Administration proposes splitting Business, Consumer Services and Housing into two cabinet agencies

Assemblymember Sharon Quirk Silva opened an informational May revision hearing where Tamika Moss, secretary of the Business, Consumer Services and Housing (BCSH) Agency, described a proposed reorganization that would split BCSH into two cabinet-level agencies: a Business Consumer Services and Administration (BCSA) and a California Housing and Homelessness Agency (CHHA).

"This proposal makes key structural changes to increase our ability to positively impact California across our agency's entire portfolio," Secretary Tamika Moss said, adding the change would allow more specialized staff and narrower policy focus for each new agency.

Gustavo Velasquez, director of the Department of Housing and Community Development (HCD), said CHHA would provide "dedicated leadership and focus on housing and homelessness at the cabinet level," and that a newly proposed Housing Development and Finance Committee would aim to coordinate state investments and administration of federal programs.

Department of Finance staff, represented by Megan Tokonaga Block at the hearing, said implementation will require resources in the 2025-26 fiscal year to establish delegation authority for hiring, procurement and other administrative functions, and to fund organizational-change activities the administration says are necessary to effectuate a July 1, 2026, operational date.

The Legislative Analyst's Office recommended caution. Paul Steenhausen of the LAO told the subcommittee that the plan increases ongoing state costs—$4 million in the budget year and $6 million annually thereafter—and that the statutory review process (including the Little Hoover Commission and the Legislature) remains underway. "Approving May revision funding for June's budget before deciding on the Legislature's position on the reorganization would be kind of like putting the cart before the horse," he said.

Several assembly members expressed concern about timing and affordability. Assemblymember Matt Haney and others said the state is facing a tight budget; Haney said his preference would be to synchronize any major organizational shift with a fuller legislative review and clearer multiyear funding commitments for housing programs. Chair Quirk Silva said she was not opposed to reorganization in principle but urged a pause given the May revision's timing and other budgetary priorities.

Administration witnesses said the reorganization is intended to improve stewardship of existing funding, strengthen oversight, and speed deployment of housing programs and regulatory responses. Supporters who testified in public comment — including housing advocates later in the hearing — argued that a stand‑alone housing agency could produce a "one‑stop shop" for housing finance and improve transparency in award processes.

The subcommittee did not take a vote on the reorganization at the hearing. Department officials asked the Legislature to authorize limited implementation resources in 2025‑26 to avoid delay, while the LAO and some members urged deferring funding decisions until after statutory review and clearer legislative direction.