Little Hoover Commission hears debate over governor’s plan to split BCSH and create California Housing and Homelessness Agency

The Little Hoover Commission on Wednesday, April 23, heard testimony on Gov. Gavin Newsom’s proposal to split the state’s Business, Consumer Services and Housing Agency and create a stand‑alone California Housing and Homelessness Agency (CHHA), plus a new Housing Development and Finance Committee to centralize developer‑facing financing.

Tamika Moss, secretary of the Business, Consumer Services and Housing Agency, told commissioners the proposal “will create the necessary organizational structure to advance our housing and homelessness goals” and argued that a cabinet‑level housing secretary would be able to focus attention and coordination across departments.

Why it matters: supporters say the change could shorten a fragmented financing process that developers blame for delays and higher per‑unit costs; critics and some commissioners pressed the administration for numbers on the cost of standing up a new agency, how it would interact with the treasurer’s offices that oversee tax credits and bonds, and how success would be measured.

Most important facts

- The administration proposed splitting BCSH into two agencies and creating a Housing Development and Finance Committee to centralize many state affordable housing finance programs and set a single application process.

- Secretary Tamika Moss and HCD Director Gustavo Velasquez said the change is intended to speed construction and lower costs. Velasquez told commissioners the agency’s goal is to “produce more homes, faster, cheaper.” The department reported it has helped fund nearly 60,000 affordable homes in recent years but acknowledged the state remains well short of the target used by planners (2,500,000 homes over the next eight years).

- Commissioners repeatedly pressed the administration for a cost estimate for creating two cabinet agencies and the committee. Moss said specific budget figures would be presented in the governor’s May Revision and that the administration has worked to minimize startup costs, but she did not provide a year‑one total at the hearing.

- Several academic and policy witnesses, including Ben Metcalfe and Sarah Karlinsky of the Turner Center at UC Berkeley and a Spur research team, told the commission state data show each additional public funding source for an affordable housing project is associated with months of delay and higher per‑unit cost. The Turner Center cited roughly $20,460 in added per‑unit cost and four months of delay per additional funding source in its analysis of multifamily projects (2020–2023).

- Multiple witnesses urged closer alignment between the proposed committee and the tax‑credit and bond allocation boards overseen by the state treasurer (commonly called TCAC and CDLAC). Several nonprofit developers and lenders said a true “one‑stop shop” will require mechanisms to coordinate or sequence awards that today are administered by different constitutional offices.

- Labor and personnel issues: Susan Rodriguez, chief negotiator for SEIU Local 1000, told the commission the union represents nearly 100,000 state workers who staff affected programs and urged early, substantive worker engagement before any personnel moves. SEIU said implementation details for staff, IT and workplace logistics were sparse in the proposal and will affect day‑to‑day operations.

Panels and local testimony

- The administration’s panel included Moss; Gustavo Velasquez (HCD); Kevin Kish, director of the California Civil Rights Department (CRD), who supported including fair‑housing enforcement in the new housing agency; and Kimberly Kirchmeyer, director of the Department of Consumer Affairs, who described a separate business and consumer services agency as appropriate.

- Researchers and policy experts at UC Berkeley’s Turner Center, SPUR, NextGen Policy and the California Housing Partnership urged a consolidated finance committee and warned that administrative change must be paired with systems investments (training, process automation and sustained leadership) to realize time and cost savings.

- Nonprofit developers, community lenders and regional housing advocates — including representatives from Mercy Housing, Enterprise, Eden Housing, the Nonprofit Housing Association of Northern California and others — voiced support for a dedicated agency and a single competition for state subsidy dollars, arguing the current system frequently requires multiple separate applications and duplicative underwriting that stall projects for years.

Remaining questions and concerns

- Cost and timing: Commissioners repeatedly asked for firm estimates of start‑up costs and how long the reorganization would take to implement without disrupting pipeline projects. Moss said the May Revision would include a firm fiscal package and said many initial functions would be carried out with existing HCD and BCSH staff to limit near‑term costs.

- Authority and sequencing: Multiple witnesses and commissioners asked how the proposed committee would work with the treasurer’s TCAC and CDLAC functions, which are administered by separately elected constitutional officers. Experts suggested several options — statutory changes, explicit inter‑agency agreements, or phased administrative integration — but noted each path has tradeoffs and would require additional legislative or constitutional steps to fully consolidate decision making.

- Metrics and accountability: Commissioners asked the administration to identify specific metrics for success (for example, reductions in application processing time, per‑unit cost savings, number of shovel‑ready projects funded and number of affordable units produced). Secretary Moss said program‑level metrics will be developed during implementation.

What the commission heard from the public

- Dozens of nonprofit developers, housing advocates, regional coalitions and affordable housing lenders gave public comment. The vast majority supported the concept of a stand‑alone housing agency and a single, more predictable application process for state housing dollars. Many speakers described projects that required years and multiple funding applications to reach construction and estimated large per‑unit cost increases tied to financing delays.

- Labor groups and some community advocates urged the administration to include workers, local governments and people with lived experience of homelessness in implementation planning.

Next steps

- The administration said it will provide more detailed cost and implementation information in the May Revision and that the legislature will have opportunities to consider statutory and trailer‑bill steps to implement or augment the proposal. The Little Hoover Commission will finish its review and issue an advisory report to the legislature that may recommend changes or follow‑up actions.

Ending note

Supporters called the reorganization a necessary structural step to tackle long‑standing fragmentation in how California funds and builds affordable housing. Critics — including some commissioners and labor representatives — cautioned that without clear cost estimates, statutory fixes to coordinate with the treasurer’s functions, formal staff transition plans and concrete performance metrics, the reorganization could create new complexity without delivering promised time and cost savings.