Governor keeps student housing bond support; two community college projects withdraw or shift approach

The subcommittee heard updates on the state's plan to transition prior higher‑education student housing grant awards into a lease revenue bond program to support community college student housing projects.

"Of the 13 projects eligible for this program, 11 are still actively involved with the program," said Alexandra Waldman of the Department of Finance. The Chancellor's Office told the committee the budget continues to provide resources to support the transition and that the projects represented "just under $1 billion" in available resources.

What the update said

- Project status: The Chancellor's Office said one district — College of the Canyons — officially withdrew its application after leadership changes; San Diego Community College District is exploring a public‑private (P3) approach and may pursue an alternate financing structure rather than the lease revenue bond vehicle.

- Construction pipeline: Finance staff said four of the 11 active projects are under construction, five are due to begin construction in the budget year and two are scheduled to start in fiscal 2026–27.

- Budget and oversight: The Department of Finance reported the 2025–26 governor's budget proposes $1.3 million in general fund to support debt service in the budget year for completed community college projects and said an administrative oversight item in the May Revision will correct an accounting oversight that understated planned debt service in the governor's budget.

Stakeholder requests and next steps

District representatives urged that returned or reverted funds from projects that do not proceed be considered for another round of allocations rather than immediately reverting to the state. Finance said the disposition of returned funds is under evaluation and will depend on statute and budget negotiations.

Quotations

"Finance has been working with the chancellor's office to create a lease revenue bond program structure which serves the needs of the districts," Alexandra Waldman said, adding that interim financing and legal mechanisms are being developed to facilitate bond sales.

Why it matters: Student housing remains a high‑cost, high‑demand item for certain campuses and regions. Lawmakers asked the administration to consider regional needs and the possibility of a future application round if funds are returned by districts that withdraw.