The California Constitution authorizes the development, construction, or acquisition of developments composed of urban or rural dwellings, apartments, or other living accommodations for persons of low income financed in whole or in part by the federal government or a state public body, or to which the federal government or a state public body extends assistance, if a majority of the qualified electors of the city, town, or county in which the housing is proposed to be located approves the project by voting in favor thereof, as specified.

This measure, the Housing Opportunities for Everyone (HOPE) Made Equal (HOME) Act, would create an account in the General Fund into which, beginning in the 202728 fiscal year, and each fiscal year thereafter until September 30, 2036, a sum would be transferred from the General Fund equal to or greater than 5% of the estimated amount of General Fund revenues for that fiscal year, as specified. The measure would require the moneys in the account to be appropriated by the Legislature to the Business, Consumer Services, and Housing Agency, and would authorize that agency to expend the moneys to fund prescribed matters related to homelessness and affordable housing, including housing and services to prevent and end homelessness.

This measure would require the agency to develop a 10-year investment strategy, with input from stakeholders, that demonstrates how moneys in the account will be used to produce affordable housing and end homelessness through specific performance measures and benchmarks. On or before October 1 of each year, and until October 1, 2036, the measure would require the agency to annually report to the Legislature on its progress in meeting those performance measures and benchmarks.

The California Constitution authorizes the development, construction, or acquisition of developments composed of urban or rural dwellings, apartments, or other living accommodations for persons of low income financed in whole or in part by the federal government or a state public body, or to which the federal government or a state public body extends assistance, if a majority of the qualified electors of the city, town, or county in which the housing is proposed to be located approves the project by voting in favor thereof, as specified.

This measure, the Housing Opportunities for Everyone (HOPE) Act, would create an account in the General Fund into which, beginning in the 202728 fiscal year, and each fiscal year thereafter until September 30, 2036, a sum would be transferred from the General Fund equal to or greater than 5% of the estimated amount of General Fund revenues for that fiscal year, as specified. The measure would require the moneys in the account to be appropriated by the Legislature to the Business, Consumer Services, and Housing Agency, and would authorize that agency to expend the moneys to fund prescribed matters related to homelessness and affordable housing, including housing and services to prevent and end homelessness.

This measure would require the agency to develop a 10-year investment strategy, with input from stakeholders, that demonstrates how moneys in the account will be used to produce affordable housing and end homelessness through specific performance measures and benchmarks. On or before October 1 of each year, and until October 1, 2036, the measure would require the agency to annually report to the Legislature on its progress in meeting those performance measures and benchmarks.

Resolved by the Assembly, the Senate concurring, That the Legislature of the State of California at its 202526 Regular Session commencing on the second day of December 2024, two-thirds of the membership of each house concurring, hereby proposes to the people of the State of California, that the Constitution of the State be amended as follows:

This measure shall be known, and may be cited, as the Housing Opportunities for Everyone (HOPE) Made Equal (HOME) Act.

The Legislature finds and declares all of the following:

(a)As of January 2023, California has had an estimated 181,339 people experiencing homelessness on any given day.

(b)Seventy-one percent of homeless Californians were unsheltered, the highest rate in the nation, meaning that they were living in streets, parks, or other locations not meant for human habitation.

(c)As local communities work to house the unsheltered, more people are falling into homelessness. Larger urban areas with high numbers of people experiencing homelessness have reported that more people are falling into homelessness than they are able to house.

(d)Homelessness is a complex problem, but a source of homelessness is the high cost of housing.

(e)In many parts of the state, many lower income residents are severely cost burdened, paying over 50 percent of their income toward housing costs. One small financial setback can push these individuals and families into homelessness.

(f)In the current market, 2.2 million extremely low income and very low income renter households are competing for 664,000 affordable rental units.

(g)Of the 6 million renter households in the state, 1.7 million are paying more than 50 percent of their income toward rent.

(h)The National Low Income Housing Coalition estimates that the state needs an additional 1.5 million housing units affordable to very low income Californians.

(i)The private market does not provide enough affordable housing to meet the needs. In 2020, the average rent in a market rate unit was $1,900 per month.

(j)Many homebuyers are shut out of the market because they are competing against all-cash buyers for extremely expensive homes. In 2021, the average home price was $633,896.

(k)Although the state has invested in addressing unsheltered homelessness and increasing the supply of affordable rental and ownership housing, the state does not have a multiyear funding strategy.

(l)Without a long-term strategy to fund moving people off the streets and into housing and preventing future homelessness by creating more affordable housing, the state cannot fully respond to the crisis.

(m)To build a sustainable response to homelessness and the affordable housing crisis, this proposal will allocate at least 5 percent (based on 202526 projected revenues of roughly $200 billion) of the funding from the General Fund, or $10 billion each year, for 10 years.

(n)This investment will allow the state to house at least 50,000 people who are homeless and build an additional 40,000 affordable housing units each year.

(o)State government will be required to create a 10-year investment plan that includes performance goals and metrics to ensure that these funds reduce homelessness and create more affordable housing.

(p)The funding provided by this measure is intended to be only the minimum amount of state resources put toward the goal of preventing and ending homelessness.

(a)(1)The Housing Opportunities for Everyone (HOPE) Made Equal (HOME) Account is hereby created within the General Fund.

(2)Moneys in the HOPE HOME Account shall be appropriated by the Legislature to the Business, Consumer Services, and Housing Agency and may be expended by the agency to only fund the following:

(A)Housing and services to prevent and end homelessness.

(B)Development, acquisition, rehabilitation, and preservation of rental housing that is affordable to extremely low, very low, and low-income households, including necessary operating subsidies.

(C)Affordable home ownership opportunities for low- and moderate-income households, including, but not limited to, downpayment assistance and development of new units.

(b)(1)The Business, Consumer Services, and Housing Agency shall develop a 10-year investment strategy, with input from stakeholders, that demonstrates how moneys in the HOPE HOME Account will be used to produce affordable housing and end homelessness through specific performance measures and benchmarks.

(2)On or before October 1 of each year, and until October 1, 2036, the Business, Consumer Services, and Housing Agency shall annually report to the Legislature on its progress in meeting the performance measures and benchmarks contained in the investment strategy.

(c)(1)Subject to paragraphs (2) and (3), beginning in the 202728 fiscal year, and each fiscal year thereafter until September 30, 2036, and no later than October 1 of each fiscal year, the Controller shall transfer from the General Fund to the HOPE HOME Account a sum equal to or greater than 5 percent of the estimated amount of General Fund revenues for that fiscal year.

(2)The annual estimation of General Fund revenues pursuant to paragraph (1) shall occur after all other General Fund obligations incurred by the State on or before the date upon which the measure that adds this section becomes effective have been met, including, but not limited to, the States funding obligation to the public school system and public institutions of higher education pursuant to Section 8 of this article.

(3)(A)Upon the Governors proclamation declaring a budget emergency and identifying the conditions constituting the emergency, the Legislature may pass a bill that suspends or reduces by a specified dollar amount for one fiscal year the transfer of moneys from the General Fund to the HOPE HOME Account required by paragraph (1).

(B)For purposes of this paragraph, budget emergency means an emergency declared by the Governor, within the meaning of paragraph (2) of subdivision (c) of Section 3 of Article XIII B or a determination by the Governor that estimated resources are inadequate to fund General Fund expenditures for the current or ensuing fiscal year at a level equal to the highest amount of total General Fund expenditures estimated at the time of enactment of any of the three most recent Budget Acts, adjusted for both of the following:

(i)The annual percentage change in the cost of living for the State, as measured by the California Consumer Price Index.

(ii)The annual percentage growth in the civilian population of the State pursuant to subdivision (b) of Section 7901 of the Government Code, as that section read on January 1, 2025.

Resolved by the Assembly, the Senate concurring, That the Legislature of the State of California at its 202526 Regular Session commencing on the second day of December 2024, two-thirds of the membership of each house concurring, hereby proposes to the people of the State of California, that the Constitution of the State be amended as follows:

This measure shall be known, and may be cited, as the Housing Opportunities for Everyone (HOPE) Act.

The Legislature finds and declares all of the following:

(a)As of January 2023, California has had an estimated 181,339 people experiencing homelessness on any given day.

(b)Seventy-one percent of homeless Californians were unsheltered, the highest rate in the nation, meaning that they were living in streets, parks, or other locations not meant for human habitation.

(c)As local communities work to house the unsheltered, more people are falling into homelessness. Larger urban areas with high numbers of people experiencing homelessness have reported that more people are falling into homelessness than they are able to house.

(d)Homelessness is a complex problem, but a source of homelessness is the high cost of housing.

(e)In many parts of the state, many lower income residents are severely cost burdened, paying over 50 percent of their income toward housing costs. One small financial setback can push these individuals and families into homelessness.

(f)In the current market, 2.2 million extremely low income and very low income renter households are competing for 664,000 affordable rental units.

(g)Of the 6 million renter households in the state, 1.7 million are paying more than 50 percent of their income toward rent.

(h)The National Low Income Housing Coalition estimates that the state needs an additional 1.5 million housing units affordable to very low income Californians.

(i)The private market does not provide enough affordable housing to meet the needs. In 2020, the average rent in a market rate unit was $1,900 per month.

(j)Many homebuyers are shut out of the market because they are competing against all-cash buyers for extremely expensive homes. In 2021, the average home price was $633,896.

(k)Although the state has invested in addressing unsheltered homelessness and increasing the supply of affordable rental and ownership housing, the state does not have a multiyear funding strategy.

(l)Without a long-term strategy to fund moving people off the streets and into housing and preventing future homelessness by creating more affordable housing, the state cannot fully respond to the crisis.

(m)To build a sustainable response to homelessness and the affordable housing crisis, this proposal will allocate at least 5 percent (based on 202526 projected revenues of roughly $200 billion) of the funding from the General Fund, or $10 billion each year, for 10 years.

(n)This investment will allow the state to house at least 50,000 people who are homeless and build an additional 40,000 affordable housing units each year.

(o)State government will be required to create a 10-year investment plan that includes performance goals and metrics to ensure that these funds reduce homelessness and create more affordable housing.

(p)The funding provided by this measure is intended to be only the minimum amount of state resources put toward the goal of preventing and ending homelessness.

(a)(1)The Housing Opportunities for Everyone (HOPE) Account is hereby created within the General Fund.

(2)Moneys in the HOPE Account shall be appropriated by the Legislature to the Business, Consumer Services, and Housing Agency and may be expended by the agency to only fund the following:

(A)Housing and services to prevent and end homelessness.

(B)Development, acquisition, rehabilitation, and preservation of rental housing that is affordable to extremely low, very low, and low-income households, including necessary operating subsidies.

(C)Affordable home ownership opportunities for low- and moderate-income households, including, but not limited to, downpayment assistance and development of new units.

(b)(1)The Business, Consumer Services, and Housing Agency shall develop a 10-year investment strategy, with input from stakeholders, that demonstrates how moneys in the HOPE Account will be used to produce affordable housing and end homelessness through specific performance measures and benchmarks.

(2)On or before October 1 of each year, and until October 1, 2036, the Business, Consumer Services, and Housing Agency shall annually report to the Legislature on its progress in meeting the performance measures and benchmarks contained in the investment strategy.

(c)(1)Subject to paragraphs (2) and (3), beginning in the 202728 fiscal year, and each fiscal year thereafter until September 30, 2036, and no later than October 1 of each fiscal year, the Controller shall transfer from the General Fund to the HOPE Account a sum equal to or greater than 5 percent of the estimated amount of General Fund revenues for that fiscal year.

(2)The annual estimation of General Fund revenues pursuant to paragraph (1) shall occur after all other General Fund obligations incurred by the State on or before the date upon which the measure that adds this section becomes effective have been met, including, but not limited to, the States funding obligation to the public school system and public institutions of higher education pursuant to Section 8 of this article.

(3)(A)Upon the Governors proclamation declaring a budget emergency and identifying the conditions constituting the emergency, the Legislature may pass a bill that suspends or reduces by a specified dollar amount for one fiscal year the transfer of moneys from the General Fund to the HOPE Account required by paragraph (1).

(B)For purposes of this paragraph, budget emergency means an emergency declared by the Governor, within the meaning of paragraph (2) of subdivision (c) of Section 3 of Article XIII B or a determination by the Governor that estimated resources are inadequate to fund General Fund expenditures for the current or ensuing fiscal year at a level equal to the highest amount of total General Fund expenditures estimated at the time of enactment of any of the three most recent Budget Acts, adjusted for both of the following:

(i)The annual percentage change in the cost of living for the State, as measured by the California Consumer Price Index.

(ii)The annual percentage growth in the civilian population of the State pursuant to subdivision (b) of Section 7901 of the Government Code, as that section read on January 1, 2025.

Date of Hearing: May 14, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:ACA 4

Author:(Jackson) – As Amended Ver:May 5, 2025

Urgency: State Mandated Local Program: No Reimbursable: No

SUMMARY:

This measure, if approved by the voters, amends the California Constitution to require at least 5% of General Fund (GF) revenues be transferred to the Housing Opportunities Made Equal (HOME) Fund each year for the next 10 years, to support the creation of affordable housing, fund housing and services to prevent and end homelessness, and support homeownership opportunities for low- and moderate-income households.

The measure also requires the Business, Consumer Services, and Housing Agency (BCSH) to develop a 10-year investment strategy that demonstrates how moneys in the HOME Account will be used to produce affordable housing and end homelessness.

Specifically, this measure:

1. Establishes the Housing Opportunities Made Equal (HOME) Act and the HOME Fund account within the GF.
2. Requires the State Controller, for each fiscal year beginning in 2027-28 through September 30, 2036, no later than October 1, to transfer from the GF to the HOME Account a sum equal to 5% of the estimated amount of GF revenues for that fiscal year.
3. Requires the annual estimation of GF revenues deposited in the HOME Fund to occur after all other GF obligations incurred by the state on or before the date this measure takes effect have been met, including, but not limited to, the state’s funding obligation to the public school system and public institutions of higher education (Proposition 98).
4. Authorizes the Legislature to appropriate funds in the HOME account to BCSH to fund only the following:
5. Housing and services to prevent and end homelessness.
6. Development, acquisition, rehabilitation, and preservation of rental housing that is affordable to extremely low-, very low-, and low-income households, including necessary operating subsidies.
7. Affordable homeownership opportunities for low- and moderate-income households, including, but not limited to, down payment assistance and development of new units.
8. Requires BCSH to develop a 10-year investment strategy with input from stakeholders that demonstrates how moneys in the HOME Account will be used to produce affordable housing and end homelessness through specific performance measures and benchmarks.
9. Requires BCSH, by October 1 of each year, and until October 1, 2036, to annually report to the Legislature on its progress in meeting the performance measures and benchmarks contained in the investment strategy.
10. Provides, if the Governor declares a budget emergency, as defined, the Legislature may pass a bill to suspend or reduce amounts deposited in the HOME Fund.

FISCAL EFFECT:

1. GF costs of approximately $10 billion annually for ten years, based on 2025 budget revenue projections. This ACA requires the state to annually transfer 5% of GF revenues to the HOME Fund created by this measure. The measure requires this calculation to be made after accounting for other GF obligations incurred prior to the effective date of this measure, such as Proposition 98 obligations to schools, Budget Stabilization Account (rainy day fund) requirements, and debt service obligations, among other obligations.

The allocation made pursuant to this measure will necessarily reduce by an equivalent amount GF discretionary dollars available for other state programs and services.

1. BCSH will incur both ongoing and one-time GF costs to establish a structure to administer the funds deposited in the HOME Fund and to develop a 10-year investment strategy to expend the funds and track and analyze the impact. These costs are unknown, but likely in the millions to low-tens of millions of dollars annually for staffing and contracts. BHCS does not currently manage any specific programs or handle loans or grants.
2. State agencies or departments that receiving funding will incur costs to administer the funds, which may require additional staffing. For example, the Department of Housing and Community Development notes if the department is tasked with implementing or administering any of the funding, it would expect to use up to 5% of funds for administrative purposes. These costs are unknown, but likely in the hundreds of thousands of dollars annually per affected department.
3. Estimated one-time GF costs to the Secretary of State in the range of $740,000 to $987,000 for printing and mailing costs to place the measure on the ballot in a statewide election. This estimate assumes an average per-page cost of $123,000 and the addition of six to eight pages in the Voter Information Guide. Actual costs may be higher or lower, depending on the length of required elements and the overall size of the ballot.

COMMENTS:

1. Purpose. According to the author:

Homelessness and the affordable housing crisis are two of the most pressing issues facing Californians today. [This measure] seeks to tackle these challenges by creating HOME Account. This account would direct at least 5% of California’s General Fund revenues each year toward homelessness prevention and the development of affordable housing. It is vital that California uses every tool available to ensure we are fulfilling our commitment to providing housing for all residents. This funding mechanism would create stability in the housing market, as the state could forecast housing needs on a yearly basis. To ensure accountability, the Business, Consumer Services, and Housing Agency would need to develop a 10-year investment strategy demonstrating how the funds in this account would be allocated. [This measure] is a critical step in creating a California where everyone has a place to call home.

1. Background. Homelessness and the High Cost of Housing. Based on the 2024 point in time count, California has the largest homeless population in the nation with nearly 185,000 people experiencing homelessness on any given night. Over 100,000 are unsheltered, meaning they are living outdoors and not in temporary shelters.

The lack of affordable rental housing for lower income people contributes to the state’s homelessness crisis. In the current market, 2.2 million extremely low-income and very low-income renter households are competing for 664,000 affordable rental units. Of the six million renter households in the state, 1.7 million are paying more than 50% of their income toward rent. The National Low Income Housing Coalition estimates the state needs an additional 1.5 million housing units affordable to very low-income Californians. According to the California Housing Partnership, although the state has doubled production of new affordable rental homes in the past five years, the state only funded 15% of what is needed to meet its goals.

State Housing Funding. Over the past twenty years, the state has largely relied upon voter-approved bonds to fund the construction or rehabilitation of affordable rental housing, homeownership units and down payment assistance, and housing for special populations including veterans and special needs groups.

Most recently, Proposition 1 of 2024, authorized $6.4 billion in bonds to finance behavioral health treatment beds, supportive housing, community sites, and funding for housing veterans with behavioral health needs. In addition, Proposition 1 of 2018, the Veterans and Affordable Housing Act of 2018, authorized $4 billion in voter-approved bonds to fund the CalVet homeownership program and existing affordable housing programs for the construction of affordable rental housing for farmworkers, special needs populations, and lower-income households.

AB 736 (Wicks), of this legislative session, places a $10 billion bond on the June 2026 ballot to fund various affordable housing programs.

The state also has a small number of ongoing funding sources for affordable housing, including the Building Homes and Jobs Act of 2017, and the state low-income housing tax credit. Although the GF historically has not been a significant source of funding for affordable housing, beginning in 2019, through 2023-24, the state budget provided approximately $12 billion for various one-time, discretionary housing initiatives.

The Legislature has passed major legislation in recent years to encourage greater production of affordable housing and to address homelessness. However, the lack of housing overall, and in particular the lack of sufficient affordable housing, persists. Housing advocates assert the lack of an ongoing source of state funding adequate to address the state’s affordable housing and homelessness issues contributes to the problem.

This measure establishes a ten-year funding commitment in the state Constitution that dedicates 5% from the state’s GF, each year, to the state’s affordable housing and homelessness crisis.

1. Arguments in Support. According to Resources for Community Development:

As a provider of affordable homes, we know the essential role affordable housing plays in every California community — providing shelter, support, and community to the state’s most vulnerable residents. California currently has a gap of 1.3 million homes affordable to lower-income households and over 339,000 people in California experienced homelessness in 2024. The Governor and Legislature have demonstrated their commitment to addressing this crisis by using past budget surpluses to fund one-time investments. [This measurer] will build on these efforts and provide a permanent, ongoing funding source.

1. Arguments in Opposition. The California Association of Realtors (C.A.R.) opposes this measure unless amended to prohibit the conversion of single-family homes to deed restricted corporate owned rental housing, require 25% of HOME Act funds to be dedicated to the California Housing Finance Authority’s Dream for All equity-sharing, down payment assistance program, and to include C.A.R. as a stakeholder in the oversight and management of HOME Act funds.
2. Related Legislation. AB 1165 (Gipson), of this legislative session, establishes the California Housing Justice Fund and requires the Legislature to invest an ongoing annual allocation in the fund in an amount (unspecified) needed to solve homelessness and housing unaffordability.
3. Prior Legislation. ACA 14 (Wicks), of the 2021-22 Legislative Session, was substantially similar to this measure. ACA 14 was referred to, but never heard by this committee.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: May 1, 2025

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Alex Lee, Chair

ABPCA Bill Id:ACA 4 (

Author:Jackson) – As Introduced Ver:January 24, 2025

SUBJECT: Homelessness and affordable housing

SUMMARY: Amends the California Constitution to require 5% of the estimated amount of the General Fund (GF) to fund housing and services to prevent and end homelessness. Requires the Business, Consumer Services, and Housing Agency (BCSH) to develop a 10-year investment strategy to produce affordable housing and end homelessness using these appropriated funds. Specifically, this bill:

1. States this measure shall be known, and may be cited, as the Housing Opportunities for Everyone (HOPE) Act, creates the HOPE Account within the GF, and requires moneys in the HOPE Account to be appropriated by the Legislature to the BCSH to only fund the following:
2. Housing and services to prevent and end homelessness;
3. Development, acquisition, rehabilitation, and preservation of rental housing that is affordable to extremely low, very low, and low-income households, including necessary operating subsidies; and,
4. Affordable home ownership opportunities for low- and moderate-income households, including, but not limited to, down payment assistance and development of new units.
5. Requires BCSH to develop a 10-year investment strategy, with stakeholders' input, demonstrating how moneys in the HOPE Account will be used to produce affordable housing and end homelessness through specific performance measures and benchmarks.
6. Requires BCSH, on or before October 1 of each year, and until October 1, 2036, to annually report to the Legislature on its progress in meeting the performance measures and benchmarks contained in the investment strategy.
7. Requires the Controller, subject to a) and b) below, beginning in the 2027–28 fiscal year, and each fiscal year thereafter until September 30, 2036, and no later than October 1 of each fiscal year, to transfer from the GF to the HOPE Account a sum equal to or greater than 5% of the estimated amount of GF revenues for that fiscal year:
8. Requires the annual estimation of GF revenues to occur after all other GF obligations incurred by the State on or before the date upon which the measure that adds this provision becomes effective have been met, including, but not limited to, the State’s funding obligation to the public school system and public institutions of higher education; and,
9. Permits the Legislature, upon the Governor’s proclamation declaring a budget emergency and identifying the conditions constituting the emergency, to pass a bill that suspends or reduces by a specified dollar amount for one fiscal year the transfer of moneys from the GF to the HOPE Account.
10. Defines “budget emergency” to mean an emergency declared by the Governor, within the meaning of existing state and local government spending limits or a determination by the Governor that estimated resources are inadequate to fund GF expenditures for the current or ensuing fiscal year at a level equal to the highest amount of total GF expenditures estimated at the time of enactment of any of the three most recent Budget Acts, adjusted for both of the following:
11. The annual percentage change in the cost of living for the State, as measured by the California Consumer Price Index (CPI); and,
12. The annual percentage growth in the civilian population of the State pursuant to existing law as described in 1) below, as that section read on January 1, 2025.
13. Makes the following findings and declarations:
14. As of January 2023, California has had an estimated 181,339 people experiencing homelessness on any given day;
15. 71% of homeless Californians were unsheltered, the highest rate in the nation, meaning that they were living in streets, parks, or other locations not meant for human habitation;
16. As local communities work to house the unsheltered, more people are falling into homelessness. Larger urban areas with high numbers of people experiencing homelessness have reported that more people are falling into homelessness than they are able to house;
17. Homelessness is a complex problem, but a source of homelessness is the high cost of housing;
18. In many parts of the state, many lower income residents are severely cost burdened, paying over 50% of their income toward housing costs. One small financial setback can push these individuals and families into homelessness;
19. In the current market, 2.2 million extremely low income and very low income renter households are competing for 664,000 affordable rental units;
20. Of the 6 million renter households in the state, 1.7 million are paying more than 50% of their income toward rent;
21. The National Low Income Housing Coalition estimates that the state needs an additional 1.5 million housing units affordable to very low income Californians;
22. The private market does not provide enough affordable housing to meet the needs. In 2020, the average rent in a market rate unit was $1,900 per month;
23. Many homebuyers are shut out of the market because they are competing against all-cash buyers for extremely expensive homes. In 2021, the average home price was $633,896;
24. Although the state has invested in addressing unsheltered homelessness and increasing the supply of affordable rental and ownership housing, the state does not have a multiyear funding strategy;
25. Without a long-term strategy to fund moving people off the streets and into housing and preventing future homelessness by creating more affordable housing, the state cannot fully respond to the crisis;
26. To build a sustainable response to homelessness and the affordable housing crisis, this proposal will allocate at least 5% (based on 2025–26 projected revenues of roughly $200 billion) of the funding from the GF, or $10 billion each year, for 10 years;
27. This investment will allow the state to house at least 50,000 people who are homeless and build an additional 40,000 affordable housing units each year;
28. State government will be required to create a 10-year investment plan that includes performance goals and metrics to ensure that these funds reduce homelessness and create more affordable housing; and,
29. The funding provided by this measure is intended to be only the minimum amount of state resources put toward the goal of preventing and ending homelessness.

EXISTING LAW:

1. Defines a “change in population” for a local agency for a calendar year to mean the number resulting when the percentage change in population between January 1 of the next calendar year and January 1 of the calendar year in question, as estimated by the Department of Finance (DOF) for each city and county and existing law for each special district, plus 100, is divided by 100. For purposes of the state’s appropriations limit, “change in population” means the number resulting when the civilian population of the state on January 1 of the next calendar year, as estimated by DOF, is divided by the similarly estimated population for January 1 of the calendar year in question. (Government Code § 7901(b))
2. Established the Interagency Council on Homelessness (Cal ICH) to have and implement the following goals:
3. To identify mainstream resources, benefits, and services that can be accessed to prevent and end homelessness in California;
4. To create partnerships among state agencies and departments, local government agencies, participants in the United States Department of Housing and Urban Development’s (HUD) Continuum of Care Program, federal agencies, the United States Interagency Council on Homelessness, nonprofit entities working to end homelessness, homeless services providers, and the private sector, for the purpose of arriving at specific strategies to end homelessness;
5. To promote systems integration to increase efficiency and effectiveness while focusing on designing systems to address the needs of people experiencing homelessness, including unaccompanied youth under 25 years of age;
6. To coordinate existing funding and applications for funding. Clarifies that any action taken is prohibited from restructuring or change any existing allocations or allocation formulas: to ensure eligible applicants are informed of opportunities to apply for funding, requires Cal ICH staff to develop and regularly maintain a strategic funding guide and a calendar of new or existing funding opportunities; and, require agencies and departments administering state programs to provide Cal ICH updated information on new or existing funding opportunities on a quarterly basis;
7. To make policy and procedural recommendations to legislators and other governmental entities;
8. To identify and seek funding opportunities for state entities that have programs to end homelessness, including, but not limited to, federal and philanthropic funding opportunities, and to facilitate and coordinate those state entities’ efforts to obtain that funding;
9. To broker agreements between state agencies and departments and between state agencies and departments and local jurisdictions to align and coordinate resources, reduce administrative burdens of accessing existing resources, and foster common applications for services, operating, and capital funding;
10. To serve as a statewide facilitator, coordinator, and policy development resource on ending homelessness in California;
11. To report to the Governor, federal Cabinet members, and the Legislature on homelessness and work to reduce homelessness;
12. To ensure accountability and results in meeting the strategies and goals of Cal ICH;
13. To identify and implement strategies to fight homelessness in small communities and rural areas;
14. To create a statewide data system or warehouse, which shall be known as the Homeless Data Integration System (HDIS), that collects local data through Homeless Management Information Systems (HMIS), with the ultimate goal of matching data on homelessness to programs impacting homeless recipients of state programs, such as the Medi-Cal program and CalWORKs. Requires, upon creation of the HDIS, all continuums of care (CoCs), as defined, that are operating in California to provide collected data elements, including, but not limited to, health information, in a manner consistent with federal law, to the HDIS;
15. To set goals to prevent and end homelessness among California’s youth;
16. To improve the safety, health, and welfare of young people experiencing homelessness in the state;
17. To increase system integration and coordinating efforts to prevent homelessness among youth who are currently or formerly involved in the child welfare system or the juvenile justice system;
18. To lead efforts to coordinate a spectrum of funding, policy, and practice efforts related to young people experiencing homelessness; and,
19. To identify best practices to ensure homeless minors who may have experienced maltreatment, are appropriately referred to, or have the ability to self-refer to, the child welfare system. (Welfare and Institutions Code § 8257(b))

FISCAL EFFECT: Unknown, this measure has not been analyzed by a fiscal committee.

COMMENTS: This analysis only discusses policy issues germane to the jurisdiction of the Assembly Committee on Human Services.

Background: Homelessness in California. According to the most recent count, California has the largest homeless population in the nation, with 161,548 people experiencing homelessness on any given night. Many of those individuals, 113,660, are unsheltered meaning they are living outdoors and not in temporary shelters. Nearly half of all unsheltered people in the country are in California. The reasons for homeless are varied but is driven, in large part, by the lack of affordable rental housing, the causes of which are complex and related to lack of sufficient inventory. In the current market, 2.2 million extremely low-income and very low-income renter households are competing for 664,000 affordable rental units. Of the 6 million renter households in the state, 1.7 million are paying more than 50% of their income toward rent.

According to a January 2021 report from the Legislative Analyst’s Office (LAO), “While homelessness is a complex problem with many causes, the high cost of housing in the state is a significant contributor. Rising housing costs that have exceeded growth in wages, particularly for low-income households, put Californians at risk of housing instability and homelessness.” The LAO report also found that Californians spent a larger share of their income on rent than households in the rest of the nation, and around 2.5 million low-income households spent more than 30% of their incomes on housing. Additionally, over 1.5 million low-income renters face even more dire cost pressures and spend more than half of their income on housing.

A recent LAO publication regarding the 2025-26 Budget notes that housing and homelessness are closely interrelated issues: “Lack of enough affordable housing for low-income households is a major reason why many people fall into homelessness. Likewise, people will stay homeless, or be at risk of homelessness, until they can find stable housing they can afford. . .since 2019-20, the state has provided about $37 billion in funding for housing- and homelessness-related programs. The majority of this funding—which includes the state General Fund, special funds, voter-approved bonds, and certain federal funds—has been allocated to the Department of Housing and Community Development (HCD) and Cal ICH.”

In recent years, the federal government has moved to a Housing First model, which is an approach to addressing homelessness that prioritizes moving people quickly into permanent, affordable housing without precondition and then providing supportive services in order to prevent people from returning to homelessness. In 2016, SB 1380 (Mitchell), Chapter 847, Statutes of 2016, created the HCFC, now called Cal ICH, which is tasked with coordinating the state’s response to homelessness and implementing Housing First policies throughout the state.

Continuums of Care. At the local level, entities known as CoCs track, coordinate services for, and collect data on, the local homeless population. In many cases, a CoC is led by a county or non-profit organization, though in some cases, CoCs are led by a city. A CoC is comprised of a number of representatives of organizations that serve individuals facing homelessness, such as nonprofit homeless providers, governments, victim service providers, mental health agencies, affordable housing developers, law enforcement, and hospitals, among others. A key responsibility of a CoC is to designate and operate an HMIS, which is a local information technology system that is used to collect client-level data related to individuals and families experiencing homelessness, as well as the provision of housing and services to those individuals and families. There are currently 44 CoCs in California’s 58 counties, and in 2024, HUD awarded approximately $682 million to these entities to plan and coordinate funding for services to address homelessness.

Because the HMIS is composed of each CoC’s database, the development of the HDIS was created to allow the state to access and compile standardized homelessness data collected by individual CoCs in order to make data-driven policy decisions aimed at preventing and ending homelessness. HDIS collects client information that is already required by HUD, as well as other information common to HMIS implementation. Phase I of HDIS focused on establishing a centralized, statewide data warehouse to aggregate and standardize information from the state's 44 local CoCs. Each CoC operates its own Homeless HMIS, and Phase I aimed to integrate these disparate systems into a cohesive platform.​The integration of additional state-level programs, such as CalWORKs and CalFresh, is planned for Phase II of the HDIS project. This phase aims to incorporate data from various state departments to enhance the system's capacity for cross-sector analysis and service coordination.

Housing and Homelessness Services within Social Services. Cal ICH is co-chaired by the Secretary of the California Health and Human Services Agency (CalHHS) and is responsible for coordinating statewide policy and funding on homelessness, while the California Department of Social Services (CDSS) provides direct grant and housing assistance programs designed to assist families in crisis, seniors and vulnerable adults, people with disabilities, and helping families involved in the child welfare system to reunite.

CDSS oversees a number of housing programs that are administered and operated at the local level. CDSS’ housing and homelessness programs are unique because they target specific populations and, typically, provide more than just housing. Anti-poverty advocates credit these programs for keeping these families housed. However, the funding for these programs is limited and unstable due to proposed cuts in the state budget. The following are CDSS housing programs:

• Project Roomkey provides non-congregate sheltering for people experiencing homelessness, to protect human life, and minimize strain on health care system capacity.
• CalWORKs Housing Support Program (HSP) fosters housing stability for families experiencing and at risk of homelessness. HSP assists CalWORKs families who are experiencing or at-risk of homelessness in obtaining permanent housing and can provide temporary shelter, help with moving costs, short to medium-term rental subsidies, and wraparound case management. Since 2015, CalWORKs recipients approved for HSP have tripled. According to the Assembly Budget Subcommittee #2, nearly all counties report they could use additional funding to further meet the needs of their community. Counties have shared that they are seeing more families apply for CalWORKs who are unstably housed and are facing a myriad of other complex challenges including behavioral health, substance use, and domestic violence. Counties also note that ongoing services are typically needed to sustain a successful transition from CalWORKs. Counties have also reported that the core components of CalWORKs HSP have supported families in addressing barriers to housing in a way that most families could not have done on their own while experiencing homelessness. Some counties have found that families who have success in the HSP had extensive utilization of intensive case management, family stabilization supports, and subsidized employment.
• CalWORKs Homeless Assistance (HA) aims to help CalWORKs families meet the costs of securing or maintaining permanent housing or emergency shelter. The CalWORKs HAP serves eligible CalWORKs recipients, or apparently eligible CalWORKs applicants, who are homeless or at risk of homelessness. CalWORKs HA can provide payments for temporary shelter once every 12 months with exceptions, as well as payments to secure or maintain housing, including a security deposit and last month’s rent, or up to two months of rent arrearages. The number of CalWORKs families approved for HA increased from 4.1% in 2015-16 to 11.5% in 2023-24. This represents approximately 63,004 families.
• Bringing Families Home Program (BFH) program helps reduce the number of families in the child welfare system experiencing or at risk of homelessness, increase family reunification, and prevent foster care placements. BFH serves families so they can achieve housing stability and successfully reunify.
• Housing and Disability Advocacy Program (HDAP) assists homeless and disabled individuals apply for disability benefit programs, while also providing housing support. HDAP requires that participating counties offer outreach, case management, benefits advocacy, and housing supports to all program participants.
• Home Safe Program supports the safety and housing stability of individuals involved in Adult Protective Services who are experiencing, or at imminent risk of experiencing, homelessness due to elder or dependent adult abuse, neglect, self-neglect, or financial exploitation by providing housing-related assistance using evidence-based practices for homeless assistance and prevention.

HOPE Account. This measure would amend the California Constitution to establish the HOPE Account, requiring at least 5% of GF revenues to be deposited annually from fiscal year 2027–28 through fiscal year 2036. This funding would be used exclusively for:

• Housing and supportive services to prevent and end homelessness;
  
• The development, acquisition, rehabilitation, and preservation of rental housing that is affordable to extremely low, very low, and low-income households, including necessary operating subsidies;
  
• Affordable home ownership opportunities for low- and moderate-income households, including, but not limited to, down payment assistance and development of new units; and,
  
• Affordable homeownership opportunities for low- and moderate-income households.

The Author contends the few dedicated streams of funding from the GF that prioritize homelessness or housing initiatives are insufficient. Many funds that are currently allocated are subject to cuts or removal from yearly budgets creating volatility in the housing space. The Author states this 10-year dedication will give the state a better ability to plan for services for our homeless population while construction on new homes takes place.

Author’s Statement: According to the Author, "Homelessness and the affordable housing crisis are two of the most pressing issues facing Californians today. [This legislation] seeks to tackle these challenges by creating the Housing Opportunities for Everyone (HOPE) Account. This account would direct at least 5% of California’s General Fund revenues each year toward homelessness prevention and the development of affordable housing. It is vital that California uses every tool available to ensure we are fulfilling our commitment to providing housing for all residents. This funding mechanism would create stability in the housing market, as the state could forecast housing needs on a yearly basis. To ensure accountability, the Business, Consumer Services, and Housing Agency would need to develop a 10-year investment strategy demonstrating how the funds in this account would be allocated. [This measure] is a critical step in creating a California where everyone has a place to call home."

Equity Implications: California’s current budgetary and policy framework does not guarantee sustained, dedicated funding to address homelessness and the extreme shortage of affordable housing. Existing programs often rely on year-to-year appropriations, bond measures, or emergency allocations, which are reactive, inconsistent, and inadequate to meet the scale of need—especially in low-income communities and communities of color that are disproportionately impacted.

Double referral: This measure was previously heard in the Assembly Committee on Housing and Community Development on April 30, 2025, and was approved on a 8-2 vote.

Policy Considerations: This bill makes references to a HOPE Account; however, there is an existing HOPE Account which provides a trust account to an eligible child who lost their parents or guardian to COVID-19.

Should this bill move forward, the author may wish to consider renaming this account to avoid confusion.

Proposed Committee Amendments: The Committee proposes amendments to address policy considerations stated above to do the following:

• Rename this bill the Housing Opportunities Made Equitable (HOME) Act.
• Rename the account, the HOME Account.

RELATED AND PRIOR LEGISLATION:

ACA 14 (Wicks) of 2022 was substantially similar to this measure. ACA 14 was referred to the Assembly Committee on Appropriations but was not set for hearing.

REGISTERED SUPPORT / OPPOSITION:

Support

African Methodist Episcopal Church

Agee Global Solutions, LLC (UNREG)

Bryant Temple AME Church

Carrie's Touch

Friendship Community Development Corporation

Inland Equity Partnership

Resources for Community Development

Ward Economic Development Corporation

Opposition

None on file.

Analysis Prepared by: Jessica Langtry / HUM. S. / (916) 319-2089

Date of Hearing: April 30, 2025

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

Matt Haney, Chair

ABPCA Bill Id:ACA 4 (

Author:Jackson) – As Introduced Ver:January 24, 2025

SUBJECT: Homelessness and affordable housing

SUMMARY Adds an amendment to the Constitution requiring that at least 5% of General Fund revenues each year for the next ten years be placed in the Housing Opportunities for Everyone (HOPE) Fund to support the creation of affordable housing, fund housing and services to prevent and end homelessness, and support homeownership opportunities for low- and moderate-income households. Specifically, this bill:

1. Establishes the HOPE Act and the HOPE Fund account within the General Fund.
2. Requires the State Controller, for each fiscal year beginning in 2025-26 through September 30, 2035, no later than October 1 of each fiscal year to transfer from the General Fund to the HOPE Account a sum equal to five percent of the estimated amount of General Fund revenues for that fiscal year.
3. Requires the annual estimation of General Fund revenues deposited in the HOPE Fund to occur after all other General Fund obligations incurred by the state, on or before the date upon which the measure that adds this section becomes effective have been met, including, but not limited to, the state’s funding obligation to the public school system and public institutions of higher education pursuant to Section 8 of Article XVI.
4. Authorizes the Legislature to appropriate funds in the HOPE account to the Business, Consumer Services, and Housing Agency (BCSH) to only fund the following:
5. Housing and services to prevent and end homelessness;
6. Development, acquisition, rehabilitation, and preservation of rental housing that is affordable to extremely low-, very low-, and low-income households, including necessary operating subsidies; and
7. Affordable homeownership opportunities for low- and moderate-income households, including, but not limited to, down payment assistance and development of new units.
8. Requires BCSH to develop a 10-year investment strategy, with input from stakeholders, that demonstrates how moneys in the HOPE Account will be used to produce affordable housing and end homelessness through specific performance measures and benchmarks.
9. Requires BCSH, on or before October 1 of each year, and until October 1, 2035, to annually report to the Legislature on its progress in meeting the performance measures and benchmarks contained in the investment strategy.
10. Provides that if the Governor declares a budget emergency, as defined, the Legislature may pass a bill to suspend or reduce amounts deposited in the HOPE Fund.

EXISTING LAW:

1. Article XVI of the California Constitution sets forth rules for calculating a minimum annual funding level for K–14 education.
2. Article XVI Section 20 of the California Constitution establishes the Budget Stabilization Account (BSA) and requires the following:
3. Annual transfer of 1.5% of general fund revenues to the state BSA;
4. Additional transfer of personal capital gains tax revenues exceeding 8% of General Fund revenues to BSA and, under certain conditions, a dedicated K–14 school reserve fund;
5. Half of the BSA revenues must be used to repay state debts and unfunded liabilities;
6. Allows limited use of funds in case of emergency or if there is a state budget deficit; and
7. Caps the BSA at 10% of general fund revenues, directs the remainder to infrastructure.

FISCAL EFFECT: Unknown.

COMMENTS:

Author’s Statement: According to the author, “"Homelessness and the affordable housing crisis are two of the most pressing issues facing Californians today. ACA 4 seeks to tackle these challenges by creating the Housing Opportunities for Everyone (HOPE) Account. This account would direct at least 5% of California’s General Fund revenues each year toward homelessness prevention and the development of affordable housing. It is vital that California uses every tool available to ensure we are fulfilling our commitment to providing housing for all residents. This funding mechanism would create stability in the housing market, as the state could forecast housing needs on a yearly basis. To ensure accountability, the Business, Consumer Services, and Housing Agency would need to develop a 10-year investment strategy demonstrating how the funds in this account would be allocated. ACA 4 is a critical step in creating a California where everyone has a place to call home."

HOPE Act: The HOPE Act would require that five percent of General Fund revenues, each year for the next ten years, be used to build and rehabilitate affordable rental housing for lower-income households, housing and services to prevent and end homelessness, and affordable homeownership opportunities for low- and moderate-income households. BCSH would be required to develop a 10 year investment strategy to show how the funds will be spent via measurable outcomes related to increasing affordable housing and ending homelessness. Each year, BSCH would report outcomes to the Legislature in October to inform the next year’s budget discussion. The Legislature would appropriate funds from the HOPE Account each year as part of the budget process.

Homelessness in California: Based on the 2024 point in time count, 187,000 people experiencing homelessness on any given night California. Many of those people – 78% or 143,900 – are unsheltered, meaning they are living outdoors and not in temporary shelters. Nearly half of all unsheltered people in the country were in California during the 2024 count. Fifty-seven percent of people experiencing homelessness in California spent most nights outdoors, 21% in a vehicle. Homelessness grew at a higher rate in the nation (18%) than in California (3%) from 2023 to 2024, driven by a 25% jump in sheltered homeless in the US compared to 9% in California. The homelessness crisis is driven by the lack of affordable rental housing for lower income people. In the current market, 2.2 million extremely low-income and very low-income renter households are competing for 664,000 affordable rental units. Of the six million renter households in the state, 1.7 million are paying more than 50% of their income toward rent. The National Low Income Housing Coalition estimates that the state needs an additional 1.5 million housing units affordable to very low-income Californians.

According to the Statewide Housing Plan released in 2022 by the Department of Housing and Community Development (HCD), the state needs 2.5 million new housing units to meet the demand. Specifically, for lower-income households, the state needs 1.2 million units for households who make 80% of the area median income or less. According to HCD, the state needs 180,000 units of housing built a year to keep up with demand – including about 80,000 units of housing affordable to lower-income households.

The High Cost of Housing: The high cost of housing is the cause of homelessness in California. A study by the National Low Income Housing Coalition found that West Virginia has 50 affordable and available rental homes for every 100 extremely-low-income households, more than double the number that California has. A family in West Virginia can afford a two-bedroom rental on less than $17 an hour – the second-lowest figure in the nation. In California a family would need more than $40 per hour to be able to afford an average two-bedroom rental.

The Legislature has passed major legislation in recent years to allow affordable housing to be built on almost any site in the state. However, the lack of housing overall and in particular the continued lack of sufficient affordable housing is a problem that is decades in the making. Millions of Californians, who are disproportionately lower income and people of color, must make hard decisions about paying for housing at the expense of food, health care, child care, and transportation—one in three households in the state doesn't earn enough money to meet their basic needs. Currently, according to state homelessness data, for every five individuals who access homelessness services in California, only one is housed each year, leaving four unhoused.

According to the California Housing Partnership, although the state has doubled production of new affordable rental homes in the past five years, the state only funded 15% of what is needed to meet its goals. Californian voters have ranked housing affordability and homelessness as the two most important issues for the state to address. Yet, affordable housing funding at both the state and federal has never been consistently or adequately funded to meet the need.

Federal Funding: In the 1930s, the federal government began funding affordable housing construction in response to the Great Depression. In 1934, Congress created the Federal Housing Administration to make homeownership more accessible for more households through low down payments and long-term mortgage products. In 1937, the U.S. Housing Act began to fund the construction of public housing for lower income households. The housing stock at this time was very low quality and public housing was a significant improvement for lower-income households; however, over time, the revenues brought in from resident rents could not sustain the cost of operating and maintaining public housing, and the housing deteriorated.

In 1965, Congress created the Department of Housing and Urban Development (HUD), the first cabinet level housing entity. In the 1960s, HUD began providing subsidies to public housing agencies (PHAs) that would help make up the difference between revenue from rents and the cost of adequately maintaining the housing. In the 1950s and 1960s, HUD also began providing low interest rates and subsidies to private entities to purchase and rehabilitate rental housing and offer it at affordable rates. In 1973, President Nixon imposed a moratorium on all HUD programs to fund the new construction of homeownership and rental housing. In 1974, the Housing and Community Development Act of 1974 significantly overhauled HUD housing programs and moved toward block grants that granted local jurisdictions more authority, creating the Section 8 rental assistance program and the Community Development Block Grant program.

In the 1980s, the deinstitutionalization of persons with mental illness and the decline in supports for lower income households led to a sharp increase in homelessness. In response, Congress passed the McKinney-Vento Act of 1987 to provide social service programs at HUD to address homelessness.

In the 1980s and 1990s, private landlords began to opt-out of the Section 8 Housing Choice Voucher program, leading to a push to create more permanent affordable housing units. As a result, the Tax Reform Act of 1986 created the Low Income Housing Tax Credit, which provides tax credits to those investing in the development of affordable rental housing. That same Act codified the use of private activity bonds for housing finance, authorizing the use of such bonds for the development of housing for homeownership, as well as the development of multifamily rental housing.

Although the American Rescue Plan from 2021-22 provided one-time funding for emergency shelters and rental assistance in response to COVID, no significant federal investment has occurred in addressing the housing needs of lower income households in the last 30 years. The largest federal ongoing funding programs at this time are the Housing Choice Voucher Program ($3 billion a year) and the low-income housing tax credit program. Continued funding for the Housing Choice Voucher Program is in jeopardy based on the Trump Administration’s early efforts to cut federal programs.

State funding: Historically, the largest state investment in housing has been in homeownership. The state provides approximately $5 billion in subsidy each year to homeowners through the mortgage interest deduction. The investment in affordable rental housing is far less and much less consistent. The chart below shows the investment the state has made over the last thirteen years and highlights the lack of consistent funding and the complexity of funding sources.

Voter-Approved Bonds: Over the past twenty years, the state has largely relied upon voter-approved bonds to fund the construction or rehabilitation of affordable rental housing, homeownership units and down payment assistance, and housing for special populations including veterans and special needs groups. The past several voter-approved bonds included:

• Proposition 1 of 2024: Authorized $6.4 billion in bonds to finance behavioral health treatment beds, supportive housing, community sites, and funding for housing veterans with behavioral health needs. The Department of Health Care Services (DHCS) will administer $4.4 billion of these funds for grants to public and private entities for behavioral health treatment and residential settings. $1.5 billion of the $4.4 billion will be awarded only to counties, cities, and tribal entities, with $30 million set aside for tribes. HCD will administer $1.972 billion for permanent supportive housing for individuals at risk of or experiencing homelessness and behavioral health challenges. Of that amount, $1.065 billion will be for veterans. The initiative also revised how counties use money collected by Proposition 63: the Mental Health Services Act of 2004, shifting 30% of funds to housing supports to help people experiencing homelessness find and maintain permanent housing. These funds are ongoing and if used correctly could provide an ongoing fund sources to support rental assistance and services for permanent supportive housing.
• Proposition 1 of 2018: The Veterans and Affordable Housing Act of 2018 authorized $4 billion in voter-approved bonds. One billion were revenue bonds to fund the CalVet homeownership program and $3 billion were to fund existing affordable housing programs that fund the construction of affordable rental housing for farmworkers, special needs populations, and lower-income households and programs to create new homeownership options for lower-income households.
• Proposition 41: Veterans Housing and Homeless Prevention Bond Act of 2014 authorized $600 million in general obligation bonds to fund the acquisition, construction, rehabilitation, and preservation of multifamily supportive housing, affordable transitional housing, affordable rental housing, and related facilities for veterans and their families.
• Proposition 1C: Housing and Emergency Shelter Act of 2006 authorized $2.85 billion in voter-approved bonds to fund existing affordable housing programs that fund the construction of affordable rental housing for farmworkers, special needs populations, and lower-income households and programs to create new homeownership options for lower-income households.
• Proposition 46: Housing and Emergency Shelter Crisis Act of 2002 authorized $2.1 billion for existing affordable housing programs that fund the construction of affordable rental housing for farmworkers, special needs populations, and lower-income households and programs to create new homeownership options for lower-income households.

AB 736 (Wicks) which recently passed out of this committee on a vote of 10-1 would place a $10 billion bond on the spring 2026 ballot to fund various affordable housing programs.

Permanent Funding: The state has a small number of ongoing funding sources for affordable housing, including the Building Homes and Jobs Act of 2017 and the state low-income housing tax credit.

The Building Homes and Jobs Act: In 2017, SB 2 (Atkins) established the Building Homes and Jobs Act, which for the first time, created an ongoing, dedicated revenue source for affordable housing. The Act imposes a $75 fee on real estate transaction documents, excluding commercial and residential real estate sales, to provide funding for affordable housing. The Act required that in the first year, funds collected from the recording fee be split between homelessness programs and to localities to update planning documents and zoning ordinances. In year two and beyond, 70% of the funds are distributed directly to locals and 30% to the state to be spent for the following purposes: farmworker housing, state incentive programs, and mixed income multifamily residential housing affordable to lower and moderate income housing. Revenues generated by SB 2 are heavily dependent on the number of homeowners that refinance their home loans. Historically the revenues collected from SB 2 have ranged from $250 million to $520 million a year.

State Low-Income Housing Tax Credits (LIHTC): The state LIHTC was statutorily created in 1987 and requires that approximately $70 million per year be available for the program. In 2019, AB 101 (Committee on Budget), Chapter 159 provided an additional $500 million in state LIHTCs. The $500 million is not statutorily required but has been included in each budget since 2019 as part of the base budget – meaning the Governor has included it in his January budget. The additional $500 million LIHTCs were coupled with tax-exempt bonds and the 4% federal credits, in part, to encourage developers to fully utilize any remaining federal tax-exempt bonds that were being left on the table. The Governor did not include $500 million for the LIHTC in his January 2025 proposed budget.

Affordable Housing and Sustainable Communities Program (AHSC): AHSC is funded through cap-and-trade revenues and is used for the infrastructure costs of affordable housing developments. It aims to promote dense, transit-oriented development and lower housing-related carbon emissions by funding developments that have a measurable reduction in greenhouse gas emissions because of proximity to transit. In January of 2022, the Strategic Growth Council announced $808 million in funding awards for 37 affordable housing projects across the state. Since the AHSC program launched it has invested over $2.4 billion across the state through 164 sustainable projects, creating over 15,000 affordable units and reducing almost 4.4 million tons of GHG emissions over the projects’ operating lives.

One-time General Funding: Although historically the General Fund has not been a significant source of funding for affordable housing, beginning in 2019, Governor Newsom and the Legislature have included significant one-time resources for affordable housing.

In 2019-20 through 2023-24, the Budget provided a total of about $12 billion for various one-time, discretionary housing initiatives. In Budget year 2021-22, the amount invested is significantly higher because of federal funds the state received through the American Rescue Plan in response to COVID. These totals may not reflect funding provided through other programs that serve people who are homeless or at risk of homelessness found in the human services programs.

The lack of permanent ongoing funding to construct affordable housing has contributed to the severe affordability crisis particularly for lower-income households and a growing number of people experiencing homelessness.

Existing constitutional limits on state revenues: The California Constitution includes several limits on general fund spending.

Proposition 98: In 1988, Proposition 98 enacted Section 8 of Article XVI of the California Constitution setting forth rules for calculating a minimum annual funding level for K–14 education. The state commonly refers to this level as the minimum guarantee and requires the state to set aside approximately 40 percent of general fund revenues to K-14 education. Proposition 98 has been criticized for its complexity and some question if the amount of funding for K-14 education provides clear evidence that school funding is higher today or school funding decisions are less political today than they would have been absent the formulas.

Proposition 2 Budget Stabilization Account (Rainy Day Fund): In 2014, Proposition 2 enacted Article XVI Section 20 of the California Constitution and made two major constitutional changes to state budgeting. First, it created new rules for minimum annual deposits into the Budget Stabilization Account (BSA), the state’s rainy-day fund. Second, Proposition 2 created new requirements that the state spend a minimum amount each year, until 2030, to pay down specified debts. Proposition 2 has two avenues for making reserve deposits and paying debt. First, it requires the state to set aside 1.5 percent of total General Fund revenues (we referred as the “base amount”). Second, it requires the state to put aside a portion of capital gains revenues that exceed a specified threshold (this is “excess capital gains”). The state combines these two amounts and then allocates half of the total to pay down debts and the other half to build the rainy-day reserve. Under Proposition 2, the state must continue to deposit funds into the BSA until it reaches a threshold balance of 10 percent of General Fund tax revenue. Once the BSA reaches this threshold, required deposits that would bring the fund above 10 percent of General Fund taxes instead must be spent on infrastructure. (Once at the 10 percent threshold, the Legislature can continue to make optional deposits into the BSA at its discretion.)

The Legislature can suspend a BSA deposit or make a withdrawal from the mandatory share of the BSA if the Governor declares a budget emergency. The Governor may call a budget emergency in two cases: (1) if estimated resources in the current or upcoming fiscal year are insufficient to keep spending at the level of the highest of the prior three budgets, adjusted for inflation and population, or (2) in response to a natural or man-made disaster.

Arguments in Support: According to Resources for Community Development, “As a provider of affordable homes, we know the essential role affordable housing plays in every California community — providing shelter, support, and community to the state’s most vulnerable residents. California currently has a gap of 1.3 million homes affordable to lower-income households and over 339,000 people in California experienced homelessness in 2024. The Governor and Legislature have demonstrated their commitment to addressing this crisis by using past budget surpluses to fund one-time investments. ACA 4 will build on these efforts and provide a permanent, ongoing funding source.”

Arguments in Opposition: The California Association of Realtors (C.A.R.) opposes this ACA, unless it is amended to prohibit the conversion of single-family homes to deed restricted corporate owned rental housing; require 25% of HOPE Act funds to be dedicated to CalHFA’s Dream for All equity sharing downpayment assistance program; and, to include C.A.R. as a stakeholder in in the oversight and management of HOPE Act funds.

Related Legislation:

AB 736 (Wicks) of the current legislative session would place a $10 bond on the June 2026 ballot to fund various affordable housing programs. This bill is pending a hearing in the Assembly Appropriations Committee.

AB 1165 (Gipson) of the current legislative session would establish the California Housing Justice Fund in the General Fund (Fund) and requires the Legislature to invest an ongoing annual allocation in the Fund in an amount needed to solve homelessness and housing unaffordability. This bill is pending a hearing in this committee.

AB 71 (L. Rivas) of 2021 would have conformed state law to the federal Global Intangible Low-Taxed Income (GILTI) provisions and taxed repatriated income to finance the Bring California Home Fund. Held on the Assembly Floor.

AB 1905 (Chiu) of 2020 would have eliminated the mortgage interest deduction on second homes and used the General Fund savings to finance immediate and long-term solutions to homelessness by moving homeless individuals and families into permanent housing. Estimated possible revenues of $300 million each year. Held by the author in this committee.

SB 2 (Atkins), Chapter 364, Statutes of 2017: Established a permanent funding source for affordable housing that ranges from $300 - $500 million a year and is dependent upon homeowners refinancing a home or making other changes to the ownership.

AB 71 (Chiu) of 2017 would have eliminated the mortgage interest deduction on second homes and used the general fund savings to increase the low income housing tax credit. Estimated possible revenues of $300 million each year. Held on the Assembly Floor.

REGISTERED SUPPORT / OPPOSITION:

Support

Agee Global Solutions, LLC (UNREG)

Inland Equity Partnership

Resources for Community Development

Individuals - 1

Opposition

California Association of Realtors (oppose unless amended)

Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085