Plan seeks cabinet-level California Housing and Homelessness Agency and a housing finance committee to speed and coordinate affordable housing funding

The administration told an Assembly joint informational hearing May 20 that the governor's 2025 reorganization plan would create a California Housing and Homelessness Agency (CHHA) and a Housing Development and Finance Committee (HDFC) intended to centralize state affordable-housing finance, shorten award timelines and reduce development costs.

Gustavo Velasquez, director of the Department of Housing and Community Development, told lawmakers HCD has funded roughly 60,000 affordable homes under his leadership and said the proposed CHHA would elevate housing and homelessness as an integrated, cabinet-level priority. "Creating this agency will provide dedicated leadership and focus on housing and homelessness at the cabinet level," Velasquez said.

Nut graf: administration and housing practitioners argued that aligning multiple state funding streams and creating a single decision-making committee for affordable multifamily awards will reduce delays and costs that now occur when developers apply sequentially to different agencies. Developers and advocates urged the administration and Legislature to ensure the housing finance committee coordinates formally with the tax-credit and bond allocating bodies (TCAC and CDLAC) and to fund the implementation work needed to make a true single application and unified award process.

What the committee would do: Rebecca Franklin, chief deputy director of the California Housing Finance Agency (CalHFA), said CalHFA's independent financial structure and board would remain intact and that legal separation is preserved, while HDFC would focus on aligning program rules, award timelines and compliance management across HCD, CalHFA and other state programs. The administration said the committee would pursue a single funding award process, streamline compliance management and increase public transparency through a public decision‑making process.

Developers' experience: Margaret Miller, president of development at The John Stewart Company, described a project called Cornerstone Village in Elk Grove that required roughly $54 million to build. Miller said the project secured roughly $15 million in commitments from multiple state and local sources but failed to secure a final $9 million needed to close, leaving "$15,000,000 in public funds from 4 different agencies sat idle while we attempted to get the final $9,000,000 we needed to proceed." She told the committee many projects are ready to proceed but are stalled by fragmented funding processes.

Jeffrey Morgan, president and CEO of CHISPA, said time and uncertainty are the largest enemies to development. He described Colorado's one-stop coordination as a model where multiple funding commitments are made simultaneously and cited the human impact of delay: when projects proceed faster, more families can be housed sooner.

Legislative and technical questions: lawmakers probed the treatment of tax credits and tax-exempt bond allocations, which are administered by TCAC and CDLAC under the treasurer's authority. The reorganization does not transfer TCAC or CDLAC into CHHA because those functions sit with constitutional offices, but administration witnesses said they are coordinating with the treasurer and other entities and that TCAC and CDLAC staff are at the table in implementation discussions. Several speakers, including Housing California and the California Housing Partnership, urged formal representation or a clear coordination mechanism with TCAC/CDLAC to ensure awards are genuinely aligned.

Timeline and budget: testimony described a phased, multi-year rollout. The administration told legislators the CHHA and finance committee would be prepared in "Year 1" and the formal agency replacement for BCSH was expected by July 2026, with phased transfers thereafter contingent on appropriations. The Little Hoover Commission has held hearings and was expected to issue recommendations; the administration said more detailed fiscal impacts will be in the May revise.

Public comment: dozens of housing advocates, developers and nonprofit practitioners testified in favor of the reorganization, urging the Legislature and administration to fund implementation, include stronger coordination with tax-credit and bond programs, and ensure the HDFC has the authority and resources to produce a true one-stop application and faster closings. Housing advocacy groups and developer trade associations cited studies estimating that each additional state funding agency a developer must visit adds roughly $17,000 per unit in cost and argued that improved coordination could save hundreds of millions across statewide pipelines.

What was not decided: the reorganization proposal does not move TCAC or CDLAC under CHHA and left several implementation details to the May revise and legislative review. Committee members said they will continue oversight as the administration refines the proposal and that statutory and budget language will determine how many programs and staff transfer and when.

Looking ahead: the administration and stakeholders agreed that if CHHA and the housing finance committee are to deliver faster, lower-cost housing, the Legislature and governor must fund the implementation work, clarify the committee's authority, and provide mechanisms to coordinate with the treasurer's tax-credit and bond functions.