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May revision keeps new homelessness spending flat; administration says $3.4B remains in pipeline
Summary
Department of Housing and Community Development officials told Assembly Budget Subcommittee 5 that the May revision does not propose new homelessness or affordable‑housing funding in 2025‑26 but retains roughly $3.4 billion in previously authorized rounds and NOFAs that the department is administering.
Department of Housing and Community Development (HCD) officials told the Assembly Budget Subcommittee 5 that the governor's May revision proposes no new affordable housing or homelessness dollars for 2025‑26 but retains $3.4 billion in previously authorized funding that the department is preparing to administer.
"We have $3,400,000,000 in existing funding that we are working on expeditiously getting out the door," Deputy Director Matt Schuler said, while noting the May revision would revert $31.7 million of undersubscribed affordable-housing appropriations from prior budget acts.
Schuler outlined several pots of existing and pending funds the department is administering: $2.25 billion for the Homekey Plus NOFA; $775 million for an affordable housing and sustainable communities NOFA; $382 million for a multifamily super NOFA (a combination of four programs); $54 million for a tribal multifamily super NOFA; and roughly $6 million for a competitive multifamily component of the Permanent Local Housing Allocation (PLHA). HCD officials said the department expected many of those rounds to be awarded this year but that no new ongoing general fund appropriations were proposed in the May revision.
Legislative Analyst Office staff and assembly members pushed back on the administration's decision to revert the $31.7 million. Paul Steenhausen of the LAO said that, given the state's budget condition, reverting unawarded grants is a reasonable savings approach; several assembly members objected that returning funds would undercut oversubscribed programs and reduce development pipeline certainty.
Assemblymember Matt Haney and others pressed HCD and Department of Finance witnesses about the ongoing greenhouse gas reduction fund (GGRF) commitment for affordable housing, the status of LIHTC (Low-Income Housing Tax Credit) and HAP (Homelessness Assistance Program) round funding, and whether a planned housing bond or trailer‑bill CEQA reforms would be included in budget language. Finance staff said the May revision prioritized high‑profile projects (e.g., high‑speed rail and CalFire) and that remaining GGRF priorities would be negotiated with the legislature and stakeholders.
Public comment included housing-advocacy organizations urging continued investment in HAP and the multifamily housing program (MHP), warning that without ongoing funding local providers would need to scale back shelters and services.
HCD officials defended the department's compliance and oversight work, including a Housing and Homelessness Accountability unit. In back‑and‑forth with Assemblymember DeMaio, HCD said that the homelessness accountability unit includes roughly 30 program staff and about six attorneys and that program-specific compliance staff also support Homekey, HAP and other grants.
No funding decisions were adopted in the hearing; lawmakers signaled they would continue to press for restoration or reauthorization of key programs during budget negotiations.
