivery system advocates say is needed immediately.

After discussion the commission split its action into steps. Commissioner Gil Garcetti moved — and Commissioner Miller seconded — a motion that the commission agree with the administration on creating two agencies; that motion passed on a roll call. The commission then voted to adopt recommendations 1 through 5 (which include establishing a stakeholder feedback mechanism, pursuing alignment of application and review processes, and prioritizing staff development), with added language urging the administration to move quickly, pursue economies of scale and savings, and not let the reorganization delay implementation of a unified application system. Finally, a motion by Commissioner Beyer to delete recommendations 6 through 9 (which addressed creating an independent enforcement body, an independent fee-setting commission, and changes to board composition and complaint reporting) passed; the report was adopted with those four recommendations removed.

Ethan (staff member) briefed commissioners on schedule constraints: the report must be delivered to the governor and legislature under a statutory deadline the commission noted would fall the week after the meeting. Commissioners asked staff to add a few sentences emphasizing urgency and efficiency; staff indicated they could incorporate minor language changes approved by the chair and vice chair without another full meeting.

The commission's decision leaves intact the central reorganization recommendation to create the California Housing and Homelessness Agency and the proposed housing development and finance committee, while removing controversial licensing recommendations that had drawn opposition from medical and dental professional associations. The commission also asked that, to the extent possible, the administration move forward with a single application and unified funding process before the formal creation of the new agencies.

The Little Hoover Commission will transmit the adopted report to the governor and Legislature under its statutory schedule; commissioners and staff said they expect to add the agreed-upon minor language about speed and economies of scale prior to submission.

Ending: The commission completed action on the reorganization item and moved on to a separate report on public-philanthropic partnerships later in the meeting.