Assembly hearing spotlights housing production gains even as governor proposes $0 new housing dollars

The California Department of Housing and Community Development told the Assembly Subcommittee 5 on State Administration that housing production and permitting timelines have improved, while the administration's January budget proposed no new general‑fund investments in housing production.

HCD Chief Deputy Director Zach Olmstead told the committee that annual housing completions rose 13 percent from 2022 to 2023 and that affordable housing commitments made since 2019 total more than 60,000 multifamily units across award, construction and completed stages. He said HCD has active funding rounds, including Homekey Plus under Proposition 1, an affordable housing sustainable communities NOFA, multifamily super NOFAs and a tribal multifamily NOFA.

Why it matters: committee members, led by Chair Assemblymember Ward, pressed HCD and the Department of Finance on the budget choice to propose zero new general‑fund dollars for affordable housing production in the budget year. Members said pauses or cuts in state funding risk stalling projects in the pipeline and argued that available state programs need continued replenishment to prevent project failures amid rising costs.

Details from HCD: Olmstead described several programs and outcomes the department says reflect recent progress. He said density bonus entitlements for deed‑restricted units increased from about 29,000 in 2021 to 48,000 in 2023; SB 35 ministerial approvals added roughly 21,000 units between 2021 and 2023 (about 79 percent targeting very‑low income households); and an excess sites program has created 4,300 units across 32 projects.

On affordability production, Olmstead said HCD-funded activity since 2019 totals 60,098 multifamily units (about 18,406 completed, 27,442 actively under construction, 14,250 awarded but not yet in construction). He flagged a $4.6 billion awards total across multiple programs and singled out roughly $2.2 billion in Homekey Plus funds (about $1.03 billion for veterans) and a $775 million AHSC NOFA being released the same day. The department expects multifamily super NOFA awards in August and tribal multifamily awards later in the year.

Committee concerns and context: Members repeatedly emphasized a need to preserve momentum. Assemblymember Ward and others said earlier investments remain important but warned that proposing $0 for new production in the budget year would risk the pipeline. Department of Finance staff told the committee the January proposal reflected difficult tradeoffs across the budget and that the administration viewed the proposal as a starting point for discussions.

Programmatic friction points: HCD also told the committee entitlement processing times have shortened — from an average of 145 days in 2018 to 64 days in 2023 — which the department linked to cost savings and faster construction starts. Olmstead said very‑low income completions rose 44 percent and low‑income completions rose 75 percent in the most recent year with data.

Public comment and advocates: Speakers from housing advocacy organizations and housing finance groups told the committee there are thousands of shovel‑ready projects that need state funding. Housing California, the California Housing Consortium, California Housing Partnership and others urged legislative commitment to programs including the State Low‑Income Housing Tax Credit, the Multifamily Housing Program and HAP funding rounds.

What the committee asked for next: members asked HCD for more precise, program‑level accountability and for regular dashboard reports tying specific program investments to unit production. HCD said some of that data is available on dashboards and in annual project reports, but aggregated funding stacks make per‑program attribution complex.

Ending note: The hearing combined HCD's data on recent production gains with sharp questions about the governor's proposed housing budget for the year. Committee members signaled they intend to press the administration for restored or redirected funding during budget negotiations.