Assembly Budget Subcommittee No. 5 on State Administration

Good afternoon, and welcome to assembly budget subcommittee five on state administration. Sorry. We're a little late. We had the governor join us in caucus today, so there was lots of questions. This hearing today comes at a time when the state is again facing a constrained budget.

Just two years ago, the state began facing budget shortfalls. Today, we are once again asked to make difficult choices with limited resources. The housing crisis has only grown more urgent in the same time period. Affordability remains out of reach for too many Californians, and the gap and the gap between what people earn and what housing cost continues to widen. Homelessness continues to rise across the state.

The and there are individuals and families who deserve stability, safety, and a fair chance to move forward. We are being asked to make decisions with limited gen general fund resources. That reality demands discipline, but it also demands clarity about our priorities. Housing must remain at the top of that list. Stability in housing is the foundation for success in education, health, and workforce participation.

When housing is out of reach, every other challenge becomes harder to overcome. And I just wanna take a personal note here. Many of us that come to this committee and here particularly are focused on housing. So we know that you are the cheerleaders and the advocates. But all too often in our budget, we have compete competing priorities that are as valid health care, food.

But I'm a firm believer in unless we address the top three needs of Californians, which are housing, food, and water, everything else becomes secondary. And I will continue to fight and advocate for every dollar we can within this budget because as was noted, if someone can have a reliable place to call home, they certainly are going to have better academic success. They're certainly going to have better health success, and they're certainly going to be able to get to work.

And if they happen to have other needs, like mental health needs, we know that if they are in a place where they can receive their medication on a regular basis, all of those indicators improve. So I just dwell on this because to me, it's always been about a holistic approach.

So, again, our task is to protect what is working, examine what is not, and make thoughtful choices about where limited dollars can have the greatest impact. This subcommittee has a responsibility to approach this moment with discipline and purpose. Every investment must be clear in its intent and accountable in its results. Today, our hearing will focus on the Business Consumer Service Agency, Housing and Homelessness Agency, Housing Development and Finance Committee, Department of Housing and Community Development, and California Interagency Council on Homelessness.

This is an in person hearing with all panelists testifying in person.

We will take questions from members of the subcommittee after each panel. And I understand that there are many housing advocates who are in the audit audience waiting to provide public comments on budget requests related to housing that are not agendized. We want to make sure that we hold space for those comments, and we will take them at the end of the hearing after issue seven. Public comments will be limited to one minute.

And if you are unable to attend this hearing in person, you may submit your comments via email to [email protected].

That's a lot. Alright. We are gonna go ahead and begin, and we are gonna invite, those participating in issue number one, the governor's reorganization plan, codification trailer Bill Language, to present up here our panelists. And before we open it to the panelists, let's make sure if you are a panelist, you introduce yourself. Secondly, do we have either of our members here that wish to make any comments before we begin?

Nope.

Alright. Then we're gonna jump right in, and we will get begin with issue number one, trailer bill language.

Good afternoon.

And I do wanna thank our secretary, Tomiquia Moss, for joining us and our director and also our director. Thank you so much.

Good afternoon. Thank you so much chair, members of

the committee. It's truly an honor to be with you this afternoon. My name is Tomiquia Moss, and I serve as the secretary of our business consumer services and housing agency. I've brought a bevy of staff, who will be with you all afternoon, sharing some of the fantastic work that we're bringing forward today. I wanted to first just start my remarks with gratitude.

Chair to you in particular, you have truly been a champion, in your service in the legislature on this issue over the last seven and a half or twelve, thirteen. Long time. I'm realizing it's probably different than

Yeah.

Our our time period. But just acknowledging that we are eleven weeks away from a historic moment for the state of California, where with your partnership and the members of this committee, we will stand up California's very first Housing and Homelessness Agency. You talked in your opening remarks about the urgency and need to have, infrastructure to address our housing and homelessness needs in perpetuity.

And this agency creating this agency in partnership with the legislature and the administration and many stakeholders in this room gives us that opportunity to continue this great work, moving forward. So I just wanted to start my remarks in deep gratitude to you for your leadership and to members of this body who I've known for quite some time who have been in this fight with us all.

So as you all may recall, last year, we worked together to create both of our agencies focused and more effective on the issues in which they they, manage our Housing and Homelessness Agency as well as our Business Consumer Services Agency. As of 07/05/2025, the reorganization plan became effective. And today, we are here to discuss the proposed trailer bill language that will codify these changes to ensure that existing law aligns with the statute.

I wanted to take this opportunity to update you all on our progress toward implementing the reorganization changes, which is what I will share. But I wanted to give a couple of moments for my colleagues who have joined me this afternoon, our director of HCD, Gustavo Velasquez, and our director of CalHFA, Tony Sertich, to provide a couple of remarks before I go into some detail around implementation.

Thank you. Welcome.

Thank you, secretary. Chairwoman Quirk Silva, members of the committee, Gustavo Velasquez, director of HCD. I wanna thank you, chair and the committee, for the opportunity to present here today alongside secretary and my colleague, Tony Sertich, as this body has been instrumental in delivering the investments and policies that are reflected throughout HCD's programs, leading to the progress we have made in taking on California's housing and homelessness crisis.

In 2025 alone, HCD announced nearly $2,800,000,000 in funding for affordable housing, homelessness services, infrastructure, community development, one of the most significant in the department's history in spite of the current economic conditions. Across three rounds of the original Homekey program, HCD has awarded nearly $4,000,000,000 to fund 16,000 homes expected to house more than a 175,000 Californians over their lifetimes.

Homekey Plus, the new version of the program under Proposition One has already awarded more than 600,000,000 to add 1,800 new homes, many of them serving veterans. These investments represent new homes, new opportunities for residents in communities throughout our state. More than a $100,000,000 for a special multifamily program to support recovery and rebuilding efforts after the devastating fires in Los Angeles County. Six federally funded programs under which HCD has awarded $600,000,000 to 286 projects for housing, homelessness, and community development.

Beyond these investments, we know money is very important, but beyond these investments, HCD has also helped turn policies into progress through its accountability and enforcement.

We are beginning to see the results of this work. In 2024, homelessness increased nationally by over 18%. California, however, limited its overall increase to 3%, a rate lower than 40 other states with the most significant gains in unsheltered homelessness. California saw the largest decrease in veteran homelessness in the nation in 2025, and yearly residential construction grew by nearly 60% from 2018 to 2024. While during the same period, the time it took to entitle new housing was cut in half.

These results did not happen by accident. They are the product of sustained, targeted, and accountable investments at the state level, working in close partnership with our local governments and service providers. As the secretary mentioned, the July transition will further centralize the developer facing affordable housing finance programs and reducing duplication and bureaucratic delay, something developers, advocates, and affordable housing experts have been asking for decades. Amongst the solutions, experts propose to reduce the astronomical cost of getting housing built in California is the integration of our competitive programs.

The certainty of a one stop application center center under this new housing finance and development committee.

That certainty, predictability, and open and transparent process is recognized as a must do step that, again, has not been addressed until now, and we are here because of that. With that, I'll turn it over to Tony Sertich, director of CalHFA, for his remarks. Thank you.

Thank you, director Velasquez. Good afternoon, chair Quirk-Silva and assembly members. My name is Tony Sertich, and I serve as the executive director of the California Housing Finance Agency. I am both honored and excited to serve alongside Moss and director Velasquez. Not only do I get to work alongside these incredible leaders, but we also also share the shape same vision and hopes for addressing California's housing crisis.

Like my colleagues, I've been working in housing policy and finance for my entire career. And as such, I can see how far California has come in its commitment to better housing outcomes for Californians and the also the opportunities we still have to grow. Together, we are actively identifying and working to implement new ideas to create more housing faster and at less cost.

According to the Turner Center at UC Berkeley, the cost to build a 100 unit affordable project increased from $265,000 per unit in 2016 to $425,000 per unit in 2020. That was six years ago.

It is imperative that California take decisive action to increase the number of units built by reducing costs, timelines, and unnecessary complexities. And California has started to just do that, to do just that. I apologize. Between bill packages aimed at reducing construction barriers and costs to approving the governor's reorganization plan last year, All the pieces are coming together to ensure our efforts have real impact.

As I sit beside my fellow housing finance and development executive committee members, I see how each of us and our teams bring varied program expertise, years of experience, and a dedication to the work to ensure our plans meet success.

We have all been collaborating to identify solutions for the most common barriers or issues within our state housing finance system through the assembly bill 519 workshop work groups. Together, we have discussed various ways to solve the same problems, long timelines, multiple duplicative and overlapping applications, and a cohesion between multiple programs all supporting the same project. As you will hear in later budget items, the proposals today represent the culmination of that best thinking.

I am genuinely excited to be part of these monumental changes and to be here to see the impact they will create on housing in California. Thank you.

Thank you both. So just to provide a bit of a recap on the reorganization efforts, the transformation of the current agency, BCSH, is shifting our approach to consumer protections, business regulations, civil rights, and housing and homelessness. And to me, these are more than organizational changes. This isn't just shifting the the people on the org chart.

It is a strategic shift in helping to design and improve how we do governmental services for Californians, our communities, and the industries across the state that interact with our programs and services.

Creating two focused agencies will help us improve accountability, impact, align missions, and act more effectively. And we are on track to meet our envisioned deadlines. Since the reorganization became effective, our teams have established work groups to implement the changes necessary for both agencies and the new housing development and finance committee. We've partnered with gov ops, the department of finance, and the state controller's office to stand up necessary fiscal and administrative infrastructure.

We've also developed operational plans with the department of consumer affairs and HCD to ensure that personnel and fiscal services transfer smoothly.

We've continued our robust engagement with stakeholders, developers, local government, our tribal partners, and others to make sure that the agencies that we are building are informed by best practices and help our consumers and Californians utilize and have access to housing faster and cheaper. We are actively recruiting, and we hope to onboard new staff starting in May. And finally, we are working toward establishing draft guidelines and a charter for the new housing development finance committee.

The governor's budget proposal, as we will discuss in items, two and three, will utilize the new organizational structure that we've been describing to streamline California's housing finance system so that projects can move from award to construction much faster. Through the new housing development finance committee or HDFC, which is created through the reorganization, we are implementing long calls.

I think Gustavo mentioned this earlier from the legislatures, from our housing partners, from community about how do we better coordinate and align our housing funding system. As you all know, we have one of the most complex housing funding systems in The United States, and this is really our attempt to address some of those long standing challenges.

One data point that I like to highlight that sort of represents the challenges that we're up against is that for in our current system, for every additional funding source added, a project adds at least four additional months of time and $20,000 in cost per unit. And we all know that that is unacceptable. The proposals discussed today will ensure that state resources deliver more housing faster and cheaper, I'm a keep saying it, with less administrative complexity.

And that this reform will ensure that every housing dollar stretches further, allowing the state to produce more affordable homes with the same level of investment. Looking forward, the HDFC executive committee, which is represented by the directors and myself here at this table, will ensure that the committee brings about the increased transparency, consistency, and predictability that many of our stakeholders have demanded, and that will ensure that our affordable housing programs are delivered with the efficiency and execution needed.

We will also incorporate much of the extensive feedback that we've received from AB 519 working group, which has been which has been, established and moving forward for quite some time now.

Its goals, around implementing a single application with a single, review and award process are are deeply underway, creating a more streamlined post award process, increased and more effective coordination with our partners on the asset management side and compliance side of the house, as well as identifying new tools and ideas to continue to increase our program's efficiency and impact.

This budget builds on the work that we've already accomplished through y'all's leadership and ours, and the it pushes our progress forward to really create the kinds of efficiency and increased impact that Californians deserve.

Thank you so much for the opportunity to be here, and we're happy to take any questions that you might have.

Thank you. With that, we are going to go to our Department of Finance.

Isabel Fairclough, department of finance. Nothing to add, but available for questions.

And our LAO.

Good afternoon, madam chair and members. Paul Steenhausen with Legislative Analyst's Office. We don't have any concerns with this proposed trailer bill language as it reflects the governor's reorganization plan that the legislature approved last year.

Thank you. With that, we'll bring it back to the committee. Do we have questions? Assemblymember.

Yeah. Thank you, madam chair, and, thank you, madam secretary, for being here and briefing us on the reorganization. I think we just need so much action on housing and homelessness in the state. I hope the new arrangement helps facilitate expedited dispersal of resources to counties and COCs. In Riverside County, and I may be a little off topic here, but because I got you here, I wanna take the opportunity.

We've seen reductions in homelessness directly related to their HHAP funding. They've served over 32,000 people providing outreach, shelter, permanent housing through a coordinated entry system, and they were just granted around six funds. So thank you for that. But I do wanna know how you plan to build on those successful efforts without any new funding in the budget?

Well, it's a great question. Thank you so much. First of all, I just wanna acknowledge Riverside's leadership in this work. Mayor Lock Dawson has been doing a tremendous job in advancing the work of addressing housing, the housing crisis, and homelessness in, the city of Riverside and working in partnership with the county. You know, the way I look at our HHAP funding, although it is a singular annual app funding, it is distributed over multiple years.

And what we've been able to see is over the many years of HHAP funding, this is now round six as you mentioned. We have housed more than a 100,000 people permanently across the state of California over the six rounds of HHAP funding. So it is incredible to see our local jurisdictions, partnering with our interagency council on homelessness, on technical assistance, on their regional collaboration, and making sure that the resources that they have available are serving the people most in need.

And so we are hopeful that, you know, our advocacy continues to make sure that we have funding to support our local efforts, but I am certain that Riverside County and other communities across the state will continue to work with the administration to make sure the dollars that they do have are serving the most folks that they can.

Great well, thank you for that response. More of a comment, but I, you know, I wanted to just, also mention, I think California's housing crisis demands a comprehensive approach that addresses the full spectrum of housing needs. As an example, CalHomes, a proven cost effective program that aligns with the state's broader goals of economic mobility and community resilience. Homeownership's foundational to building generational stability, strengthening communities, and reducing or eliminating altogether long term dependence on government assistance. The budget doesn't seem to invest there.

I just wanna state that I think we need to sustain our efforts on all fronts if we're gonna get anywhere with our housing crisis and would invite you to comment on that. I know I didn't really have a question.

Thank you.

No. I appreciate that. At at CalHFA, we do have several homeownership programs that we work to ensure first time homebuyers can can can buy homes and get into the, equity building space on the the homeownership front. We have the, our standard programs, which are funded for the next, you know, coming year and and and the short future, which is our my home program for down payment assistance.

We also have the Dream For All program, which I wanna thank the the legislature for continuing to fund that, will that helps, first time, first generation homebuyers get into, housing.

So our homeownership programs are still going strong. We don't, expect any funding for that right now in this year. So, but we will, as as if there's funding needed, we will come back and and bring that to the legislature.

Can I can you I'm sorry? Could you repeat the first program you said? Dream For All, but the one before that.

The My Home.

My Home. How is that different from Dream For All or CalHomes?

The My Home program is a down payment assistance program with a a smaller down payment assistance. It's generally 3-6%, down payment assistance. And instead of the Dream For All is a shared appreciation. So when the, home buyer sells or refinances the home, they have to pay back a portion of the appreciation. So it it's a revolving fund there.

But My Home is a simple interest rate as opposed to the a pre a shared appreciation model.

Thank you.

And I just wanted to reinforce, Assemblymember, our commitment to the full spectrum of housing needs. As we stand up the new agency, it really is our job to make sure that we are providing housing for our neighbors who are unhoused all the way to those who wanna buy their first home.

So it's imperative that we have programs and systems that allow those resources to be most effective and most efficient, but we also need to make sure that we are demonstrating to the public that we are good stewards of those resources. So that as resources ebb and flow as they do in the state of California, we are ready to deliver on bringing as many homes, to California as needed.

Couldn't agree more. Appreciate your comments. Thanks for the work you guys are doing.

Thank you.

Assembly member Ward.

Thank you, madam secretary and director good to see you here as well. Really appreciate this hearing as a part of this subcommittee, to really dive into one of our most pressing issues, likely our most pressing issues, certainly for this budget subcommittee. I'll start kinda high level. I'd I guess the the good news that fully support this real of the language.

So, you know, I wanna thank you for the work that you've done today to be able to successfully work through the reorg as outlined in the Hoover Commission, take some of those recommendations on how to have successful implementation.

Quick question there is that do you see any additional costs affiliated specifically with the reorg that we have to take into account?

No.

Okay. That that wasn't my read either, but I'm glad to hear that on the record. Since I have you here because I I know we'll have another day to be able to talk a little bit more about housing homelessness dollars, and, of course, we're gonna have items down the calendar as well.

Just some high level things that are deeply concerning for me. One is that all well and good that we are reorg and with the operational issues in mind to be able to provide more efficiencies, more effectiveness, cross collaboration, hopefully speed up the ability to get money out to community. But, you know, as we know, the governor's January draft is severely limiting in renewing a lot of our effective housing programs.

And I'm wondering, you know, this might be I don't mean this to be a loaded question, but how do we expect any improved operations to be able to operate better with less resources? And what can we do about making sure that some of the effective programs, you know, are, gonna make it across the finish line?

Well, great question. And, you know, I guess I would start by answering that as the agency secretary, it's my job to make sure that the resources that are provided to my departments in our agency are administered in the most efficient and effective manner possible. Whether that's a dollar or a billion dollars.

So for us, we are really focusing on making sure that our systems and programs and processes are tight. So that as resources come to us and and it's not like the tank is empty. There are millions of dollars still in the pipeline, and Gustavo can talk a bit more, and you'll hear more from my colleagues later, that still need to go out into community to fund projects that are that are needing our resources.

So I absolutely advocate to you all and to the administration that we need, funding for housing as it is the most important, foundational issue for Californians.

And we make and that is a negotiation between you all and the governor and team. Right. But it is our job to steward the resources that we do receive, in the best way possible. And so that is the charge that I give to my directors in our departments, and we are absolutely open to providing data and information about the why we need to continue to make the kinds of investments that Californians and you all are frankly asking of us.

Thank you. And so just hearing right off of that, that is the most important dataset that I need that I just haven't seen quite yet, for this year's purposes, and I do ask this every year. I think this is my fourth year running right now to just better understand on that sort of top lines for all of these different, you know, 15 or 20 or so programs that are under here from, HHAP to LITEC to multifamily housing program, affordable housing sustainable communities.

You know you know you know the, the pool, of programs that we've authorized and funded. Over the last couple of years, how many doors were open?

How many permits were issued? How many people were served? What was the, you know, per door cost out of that program that gives us sort of bang for buck understanding of all this program here, because I know we have limited resources, you twice the impact on a, you know, on solving individuals' homelessness from our own three year history data, right, versus, funding the same level for program b.

Like, that's where I need to sort of compare apples to apples, and I just don't quite have that yet. I hope we can recreate that.

We got better last year k. After asking the previous year for some information as well too. But that's something that I think is just exactly what we need to be able to see to help provide, you know, smart decision making as we kind of start to make our decisions in in December and and sorry, in in the month of May. And then I'd like to know as well too if we can, you know, tease that out at a later date.

You know, what do you see as needed improvements and how might the reorg help with the efficiencies within HCD or efficiencies within housing finance as well, right, so that we're taking, you know, an allocated or a budget appropriated amount here in in the current fiscal year.

And instead of taking the historical twenty four months to actually get that into a project locally, we're able to sort of shrink that down to eighteen months or even better. That's where I'm hoping we can do a better job of, being administrators of these funds, and I think that is your goal too. That that is really, appropriate information.

And the other two things that I wanted to highlight as we're thinking about this together going forward, is that we know programs that are effective, for example, one that I was happy to, coauthor a letter as well, within our budget subcommittee, that, you know, we'll be debating as well too has to do with the youth homelessness funding guarantee, and the fact that, you know, we are hoping for an ongoing $80,000,000 minimum funding within HHAP because we know that that has been working.

You have mentioned well too in in your remarks about how California can show from our own data.

We've seen a reduction in homelessness overall, but we've seen a 24% reduction in youth homelessness and a 42% in unsheltered youth homelessness between 2019 and 2024 over five years. So that that's remarkable. Right? These are cost effective and efficient programs that are doing what we want them to do, especially for this absolutely vulnerable population. And, you know, at the same time, we're seeing trends rise 11% in youth homelessness nationwide.

So I don't want to regress on our HHAP commitments and specifically for this subset. I wanna make sure that we're finding a pathway to, in negotiation to be able to enhance what's working. And so I just wanna specifically call that out as something in particular, of special attention to me.

And then the other one, you might not be on your radar yet, but I just wanted to raise today and maybe get a conversation going is having to do with the excess sites funds because we've done a lot over recent years to be able to talk about, well, we should be using state properties a little bit more creatively. We should be thinking about, you know, using that.

And I agree. And I think that there's absolutely a way that we can get the per door cost down if we're partners on that and we have the land. But we know we need to seed fund some of this and excess sites funds is really drained down.

And I agree. And I think that there's absolutely a way that we can get the per door cost down if we're partners on that and we have the land. But we know we need to seed fund some of this and excess sites funds is really drained down.

And so what is the solution there? I'll say, you know, candidly with a a little bit of tongue in cheek, you know, we get a good press release out of this about the plans to be able to do x number of housings on a site.

We never follow through with it with the budget commitment. And I have a site in Downtown San Diego, for example, that was declared surplus back in 2021. I had an office in that space. I got kicked out. That was 2021.

It is still the shuttered building down there because the stages hasn't figured out for the little bit of funds that are necessary there. We have a project developer. We have the master, operator for that entire site and everything. We didn't do our job on the front end. And I'm aware that the exercise fund is responsible for DMV site locations, other state properties.

You know, how do we, think critically about whether or not we may need to make this year the year to be able to, help seed fund some some of that and everything. So we follow through on these press releases and we actually get, construction, happening. So thank you for some special attention to those. Yeah. And I know a lot of this is gonna come in, future conversation and, and negotiations.

Assemblymember, I just wanna comment on a few things you first of all, data. Data in terms of

mic closer. Just pull it up to you. There you go.

Yes. Just wanna make a few comments to all of the items that you that you requested. Data, we can certainly provide you by funding source the effect, the impact that each of that funding each of the funding sources has had and where we are with spending, awarding, and spending. For example, in the the Homekey program, we still have over a billion dollars that we are yet to award. We've only awarded about $600,000,000.

HAPP is another good example where there's almost a billion dollars on unspent. We can, you know, provide you all of that information just so that you get a full picture about where we are with funding that is is current that has all of this Yeah. Absolutely.

In terms of the, HCD, efficiencies and and and more nimbleness, I think that is precisely what this proposal is about through the creation of the housing development and finance committee is, you know, in the past, if this, proposal were to, you know, materialize and and be implemented as we are already preparing July 1 to fully implement it, in the past, developers would obtain their early commitments and then go and seek out, other sources to complete that capital stack, federal funding, HCD, other state sources, and then eventually tax exempt bonds and tax credits.

Within the just the eight city organization, we would have up to seven, eight programs that they would need to apply or reapply multiple times, multiple sources.

This is really about avoiding those long gaps, avoiding that bureaucracy, that duplication, and cost, enormous cost that is added to developments. I mean, if you actually look at a proposed 70 unit project, you know, this proposal would cut in millions that just just by the time it shrinks to get to that full capital stacking and the ability to have a state system that is a lot more efficient. And so thank you for that because that's exactly what this proposal is about.

And in terms of the exercise program, we are you know, it's been so far a successful program. It has unlocked, nearly 5,000 units of affordable housing.

We've taken steps to make more sites available. Funding has been, yes, in large part an impediment, but also we have adjusted criteria for our programs to incentivize. That if developers are applying to a a funding for a project that is located in one of these state exercise, so they have priorities. So we can continue to be to think about what other ways to to prioritize that the exercise are moved from proposal of of the land to actually development.

So and when you say something has been unlocked, is that only in planning stages by units, a contract secured, or is that actually under construction or doors opened?

A combination can be awarded or it can actually be at construction or actually units that have been built. If you, for example, go not far far away, Lake Tahoe

Yeah.

You know, as well been one of the most successful exercise projects that we have that we have awarded. And there are many stages, some of which are built on, which are under construction, some of which are just awarded. So just a combination of all.

Okay. And then when we're if we're able to work together and be able to look at some of that data program by program and you mentioned and I agreed, some are gonna have a lot of fund balances, it probably is gonna be get the question, why do we have that big of a fund balance if we appropriated this two budgets ago, one budget ago? Like, you know, why hasn't that I mean, obviously, we did it for a good intent.

We wanna have x number of units of housing, like pumping out into California communities, but we don't. So that is helpful in the context of, okay.

Well, maybe we have more to work with here and say the multifamily housing program. Maybe we need to make a decision to not ask for 250,000,000 but something less than that. But it still is gonna beg the question, well, what why why hasn't this gotten out the door? Right? And and and that's something I'll be kinda curious to maybe dive into, like at a future time with you as soon.

We will put together this as quickly as as possible. Appreciate it.

Yeah. And we will follow-up with you specifically on the site in San Diego just so I can better understand from the team what's going on. Okay. Thank you.

You might wanna call DGS too. Of course.

And and just to say the the reference that Gustavo made to the $600,000,000 that we've expended. Those are bond funds through prop one. So there is a bit of a distinction between general fund allocations and fund balances and what we have in bond funds. So we'll make sure we delineate that in the data.

I'll absorb it all. Thank you.

Right. Thank you.

Just to go back to what our member from San Diego said so it does not get lost. He he, in fact, has a a budget letter request in that would focus on $80,000,000 investment with youth homelessness. And I know two or three budget cycles ago, we were really fighting to keep some of the homeless youth navigator funds, and we were able to do that. But this particular funding for youth, I'm gonna concur. I think it's really an important part of what we do.

So I wanna make sure that doesn't get lost, and then I will echo echo on the excess sites and surplus. But can and may maybe our next presenter will do this, but if somebody knows before we go to our next member is I know there's on the governor on the website about the surplus land and all the accountability measures. Where where do they go just generally for the public if they wanna see all of the things happening in housing? Is that

Specifically for surplus land?

Well, any of the housing.

We do have well, the the governor's office has stood up an accountability.ca.gov website. That's, I think, an

So accountability.ca.ca.

Okay. HCD also has a data portal with a number of dashboards and tables that can give you a sense about how we are progressing in our effort to reduce homelessness and improve housing production, including, I should say, a dashboard that, indicates the progress under the exercise program. And so, I think both, I would say those are the starting points, accountability.ca.gov as well as our HCD data portal.

And I would also lift up, chair, our, interagency council on homelessness also has dashboards for the public to see how our HAPP funding is being spent. HCD also has that. So I know it's a few websites, but there are some really wonderful visualizations of the data and how those resources are being spent on both of those websites.

And if you can make sure we all get that that are up here, I will say that I went through a little exercise with, Meaghan from your department, Meaghan Kirby, that showed me everything. I was really impressed by it. Alright. With that, Assemblymember Tangipa.

Thank you, Madam Chair. And thank you, to all of the members that are here. I can only imagine how your jobs are, especially when we go out and we talk to the general public, and homelessness is really top of mind. So I have some data questions before jumping into quite a bit here. Just that way we're all on the understanding, and I'm making sure that I'm looking at the right areas.

So now that we are in this reorganization, is it accurate to say that the homelessness population in 2018 was a 129,000 people according to HUD?

In 2019?

In 2018.

2018. Yeah. I haven't looked at that exact data, but I'm sure if HUD is reporting that, then that is an accurate count.

Okay. So and that's what I have from HUD 2018 when governor Newsom first took office. The homelessness count was a 129,000. I have the HUD information from 2024, the last time a full point in time count was conducted. Homelessness has gone to a 187,000.

Would that be an accurate assessment? That's according to HUD. More than likely.

It it's possible. The last number I saw assembly there was a 178,000. I I can't recall what year it was, but if you're seeing that from, like, the secretary said from the HUD website, it's possible.

Yeah. In 2024, the last full point in time count was when they counted both sheltered and unsheltered. That's what HUD is providing, and that was about a 187,000. And the main reason why I bring that up is because that is a 45% increase in homelessness over the last eight years after we have spent $24 billion. And it it's about where we're at in reality.

This is a reorganization that is happening. And for me, the question that I'm asking under this reorganization, what have the agencies put in place that are a specific numeric or at least measurable goal for reducing homelessness as we take this next step into the future?

That's a great question. And, you know, we are not in disagreement that any of our fellow Californians who are experiencing homelessness in the state of California are too many. So I just wanna start by saying the numbers that you've articulated, I have I take home every day, and I think about every single day that I come to work. So I just wanna start there.

I also wanna highlight what's exciting about what we've been doing in partnership with our our local jurisdictions is we have, for the first time, a three year homelessness action plan that has metrics about how jurisdictions are actually organizing their local efforts, their local resources paired with state resources to actually reduce homelessness in the state of California.

You heard Gustavo talk a little bit about the reduction over this last, point in time count that we've seen. Other nationwide, there was an 18% increase.

California saw a 3% increase, still an increase, but significantly less than what we what we've seen in the past in part because of all of the actions and resources that we have put towards solutions that actually work, that are informed by our housing first approach, and are are informed by evidence based practices that now allow us to have this three year statewide homelessness action plan. We get data every quarter from every COC in California, so all 44 COCs.

Our, interagency council on homelessness has done an extraordinary job in improving data quality.

We have a lot of jurisdictions across the state who are not their data capacity is quite limited. And if you put good data bad data in, you get bad data out. We've worked really hard to improve the data quality over the last many years so that our COCs are reporting accurate data of what's happening in our communities.

And then they're we're providing technical assistance through HCD who administers the HAPP programs to really fortify the outcomes that we're looking for, the accountability metrics that the governor has put in toward our our HAPP funding. All of those have increased over each year of HAPP funding, from round one to round six.

So now that we have those five metrics, we are able to kind of track our progress over a three year time horizon and hopefully iterate in real time if we're not seeing the outcomes that we want. But I think it gives everyone, a way in which to hold ourselves accountable for being good stewards of those resources, but more than anything, housing as many people as we can as quickly as we can.

So I hear that and actually it makes me excited that there are goals, but is there a flat within these three years, we want to see a 10% reduction in homelessness. Is there a flat numerical number that we can say, did we reach our goals or did we not?

There are and I can have my colleague, Meghan Marshall, who's our executive officer for interagency council on homelessness chair, if that's appropriate. I would love for her to speak to the specific metrics that we have as a part of our action plan that could give you that insight.

And and that's what I do commend, like, my colleagues and some of the others. And I've seen both I I worked for the Fresno County Board of Supervisors. I have seen where progress has been made. I have seen what Homekey funding can do. When we say affordable housing, it's not just using the word affordable housing and we're building at a $1,100,000 a door.

Right. The, Smugglers Inn project. I don't know if any of you are familiar it won an award. My former

Congratulations. Yes.

One of my former RH Community Home Builders, an amazing community pop, partner, was able to transform almost 200 units at a $100,000 a door of an old motel that was used for not good things. And then put people in a corridor that was one, walkable for workspaces.

Two, Fresno County was able to partner to get direct services there so we can have a one stop shop to help people go from transitionary housing where they were just down on their luck, get a place nine to eight nine to ten months later, and then get into permanent housing. I know exactly what it can do. And that's why, specifically, when I bring up these numbers, when it's statewide

Yeah.

We know what good places and good local municipalities can do with the dollars. And we've also seen that there are other areas. When you have a 45% increase in homelessness over the last eight years, it's about setting those hard metrics and those hard goals and saying, this is our goal. In three years, we we will reduce homelessness by 10%, and that's what I would like to hear.

Good afternoon, Chair, Members of, the the subcommittee. My name is Meaghan Marshall. I'm the executive officer for the California Interagency Council on Homelessness. This is an awkward setup, so but considering you you asked the question, I will I will face this way. As secretary mentioned, we do have a three year action plan.

This is the first time in Cal ICH's existence that that plan has included metrics for us to measure ourselves against. We asked quite a bit of our of our continuums of care, our cities, and our counties, and this is our first opportunity to to hold ourselves accountable as well. And so there are five goals, and in that, there are there are numerics attached to it. And of course, I've just locked myself out of my phone.

But while I am pulling that up, I will say we also present the progress on those as secretary mentioned in our quarterly council meeting, the next of which will be in June.

We always offer for for staff of the legislature to attend those briefings just to be kept informed, are publicly available as well. So, I will just give you the sort of the ones that I think that are relevant to your question. Our first goal is to help more people leave unsheltered homelessness.

And at the start of this action plan, which began in in the 2025, that number was forty two excuse me, 42% of people were exiting from unsheltered homelessness to some form of shelter, or or house. And our goal is that that increases to seventy percent by the the end of the action plan.

I will say at our last quarterly council meeting, which was in March, there was a dip. So the baseline percentage was 42, and that baseline excuse me. That the last count was 39%.

And and you you said the word exiting. Would it be entering entering into sheltered?

Entering into shelter, exiting unsheltered homelessness. Okay. So leaving

Is that how we measure that we would say exit unsheltered?

Exit that's that's the way that HUD describes the experience.

But good for my understanding. Sure.

So I can learn the terms. Sure.

Yeah. And we're happy to provide the the the entire committee, but certainly any members that are interested a full briefing on the action plan and some of the nuances and terminology, perhaps at a later date when I'm a little bit more prepared to not reading from my very small cell phone. But the second goal is to help more people leave, more people move into permanent housing at our baseline.

At the beginning of 2025, that was 18%, which is on par, I will say, for the the national statistics that we see, and to increase that to at least 60. And so those are, of of the five goals, I will say that those are the two that I think are most relevant to your question.

But those are all things that we report on in our quarterly council meeting.

And I will say, like, I am grateful to hear specific numerical metrics because I think that's what people want to hear. And and it's, again, personal to me. You know, ten years ago, I was homeless. I was bouncing around sleeping on my teammates couches, just trying to make it in the world. And it's the the about what I think a lot of people are asking here in the state of California, is that we cannot measure our metro metric of success on spending.

We must measure it on outcomes because we spend a lot, but the outcomes are not there. And it was the part that really, I think, shocked my conscious when I was reading the report by the New York, Statecom Comptroller's office. They spend on their unsheltered $81,000 per unsheltered individual Yeah. Exceeding the average New York resident income.

And in the state of California, if we shift and we look at those numbers for here, we spend right around, these are rough estimates on our part, about 42 to $45,000 per individual.

Yep. The average income for a single individual in the state of California is $50,000, just about. So we're $5,000 off spending the average income of the average Californian. And that's where, again, for me, my mother lives off of veteran dependency benefits. I grew up in Section eight low income housing.

I know exactly what the self social safety net can do for people because I am sitting in this chair, because I was caught by it. But when my mother is living off of $24,000 a year, and I take care of everything else, and my siblings and my brothers are the other ones that also participate in this, it's a shocking number. You know, it's a shocking number to look at our outcomes, not correlate with how much we're spending.

And this reorganization gives us the ability to say, let's put on some metric goals. Let's get to them.

And then that's where we can report back to people that we are not just spending money, we are being successful. That shifts me a little bit to a different area. And the main reason why is because we know fraud is a very, very big thing that's happening.

Whether it's Hospice Care Fraud, other fraud, and some of the fraud that we've seen both in Homekey funding. Is there an individual that is best that I direct questions when it comes to some of the shing shingrela, issues? And the main reason why I asked is because under this reorganization, I wanna ask the questions on what are we doing to make sure that we're preventing fraud because that, for anybody who has read that case

Yeah.

Is disturbing.

So Assemblymember, the just specifically with respect to Shangri La, the the investigation, including criminal investigation, is still underway. So we would not be able to comment at all on specifically that issue.

But So you can't tell me about the $160,000,000 in bank statements that were fraud?

Well, you can read it from the reports. What I'm saying is, like, we are we've been fully cooperating with the authorities on this. What I can tell you is that when you look at the full spectrum of the Homekey program, we have refined our compliance monitoring. We have strengthened our accountability measures so that that doesn't reoccur, that local jurisdictions are held accountable.

The accountability starts with us, but also it's a shared responsibility with the local jurisdictions to partner With their, you know, with their service providers and the development partners to make sure that every dollar spent on the Homekey has the results similar to the example you were given.

It's a hotel that has been remodeled where the cost per unit is significantly lower than building a brand new affordable housing unit and and that we are serving, you know we're meeting the goal of serving over the lifetime of the program a 170,000 Californians. That is our goal, and we are ensuring that situations like Shangri La do never never occur again and and and our accountability is strong. Our compliance is strong.

And that's where I feel you know, again, I have tangibly seen what Homekey Funding can do. And then there are reports that, again, the bad actors make it look horrible. I mean, disgusting for for a lot of people, and that's that's exactly what we wanna make sure.

Mister Tangipa, we're gonna start to move to it.

Yeah. I think Thank you.

My last my last one was just what pieces have been put in place specifically during this reorganization to make sure that that doesn't happen again. Is there anything specific that we have?

Well, maybe I'll just share sort of our overall approach to strengthening all of our business processes across all of our departments to ensure that when, nefarious activity happens with our partners or within our agencies or departments, we are made aware of that as quickly as possible. Part of this is to make sure and I think it is aligned with our sort of approach and values to the reorganization.

We wanna have systems that give us the tools to respond to what's working well and what may not be working well. And so we have regular meetings with our department directors, with our executive staff across all of agency to talk about our fraud protections to make sure this is a priority for the governor as well. So we are meeting regularly to make sure that if , situations like Shangri La arise, we know about them, and we have the appropriate practices in place to respond, swiftly.

And so we can't control what happens outside of of our purview and, what happens, but we are responsible for when we find out what's going on, we act swiftly and and we are held accountable for the for that behavior. And so that is what the governor has instructed all of us to do, and I get those updates from my teams regularly. Yep.

And I would ask the chair if we can consider potentially in the future maybe looking at may when the investigation is done, maybe having a subcommittee on that. So that way we can if there are more areas to identify, we as a legislature know where to prioritize. We can double down on the areas that are doing better and also maybe bring those processes, to the other areas and have those checks and balances in place. And I think that's what we're all looking to do.

So I really, one, appreciate all the information.

Thank you all for being here, and I pray for you all every night.

Thank you. So thank you. Appreciate it.

Alright. Thank you. With that, do we have any other comments from members here on this item number one? Alright. So we are gonna go to the public.

To the public, we are making comments only on item number one, the governor's reorganization plan trailer bill.

Here we go. Good afternoon, TRIN members. Carlin Shelby here on behalf of the City of Oakland. Oakland is really supportive of the governor's housing reorganization plan as a critical step to streamline our fragmented housing finance system and accelerate affordable housing production. The proposed 90% tax exempt bond set aside will help maximize federal tax address the state's housing shortage at scale.

We strongly support directing at least half of these resources to the new housing development and finance committee to create a true one stop shop and ensuring it has meaningful authority over key funding programs. With that alignment, we can cut project timelines, reduce costs, and deliver more transit oriented climate aligned housing faster across California. Thank you so much.

Thank you.

Good afternoon, Madam Chair and Member. Raymond Contreras with Lighthouse Public Affairs on behalf of SPUR.

Pull up the mic. There you go.

SPUR is a strong support of the governor's housing budget proposal, which takes a critical step towards fixing how California's financing affordable housing. Right now, projects have to piece together multiple funding sources often competing more competing more than once, which adds time, cost, and uncertainty. This proposal creates a true one stop shop through the housing development and the financing committee, allowing projects to secure full financing in a single coordinated process and move construction fact faster.

Each additional funding source can add months of delay and cost tens of thousands of dollars per unit. By streamlining the system, the the state can save over $40,000 per unit.

This proposal will make every housing dollar go further, reducing delays and getting more housing built faster for California to do the most. Thank you very much.

Alright. So we're gonna make sure we're speaking about, the trailer bill language, not the financing part. That is item number two.

Madam Chair, Larry Florence, CEO of Burbank Housing. I'll say my comments on the bond side of two when we get to that. But I wanted to say that Burbank I'm the CEO or president of Burbank Housing. We're the largest developer of affordable housing in the North Bay. We strongly endorse the governor's proposal for the reorganization.

Couldn't happen soon enough, and I hope we can just get going starting July 1 on it.

Thank you.

Good afternoon. JT Herchbeck, the Nonprofit Housing Association of Northern California in strong support of this.

Thank you. Alright. We do have one more question for the good secretary here, Assemblymember.

Thank you so much, Chair. Hi, secretary Maas. Thank you so much for your presentation. I don't have, any questions. I know my colleagues had an opportunity to ask you, some questions, But, really just wanted to, reaffirm and, appreciate the administration, and your leadership on this issue.

I think when we look at this reorg proposal, I'm sure there's probably questions of like, why now, why this, you know, we're in a budget deficit. There's a lot of questions that come to mind. But I think what I see here is really an opportunity to prioritize housing and homelessness at that level it should be.

And it's really making sure that as we are in the middle of a transition from this current administration to the next, that we are setting up cabinet level agencies that prioritize homelessness and housing. And I think that is the legacy that this administration is trying to to leave behind, and I wanna appreciate that.

I also wanna reiterate some of the comments that I know I shared previously when you were here before this, budget subcommittee really around, the change of what, funding on homelessness and and housing look like pre Newsom administration and post Newsom administration, pre this governor, some of the investment, there was some, but it was in the millions. And I think under this administration, it's now in the billions.

And I think this is such a tough issue because it is a crisis of epic proportions representing Los Angeles. I know that. I see that.

I feel that in my district. And so I think it's you have a really tough job when you're presenting to our committee and any committee because it's an issue where there's no answer that you can give that will satisfy because we have not solved the problem. That's right. And it's decades in the making and it's gonna take forward forward thinking plans and visions like the one we have here to make a a real impact to prioritize it.

And so I just wanted to just, like, add that in if that wasn't already said that I think this is a a really much needed reorg so that as we wrap up this administration, we go to the next one that housing and homelessness will be a priority for whoever takes over, and I look forward to that work and appreciate you and your leadership.

Thank you.

And thank you to the Chair because, our Chair is also a leader, on fighting for those dollars. Thank you, Chair Quirk-Silva.

Alright.

Yeah. And my cup here, my coffee cup said, such a great job being the chair of it actually says, enjoy. Before we go to item number two, I do wanna thank you because I know working in this space is extremely difficult space. Our goals are the same to house more people in a streamlined fashion, and yet we know that whether it's construction or development can be very elusive and costly, and that is where the frustration lies.

I will restate as the Chair of this committee, and I think with some of my colleagues' support, we certainly appreciate in the governor's budget in January the HAPP funding for 500,000,000.

We also know that there are may maybe advocates here today or that we are visiting our offices hoping for double that investment, particularly the big cities or large cities, I should say. But I and I believe some of the members on this committee are very we wanna do as much as we can with the dollars we have. So HAPP is certainly a priority, but also the low income tax credits, multifamily, and even going further down the list with, perhaps CalHome or REIT funding.

We know we cannot do everything, but we don't wanna put all our eggs in one basket knowing that we want to spread it out as equitably as possible. So with that, we will close item one and begin item two, which is the California housing and homelessness.

Thank you again for your work. Development proposal trailer bill, And for the public, many of us have other committees that, we are, either testifying on or running to, so you will either see Assemblymember Caloza or Assemblymember Ward, handling this as we all go in and out.

And we are gonna try to move through this pretty streamlined, because we wanna, make sure we can get to everybody's testimony. With that, please introduce yourself. Welcome.

Good afternoon, Chair and Members. My name is Christina Mun. I am the Deputy Secretary of Housing Finance at the Business Consumer Services and Housing Agency, and I'm joined here by my colleague.

And, I'm Meghan Kirkeby. I'm the chief deputy director now for HCD. So nice to meet, nice to be in front of you today.

Congratulations.

Thank you very much. Title.

We're we're lucky to have her. So really appreciate being able to speak to you about our proposal today. I'm just gonna flash this here and just say, we're building the structure as the secretary and directors talked about upon that structure that we've created with the housing development and finance committee.

And we're doing it now to really take advantage of some meaningful and really important changes within the Federal Government's tax credit requirements to create the streamlined and effective state housing finance system that we've all been working towards. Why now?

In the last year, the Federal Government changed 4% tax credit requirements. So now private activity bonds are only required to make up 25% of a project's total financing to be eligible for the 4% tax credit. You may have heard about this as the 25% test as compared to the 50% test that it used to be.

This provides California with a really big opportunity to combine our organizational changes from the reorg that we've been doing with the increased bond capacity from these federal changes to create a better system. Before I go into too much detail on our proposal, I wanna take a minute to just provide a little context of why we're here and what we're doing.

So I think you all know developing housing, it's really complicated. It requires pulling together a lot of different sources, a lot of balancing, a lot of different processes, deadlines, requirements, and in a time when costs keep rising is it too quiet? When is it a time when costs keep rising? Every extra minute that we spend waiting, leads to higher costs for every project. So as the secretary said, that that could be up to 20,000 per unit for each source and adding up to four months.

It can be difficult for developers to put together their capital stack, which is all their sources that they need to get to construction. So to create affordable housing, they're often coming to government for funding to get to that deeper affordability. The support can be direct subsidies coming through places like HCD, like the Super NOFA or HSC, or and it can also likely include things like private activity bonds, as well as low income housing tax credits.

So that is typically what comprises our capital stack, and it is really hard to get through it. So we have this whole gauntlet that we're making under the current state.

This is what we're solving for. Right? We have the state is requiring developers to have multiple successive processes to get to each source of money. So each layer of money that they're trying to get, they're taking a stop along this path to secure each subsidy source. So they may go to first it's not even on here, but they could go to their local jurisdiction and ask for some soft subsidy there.

Then they can come to the state and ask HCD for super NOFA funding. They might also go to, SGC via HCD to get ASIC dollars. So, and then once they get all of that, they can then seek tax credits and bonds when they're ready. Right? So each of these steps has potentially different deadline, different rules, like appeal periods.

Right? You might get stuck in each step. And just to make this a real example, you could see, you know, we have 89 projects from HCD's pipeline that have received funding, but they still need that last bond or tax credit award. 44 of those have already tried at least one time before, so that's just to show you that it's just there's some limitations in the system that we already have.

So again, every delay to get to full funding means our money invested from HCV would have to wait to be used, and that decreases its overall impact and value.

So that's what we're solving for and as the Secretary and directors mentioned, you know, we've been doing a lot of work under the reorg to really set ourselves up for success to streamline the system. Creating HDFC will be a place where all these subsidies can be consolidated into a one stop shop. However, even with that reorg, there's still more to do. There's still fragmentation because ASIC and bonds and credits are still with outside of that system.

So that means under the current system, if there is no change, we would have consolidated that first step of subsidy from the state, but then there would still have to be a competition, to secure bonds and credits and or ASIC.

So, you know, prior to the 50% test change down to 25%, there was some fierce competition for bonds, leaving a lot of our subsidy projects kind of stranded in between these steps. We're still kind of catching up to that pipeline, and I think an example that is, like, kind of a sensitive subject is, you know, what we had to do to solve out of that was the accelerator program.

You know, we put in a ton of subsidy to really address some of these gaps, and and kind of hiccups in the system. So we put in $3.7 billion of this type of accelerator, you know, funding to really unlock the pipeline and take pressure off the tax credit and bond system. You know, this allowed us to help a 111 stranded projects or over 7,800 units with this type of money.

A lot of these projects had previously applied for tax credits and bonds and we're stuck, and you know this was in some ways a success story because we moved the pipeline, but in other ways really inefficient way to use subsidy. Right? And not I think structurally this is what we're trying to solve for, to never have to do that again and to really leverage our resources across the state. So where we are with the proposal is we want to align everything through HDFC.

We want to create that single access point so that when you come and ask for subsidy, you pair it with bonds and credits, you know at once if you're getting your full financing.

So this is the direction we've been hearing from you all at the legislature. We've been hearing it from a lot of our colleagues that are partners doing the actual developments out in the field and again with the recent federal changes, big opportunity to take that extra capacity and harness it to, have better coordination with our subsidy. More specifically, the proposal is to take the overall volume cap of bonds at the state, and set a floor of 90% to be used for affordable housing.

So of that total cap, which is about, I believe, 5.3 billion in the current year, 90% of that would be preserved for affordable housing. So that would give that stability for the pipeline to know there is bonds for housing.

We've been collaborating a lot through AB 519 work groups and other spaces with the treasurer's office across our, you know, different departments on how this could best work, and and through that partnership, we've really landed on this sort of two door path. Right? So if you need subsidy out of that 90%, half would go through HDFC, so the 50% would go to HDFC, and then the other half would stay with the treasurer's office.

So the real distinction between those two doors is do you need subsidy or do you not need subsidy? If you need subsidy, come to HDFC and we'll tell you, yes, you can get it, and if you need bonds, we can let you know that you'll get the bonds as well at the same time.

For those HDFC projects, we are not trying to take on the expertise of the treasurer's office. We're really taking an allocation, working with them on threshold eligibility, and then they will continue to ministerially process those awards and provide their technical expertise and administrative compliance. So it really is HDFC just making the allocation decisions with its subsidy.

If we do not use the full 50%, the unused bond authority would revert back to CDLAC, so it'd go back into the pot to be issued either in the last round of the year or through carry forward.

Bonds, you have three more years after the first year to spend your tax exempt bonds, so there that's a very kind of normal process that's already expertly handled by CDLAC, and we would really put that back into the pot for them CDLAC, and we would really put that back into the pot for them to track and spend.

And I'll just say, you know, I think HDFC, as I mentioned, just a lot of pent up demand. We when we looked at our pipeline and we looked at the funding that we do have, we believe in the first year that we would easily spend that 50% of bond allocation reservation in the first year. When we look at pipeline, it looks like it's about 2.16 or 2.44 billion of bond cap demand in the first year, which is about 45 to 51%.

So it's sized well to what we're proposing here. And again, if it's not fully used, it would be returned in the same year.

So, you know, we believe this proposed structure creates a flexible streamlined system. It really leans into the existing expertise of our colleagues at the treasurer's office, but aligns all of our awards and subsidy use so that we can really leverage that and move projects to complete financing sooner. Thank you, and I look forward to the conversation.

Wow. I'm exhausted. And I'm looking at some faces out there. There's a lot of faces out there Yeah. With different expressions.

Okay. That being said, you guys are not poker faces out there. Let's go ahead and start with the Department of Finance.

Blair Huxman, Department of Finance. I have nothing to add.

And our LAO?

Again, Paul's again, Paul Steenhausen with the analyst's office. You know, the presentation, reminds me actually of a conversation I had recently with a neighbor talking about long standing silos and affordable housing programs. And the neighbor who doesn't know about this topic asked, well, how could their how could they be so uncoordinated if these are programs all run by the state? And it was a it was a good question.

And the response is, this is long standing. These this fragmentation, historical, going back decades. We do find merit in addressing this. And we there's a lot of promising, you know, concepts and ideas, and proposals, in this issue number two.

We do see this proposal as building on the spirit of the governor's reorganization plan, going that next step and looking at programs under the governor's purview and programs under the state treasurer's purview, you know, coordinating and and trying to bridge those two, which hasn't been done in more than four decades.

So first is laid out in our report from last month, and it's also noted in your agenda. We see merit in the proposal, just set aside in statute, this 90% of bonds, private activity bonds for affordable housing. It's consistent with legislative priorities, to really focus on affordable housing. It also allows the state to unlock a lot of federal tax credits, a lot of federal funds. So we recommend the legislature approve that.

We see merit also with the proposal here, the concept of automatically awarding these bonds and therefore the 4% tax credits to projects that receive this HDFC funded money, the, housing development finance committee funding, projects. And it would it would has a lot of, pros, but one of them is it's something similar has been done already, and that's with CalHFA's mixed income program. Director Sertich was was on earlier.

So, we do have some concern with the proposals to set in statute a minimum of 50% in private activity bonds, that had have to be set aside each year for HDFC approved projects. And then also only allow these unallocated funds or unused funds to be allocated to this general pool at the end of the year, you know, November.

In some years, it could re result in funds kind of sitting there for most of the year and sitting there unnecessarily when they could be used to be, for other projects that might not receive one of these HDFC awards. In addition, we see it as a good start, but the governor's budget, in our mind is is incomplete in a way. It it only addresses the 4% federal tax credits. It's silent on the 9% federal tax credits, as well as those state tax credits.

And as your agenda notes, the federal 9% tax credits generally provide more than double the equity of those 4% tax credits.

And so those tax credits along with the state state tax credits really can be a powerful tool in for the state in funding, deeply affordable, projects. So those projects that are addressing the lowest income residents of the state. So we recommend the legislature, approve the concept of the set aside, but remove that 50% floor. Instead, let let HDFC and

the treasurer's office decide on the amount to set aside each year because it really can vary from year to year depending on resources and anticipated need. Another viable option though, you know, and so instead could be to keep that 50% set aside but put in statute an allowance so that HDFC could and and could reallocate those funds earlier in the year, not have to wait until November, the end of the year to do that.

We also recommend the legislature direct HDFC and the, tax credit allocation committee to prioritize awarding those federal 9% tax credits and those state tax credits to projects that are seeking to house the lowest income residents. And finally, we recommend the legislature require HDFC to report annually on its allocation, how much it's set aside, as well as to report periodically on the outcomes. You heard secretary Moss talk about doing these projects faster and cheaper.

And so legislature will wanna know through reporting, through its oversight, what's actually happened. Has has this streamlined approach resulted in projects getting completed faster and assembling their funding in a quicker way. Thank you.

Thank you. Members, questions or comments? Go ahead. Go ahead.

No.

Chair. I'll start since we're, I think, still synthesizing all the information that you shared. I thought permitting normal housing was hard in California. Apparently, trying to get affordable housing built using some of these credits and bond is is even so much more complicated with the alphabet soup of all the different agencies that you've mentioned that I think we're constantly uncovering new regulatory hate to say the b word, bureaucratic processes before us.

I think one of the questions that I had is is why do you think some of the affordable housing projects have not fared well under the the current process? Like, how long are they stuck in in this timeline waiting to to compete?

Yeah. I can start and welcome my colleague joining in on areas I didn't quite cover. You know, just some history. Typically, in the past, like, this bond scarcity is a newer thing. You know, Ten years ago, you could go and get an over the counter bond and credit award.

Right? Like, it was a it was more accessible. With the influx of a significant amount of subsidy, there was a a bigger pipeline that that drove the demand for bonds, and you saw this across states, like, I've worked in New York. New York also has this. Right?

Like, they've had to figure out how to manage bond scarcity over time, and so that's what California faced around the same time Washington faces too. Right? So so we're in this place where now there was bond scarcity, was still under the 50% test, there was a billions of dollars in subsidy going into the pipeline, encouraging that growth in the pipeline, and then they were scoring priorities. Right? Each program has a different set of outcomes that they're trying to see.

It may still be affordable housing, capital a h, but they have their own kind of bespoke metrics and priorities that they were seeking. And so being successful in an earlier stop doesn't always mean you're gonna get your bonds and credits. So there was a with that scarcity at the end of that chain, they may not have been they may not have been as competitive in the tie breaker that the the bond system had in place, and that was evolving.

So we were we were trying to work, you know, across our agencies to really figure out how to unlock that pipeline, but in the meantime, that's what was happening. And so there's a real structural issue with not just every step of our subsidy, but also getting to that final step.

There's just a mismatch in scoring priority.

Yeah. And I think just to add on to that is if you can think about a world where you're trying to get enough subsidy to get your project to the finish line, and that is not a fixed request in time. And so you might start applying before you're really ready to go. You might say, okay. I'm gonna apply because there's funding available now, but you might not actually be ready to go.

And part of what we're changing structurally also creates a much more level playing field because we're looking at all the resources at one time as well as all the projects at one time. And when you leave with that award, you now have to move straight into your readiness.

What was happening before was not just are they competitive or not, but it it was, leaving gaps in accountability because projects and I mean, and I think no fault of their own, they had to apply when resources were available. But then they could, you know, go cobble along and, like, try and get a few more sources and, like, go through a few more doors. And so sometimes when they were getting, you know, quote unquote stuck, it was because additional their funding request had changed over time.

Their project had changed over time. It's just very hard to to pin down, like and that's to your point about the private market, it'd be the same thing there. Over a five year period, a project is just gonna change and not be the same thing it was the first time it asked for an HCD award. If then now it's been five years, along the way.

And so a lot of those projects that we're going to ask for bonds and tax credits, all of a sudden, we're now not able to ask for just a straight over the counter 4% credit and bond and move forward.

They needed state tax credits to make that project work, or they needed to turn their project into a 9% tax credit, which is much, much more competitive space as well. And so all of those things meant that there was a lot, you know, there's a lot of ability to sort of point fingers and and it is an unfair and unlevel playing field that way.

But but putting all of the resources into one competition and making the decision altogether, that's actually better for the state treasurer's office as well as for the administration in ensuring that the projects that we're funding, are then ready to go, have readiness deadlines they meet. Or if they don't, then they're returning that money and we get it back into the pipeline sooner. And so just I think that's some of the other piece of the story that that's helpful to understand as well.

And, Chair, if I may, Megan Tokonaga Block department of finance. The team, in advance of this hearing prepared some data and shared with your staff, and I thought I might share a few data points to this question about the landline that has been added as a result of the current fragmented system. And so

Is your is your mic on?

Apologies.

There you go.

So we looked at all of the projects that the state has had to help fully finance without tax credits and bonds to alleviate pressure on the tax credit system. This is largely through the accelerator program that we've touched on earlier.

And we wanted to note that of these projects, we found that many of them had already applied to tax credits and fine and bond financing, a range of one to six times for a single project, and this added delays of up to 19 months for a given project. We are also looking at the projects that have received HCD financing that are still in the pipeline.

And, we've seen that of the projects that have already applied, they've applied up to eight times to the, bond and tax credit system, and that this represents a total of 96 applications submitted because of the dual process that we have in place.

I was just gonna finish up. Thank you, Chair. Thank you for sharing that data. That was really helpful, the nineteen months additional delay. If you can share that data, that would be great.

Thank you. Appreciate that. Any other questions? Yeah.

And I think the more that I'm learning about this, the more I'm understanding, I think, the larger vision here of the agency to create the one stop shop model that I'm hearing to really incentivize building more affordable housing and to improve government efficiency.

That's right.

And so I think what this means at the local level is kind of my last question is, can you just explain what happened to some of the the locally funded projects? Like, what does this mean for our housing providers, folks on the ground who are looking to make their project pencil out, are looking at bonds and tax credits at the state level? What does this mean for them as they look at this?

Yeah. I'll start, but I think Christine is a former local, so she should add some color. But I think it's, like, the most exciting thing about the proposal is how this also allows us to better partner with our local partners.

As you can imagine, if you're trying to put out seven different sets of guidelines a year, and and some years that was more because there were more programs, then that's so much for the locals to keep track of and try and figure out, okay, well, how do I put my money into something that's gonna be successful in these competitions?

What we're really talking about here is one set of guidelines that governs, all of the multifamily funding sources, and that can then be, we're in a situation where we are we have heard loud and clear just dropping guidelines on people is not working for them.

What we're committed to here is for the first round, at least two rounds of public comment, on these guidelines. And then in an ongoing way, this allows us to mirror what our, partners in the treasurer's office have been doing, which is basically when we make changes, they go out in summer, we do engagement in fall, we adopt in the winter, and then those, guidelines govern the whole year. And as the program stabilizes, it could we could go more than one year without making any modifications.

And that enables much more predictability for our local partners to figure out how the the resources that they have will fit into the puzzle. And and we think that's that's probably one of the biggest advantages is for our local partners.

I would add that this is gonna be really important for locals to plan their pipeline, having that visibility into how funding will work at the state. What we did with the structure of the two doors, subsidy or not, is meant to keep both doors open for local jurisdictions. So it recognizes some jurisdictions don't need extra subsidy. They may have their own local bond measure. LA has a lot of local money that they're gonna invest in their pipeline.

Super exciting. They should just go through the treasurer's door and get their projects, tax credits, and bonds. If they knew do need subsidy, you know, City of Oakland, lots of local subsidies still might need a little extra. They can come to HDFC and ask for that extra with their tax credits and bonds. Growth.

So we're trying to give that legibility to the system so that they can access both doors to what makes sense, and it really is just do you need extra subsidy or not.

Thank you both. I appreciate that testimony.

Assemblymember Ward. Thank you. I thought it's a little like Price is Right. We kinda got two doors. What's behind each door?

I like it.

I'm actually, I'm just joking here. We gotta lighten up a little bit here. This is a heavy conversation, and I think it's a much needed conversation. I'm exhausted by the graphing because I wouldn't make it even through to the doorstep, let alone through a door Yeah. On this process.

So we certainly our goal is to streamline, to get people what they need. I do wanna ask really quickly on the federal 9%. I think if I've heard it right now in multiple different hearings, it's a little bit of a glimmer. And since we've had almost zero glimmers from the Federal Government, can you kind of expand on that?

I think are you asking there's additional capacity on the 9%?

Yes. Can you just explain that? Because I don't think Yes.

And I forget the exact maybe we can ask someone else to say the exact percentage, but

Oh, I the tax credit.

But, so, I'll answer what I think the question is, but then you might have a a question I need to phone a friend on. But the, the way we're designing this is is absolutely so that a project could apply and be have access to all resources in one step. But what we are asking for through the budget proposal is specifically to have an allocation at HDFC around the the bond piece.

So we're not cutting off any, potential partnerships, but we're just trying to make sure that, we set ourselves up for success to really go through that over the counter door.

But we're not trying to, we're not, we're, we're still trying to talk about how the whole system can, can work together. So it's, it's really mostly just clarifying that, like, that's where that's the, that's the piece that gives us the certainty. And so I'd say like, you know, with respect to our LAO colleague, you know, we see this as as giving us up to 50% of that allocation on the 4% side.

So we have a a sort of predictable pathway there, but not cutting off than the 9% avenue either.

Thank you. Now I was actually referring, I think it was Marina. And you wanna just explain what you said in a different committee that I kind of was alerted to, and I actually had a pleasant response. Yes. Which is rare these days related to the Federal Government, but.

Yes. Good afternoon. Marina Wiant, I'm the Executive Director for the Tax Credit Allocation Committee and the Debt Limit Allocation Committee housed in the Treasurer's Office. So you're referring to what was included in HR 1 from July, which augments the 9% tax credit allocation by 12% every year from here on out. And that was in addition to that 20 the reduction of the 50% test to the 25% test. Yeah I'll stop now.

Which could potentially on on lock I thought you said, and again, forgive me, but, like, 9,000 units or

Yes.

Am I way off?

way off? Actually, much more than that. Okay. So both the 12% increase on the 9% combined with the reduction of the 50% test to 25 could mean additional 20,000 units a year in California. To give a little bit of context to that, we in 2024, we allocated resources for a total of a little over 18,000 units.

In 2025, we took swift action at CDLAC and a TCAC to adopt regulation changes to implement the 25% test for the second half of the year and did an additional 10,000 units. So we approved nearly 29,000 units in 2025.

So Members, that's why I got so excited about this. So I'll do JV's event here. Thank you. Alright. We are now gonna go out to public comments.

Now remember, it is only on this item, which is item number two, California housing and homeless agency proposal. You see me doing this, it means wrap it up.

Thank you, Madam Chair and members. Julie Snyder with the Metropolitan Transportation Commission and the Association of Bay Area Governments. We are the parent agencies of the Bay Area Housing Finance Authority, and we are here in support of the proposal to reserve tax exempt bond authority, especially for projects that have received other state funding. This is a best practice from other states that's long overdue in California. Thank you.

Thank you. Norah Foster, a nonprofit developer, EAH Housing. We work in over 85 cities in California and serve over 25,000 households. Over the last nine years, EAH has procured awards from various state programs, such as MHP and HSE and others totaling over $408,000,000 to create over 1,300 affordable units. On average, we have leveraged these awards two and a half times or more with other private financing.

We currently have a robust development pipeline in California, totaling over 1,400 units. This proposal would make a meaningful difference in breaking ground on these shuffle radio units, whether, using the HDFC door or going through, straight to the tax credits and bonds. So funding the proposed HDFC offers a real opportunity to fund deeply targeted affordable units that currently don't have access to other local funding or federal vouchers currently.

So we support this effort and urge some robust funding for HDFC, and also urge the housing bond on the November ballot. Thank you.

Good afternoon. Beckie Flores, representing Mercy Housing California. We're a nonprofit affordable housing developer serving more than 22,600 residents statewide, including low and very low-income families, seniors, veterans, and adults exiting homelessness. We work across California to create stable, vibrant, and healthy communities, and to date have developed nearly 13,000 affordable homes. The proposed reforms to the housing development finance system, as presented in the trailer bill, would have a meaningful impact on our work, creating a more efficient system while retaining multiple pathways for development projects.

This is critical to our work, which includes a diversity of project types and funding pathways. We're supportive of setting the maximum possible allocation of tax exempt bonds to affordable rental housing. We are also supportive of a predictable HDFC set aside of 4% credits, which still allows a meaningful pathway for non HDFC and locally funded projects. We believe that an earlier reallocation date of August 1 versus November 1 would be helpful to ensuring an effective process.

We would also like to see the 9% program remain under TCAC at least until we can gain some experience with this new organizational structure.

We appreciate these efforts to create a more effective and efficient system to realize the full potential of the reorganization and one stop process, which was addressed in the earlier item. We urge you to also pursue pursue steps to maximize resources for affordable housing by reversing the proposed cuts to the housing programs in the budget and voting to place the housing bond on the November's ballot as soon as possible.

Thank you for your role in this important work, which will have meaningful and lasting impacts to our state.

Alright. With this, we're gonna keep our comments very limited. Please.

Thank you, Chair. My name is Patricia Wells. I'm representing the California Association of Housing Authorities. We represent over 395,000 households and 96 housing authorities, but I am also graced to represent the Oakland Housing Authority, one of those local funders and developers that we spoke of so much in today's presentation. We are strongly in support of all the aspects of the budget as proposed by the secretary and her team, and wanna mention some of the questions that were asked earlier in the previous item.

The secretary has reached out to the 96 housing authorities and used our on the day-to-day input to help frame some of the efficiencies of using the dollars that are being proposed here right now, as well as the efficiencies in the process. Housing authorities are the backbone of affordable housing as we not just fund the operating subsidy, but we are also developers. We are into preserving 30,000 precious public housing units.

These dollars will go toward that effort, And many of my partners speaking here today, it is the housing authority that provides the operating subsidy, often the purchase of the land acquisition and the methodology for making sure services get to the households once they find homes. So thank you for your efforts.

Thank you. And very short comments.

I hear you. Good afternoon. Natalie Spivak with Housing California. We're very encouraged by this proposal. To maximize the number of affordable homes California creates, we need to both fund affordable housing programs and use the resources we do have more efficiently.

Ensuring that state funded projects automatically receive bonds will create the one stop shop for state funded projects that other states already have. And putting a 50% baseline in statute creates certainty that political shifts won't lead us back to a fragmented system in the future. We also have additional suggestions to strengthen the proposal that are detailed in the letter we submitted to the subcommittee. They focus on prioritizing deeply affordable projects and balancing the needs of state funded and locally funded projects.

In particular, by ensuring that state tax credits and 9% tax credits can be paired with HDFC projects.

Again, this proposal can only succeed if it's resourced if the new agency is resourced. We strongly urge the legislature to push back against budget cuts to affordable housing and homelessness programs and place the bond on the November ballot as soon as possible. Thank you.

Hi. Good afternoon. Nevada Merriman, vice president with MidPen Housing. We're in strong support of this. This is something we wanted to see happen for a very long time, so we want to commend everyone here for their time and for every all staff that have put so much of their effort into this.

Aye, wanna echo the housing California comments that just came before me so I don't have to repeat them. So, a a a healthy plus one there. And then the something that really stood up for me that I do wanna lift up is the came from the legislative analyst's office that it's silent on the 9% in the state enhanced tax credits, and so we would like to see MidPen at a minimum that that's clarified that there's still an option to pair those resources.

Quick example, out in the San Mateo County Coast, we received a Joe Serna award. Those are for farm workers.

And then shortly afterwards, we were able to access 9% credits in the rural region. This is seven miles away from the mushroom shooting a few years ago. So we wanna see these programs connect still. Thank you.

Thank you.

Hello. Tia Boatman Patterson. I'm the former Director of the California Housing Finance Agency and the Associate Director in the executive office of the president in the Biden administration, in which I served for two years. I'm now one of the largest CDFI lenders in the state of California, top 25 in the nation. And so I am very much in support of what the secretary is doing with the creation of the housing development finance committee with what their goal is.

But I have to say I have significant concerns with an allocation in the statute of bonds. And I have to correct something by the legislative analyst office where he said similar to in the mixed income program. The mixed income program which I helped create and helped write that legislation for does not have an allocation of bonds.

The proposal before you is about an allocation of bonds, which means a project has to have debt, which means you will have a mortgage on that project that is completely different than the 9% program. So we are not talking about tax credits.

4% tax credits are automatically given to a bond project. We're talking about the allocation of bonds. So I want to just give you some statistics really quickly because I do not believe you should move the mixed income program over to the new committee because it was already created as a one stop shop. That was the reason why the mixed income program was created is because the governor asked for a one stop shop.

The mixed income program in 2025 created over 2,300 units at a cost about $17,000 per unit.

The multifamily housing program in 2025 created 769 units at a cost of 300,000 per unit. Your issue is program requirements, and do those programs over at the Department of Housing and Community Development align with the bond and tax credit system. And so I really do support you in wanting to streamline. I really do support you, but I think it is a program requirement that needs to be looked at and aligned.

But I do support the the new committee, but I have to tell you that I have extreme concern about setting statutorily a set aside as opposed to participating in that process, which is what the Mixed Income Program does, and it goes and asks for a demand survey, and it participates in that process, which HCD should do as well.

Thank you. Appreciate that.

Good afternoon, Chair, members. My name is Tye Shwatz with the California Housing Partnership. I wanna align my comments with Housing California and MPH, and many of the nonprofit developers who are here today. I do wanna add that we are encouraged by the governor's proposal to help streamline housing resources. Right now, delays in receiving enough financing to start construction result in 40,000 per unit in added cost.

And ensuring that state-funded developments ministerially receive bonds to access the 4% tax credits will help create a streamline housing finance system, which many states already have.

However, the trailer bill does not address the 9% tax credits or enhanced state tax credits. Since many state funded developments use these resources, we recommend allocating a portion of these resources to the housing development finance committee, to administer. Lastly, creating efficiencies in the system can only bring progress if there are resources in the system to do so. We strongly, support ensuring that the, $10,000,000,000 bond is on the ballot and that we continue to support and invest in our critical housing programs. Thank you so much.

Thank you.

Good afternoon. My name is Jenna Abbott. I'm the executive director for the California Council for Affordable Housing. I want to say first and foremost that we do support the creation of a one stop shop. We also strongly support the proposal to reserve 90% of the available bond capacity for affordable housing projects.

And while there are several components of the trailer bill that we find promising, the proposal to allocate no less than 50% of the state's bond cap to HDFC represents a substantial departure that affordable housing developers rely upon to assemble viable capital stacks. From our perspective, HDFC should be afforded time to become fully operational and demonstrate readiness before assuming control of any of the share, let alone a significant share of the bond cap.

We urge consideration of an alternative approach that preserves the certainty and predictability that currently exist within Sedlock and TCAC. Developers depend and rely upon that to move projects forward. Under CalHFA and the MIP program, it is structured to assess annual funding needs before resources are deployed.

We recommend a similar needs based framework to guide any future allocation of bond cap. We have submitted a letter in which we outline our concerns and offer recommended alternatives, and we look forward to continued engagement with the legislature. Thank you so much. Thank you.

Larry Florence, CEO and President of Burbank Housing, and we're a nonprofit based in Santa Rosa, California. We have built and developed over 7,000 units of affordable housing. We strongly support the proposal that's before you, including the allocation of bonds. We would like you to consider adding 9% credits to the mix. And I'll just give you a real-world example.

We were involved in the rebuilding of North Bay after the fires in 2017. It took us multiple funding cycles to be able to get the much needed money that we needed to be able to rebuild what was destroyed in the North Bay fires. This would go a long way to tell me to expedite that process.

Thank you.

There's JT Herchmack from the Non-Profit Housing Association of Northern California. I want to support a robust allocation of resources to the HDFC, including the proposed 50% bonds. Also considering the 9% in state credits as well. I wanna echo one of the LAO recommendations here on ensuring that we have a nimble and objective measure on equalizing these bonds, spreading these bonds out if there is not need for them at HDFC, and ensuring that that is a that is a an objective measure decided by the HDFC.

We also support the effort and urge you to reverse the proposed housing budget cuts and to support our efforts to get a housing bond on the ballot in November.

Thank you.

Good afternoon, Chair and committee members. Marina Espinosa with the California Housing Consortium. We are supportive of a one-stop shop, and there's a lot in the administration's trailer bill that we like. However, we do have some suggested changes to the trailer bill to ensure that maximum flexibility is retained under the new structure. Those changes are detailed in the letter that we submitted to the committee.

We are also glad that the proposal does not change the treatment of other resources that flow through TCAC and CDLAC, including enhanced state tax credits and 9% tax credits. Finally, we'd like to thank the administration, for all their work on this and for their openness to, gathering feedback from stakeholders.

Thank you.

Good afternoon, Madam Chair and members. Raymond Contreras with Lighthouse Public Affairs on behalf of the Los Angeles County Affordable Housing Solutions Agency or known as LA CASA. We respectfully request support for the $32,000,000 one-time investment to the California regional financing authorities, including the $8,000,000 to La Casa. While being fully funded by Measure A is still not enough and has identified a critical need for technical assistance and regional coordination to ensure these investments are deployed effectively and equitably.

The budget request would align housing investment investments to speed up the development, preservation of affordable housing, while streamlining the operation to improve efficiency.

Built upon regional capacity to innovate and better deliver renter protections and homelessness prevention programs. Respectfully urge your support on the budget. Thank you.

Good afternoon. Anya Lawler here today on behalf of the California Coalition for Rural Housing. We're a statewide organization that advocates for affordable housing for rural, tribal, and farmworker communities. CCRH is broadly aligned with the administration's goal of streamlining affordable housing finance and with the trailer built proposals themselves, but we would also like to see some more programmatic details in the statute rather than being punted to a later guidelines discussion.

For example, we'd like to see commitments around rural farmworker and tribal funding targets and minimum set asides, language committing to geographic equity, and an explicit commitment to respecting tribal sovereignty.

We also wanna ensure that we maintain the long standing policy of limiting eligibility for the Joe Serna junior farmworker farmworker housing grant program to California based nonprofits. We include additional recommendations in our comment letter to ensure that the HCD works to equitably serve the housing needs of rural California as well. Thank you.

Good afternoon. My name is Carole Conn. I'm the Executive Director of Project Sentinel. We're a comprehensive fair housing organization, and we stand in support of the California Housing and Homeless Agency proposals, being considered today. In addition, I am here representing a consortium of 13 fair housing organizations statewide.

Independently, housing discrimination in California is alive and well, I'm afraid to say. There in recent reports and trends, we've seen a a 1,300,000 discriminate housing discrimination complaints in the last two years, over eight almost 8,000 of those here in California in 2024. With that said, we are now we now have a champion on the Senate side. Senator Wiener is sponsoring a bill for California the very first time ever, to fund fair housing services, which we understand is very tied in to everything that's been discussed here today.

That legislation or that proposal is for $10,000,000. It's not that much of an ask in the sense that the critical channel of fair housing, if it goes unaddressed in California due to changes at the federal level, there will no longer be protection for LGBTQ persons, families with children, voucher holders, and immigrants. Thank you for your consideration of this.

We'll be following up.

Please make sure your comments are on item number two.

Good afternoon. I'll try to make my comments brief. Dante Golden here, Senior Director of Policy for the San Diego Housing Federation. Our members include both nonprofit and for-profit housing developers committed to delivering homes for San Diego's lowest-income residents. We support the overall framework of the creation of HDFC and the one-stop shop.

Vision is the right direction, and our members are eager to see it succeed. Two implementations concerns as they've come up, with conversations. First, the 50% bond set aside, until we better understand HDFC and how it functions. In practice, a rigid 50% floor risk necessarily tying up on resources. Second, the reallocation deadline.

We believe that moving it from November 1 to August 1, if HDFC demand doesn't fill, set aside our members need those bonds available before the final funding round closes and not afterwards.

So we look forward to working together on these, improvements. Thank you.

Good afternoon. Ben Barker. I'm a municipal adviser to the California Municipal Finance Authority. I've personally, over the last twenty years, participated on about 1,500 bond issuances for affordable housing projects and about a 100,000 units. Structurally, we agree with the outline of what's happening, I think, as long as the cleanup language was stored and some allocate some of the language gets cleaned up.

It makes sense. I do think that it would be important to look at the fifty-fifty split. Having one be legislative versus the other being regulatory would make a big difference. I think it's important to put a lower floor on the fifty-fifty and then have it possible to have a regulation within the governor's office and the treasurer's office that you can move that from maybe a 30% up to a 60%, depending on the year.

We have macroeconomic issues that constantly fluctuate on what's happening, and it would be rough to peg us into a 50% hold when we don't know what's gonna happen in a few years from now.

Thank you.

Alright. I see nobody else approaching the microphone. Members? I will just say this is obviously quite complicated. I definitely appreciate the public's comments, a variety of comments, and, of course, our LAO.

We are going to be holding this item open, and we also will be having another hearing in mid May related to various held open comments. So it'll allow some people to keep speaking to one another. And I definitely think that there is some work to be done, but I think we can get there. And like I said before, anything that we can do to make sure we can move these projects is important, but we gotta make sure we get this right.

So with that, we will be closing item number two, opening item number three, but yes.

Alright. We are gonna open this item, and I see two of our same presenters. It's item number three. I know myself and Assemblymember Ward have to be going to different committees, so we will have our favorite Assemblymember here leading us. Assemblymember Jessica Caloza will do the remaining items.

And then okay. I was gonna talk, but you can hear me. If I can come back, I will come back. If not, we will see you at the next hearing.

Thank you very much. Alright. So she's gonna take two minutes.

I'm good. Please begin. Okay.

Okay. Okay. I I will be briefer on this one. So, again, Christina Moon, Deputy Secretary of Housing Finance with BCSH. Just to start off, a part of this item is a BCP that has a net zero transfer of staff and associated general fund dollars from HCD to HDFC.

The transition team, is adding 14 positions from HCD, which represents $1,491,000.000 of general fund dollar support from HCD to HDFC, and that team is really gonna do the transition and design work that we've been talking about to create that one stop shop under HDFC. So that is effective 07/01/2026. Okay. So for the affordable housing sustainable communities program, our proposal for this item includes statutory changes to modernize the program. I told you it's hard and complicated.

This is an example of one of those, programs. It's really challenging to, you know, layer on, multiple programs on top of each other, and this program in particular has a lot of different priorities and complexity, that just adds more time and cost for our projects, when we need those projects the most for our communities.

So this is the very thing we're trying to solve for, and critically for this resource, housing near jobs and transit is a central component of our climate strategy for California. We are looking to reduce vehicle miles traveled through the strategy and reduce greenhouse gas emissions. So we're bifurcating the program into two areas, affordable housing and sustainable communities. We're bringing the housing funding into the one-stop shop for HDFC, while the Strategic Growth Council, SGC, maintains its leadership in infrastructure and regional planning.

Together, we will ensure that the goals of the program remain.

Housing, land use, transportation initiatives will remain strategically aligned to meet our shared climate and VMT reduction targets. The proposal does this by keeping the program intact, but shifting the administration to improve efficiency. This will allow us to deploy our resources more efficiently, deliver, at greater scale.

So specifically, the proposal has up to $560,000,000 annually, or 70% of AHSC funding, supporting affordable housing through the one-stop shop at HDFC, and then up to $240,000,000 annually, or 30% of the AHSC funding would support sustainable communities administered by SGC. Again, for us to really get a functional one-stop shop, we really need to move those AHSC housing dollars within that structure.

This is really critical because AHSC is the largest state source of housing capital funding that is ongoing. And then on the sustainable community side, our colleagues at SGC have shared that having this more reliable recurring allocation can help unlock their finance-ready projects, which range from transit corridor accelerators to climate-smart infrastructure. So that can help them focus on integrating urban infill with the protection of critical ag lands, ensuring that their investments are community-driven and measurably effective in advancing climate goals.

So to that end, together, we have maintained the program's goals of 50% of expenditures benefiting disadvantaged communities or DACs, and we believe that integrating AHSC housing funds into the one-stop shop will enable communities to be better served by all of our programs. Thank you for this opportunity to share our proposals and, welcome your questions.

Thank you so much for your presentation. We'll turn now to finance if you have any comments.

Blair Huxman, Department of Finance. I have nothing to add.

Thank you. LAO?

Yeah. This really is continuing with the theme that this subcommittee has been hearing about for the last couple of hours on creating this streamlined approach for assembling funding for affordable housing for developers. We do see merit with the governor's proposal to move the affordable housing component of this program to HDFC. Doing so has the potential to further simplify how developers cobble together their funding for their housing projects.

I would also add that, HCD already has, a role in reviewing and implementing the program. So it has existing in house knowledge. This would not be a steep learning curve for for the agency and the department to to have to learn a a program. It's something that they're already very familiar with. We just have we have a couple modifications the legislature might wanna consider.

One of them is around giving more flexibility to developers that might Wanna submit a project proposal that integrates both housing and transportation components. The other is around, you can see actually on the slide about proposals have 70% of the funding for housing and 30% for sustainable communities. That well may may be the the right split between the two, but, it's really too early to know because this is a new proposal.

And so we recommend the legislature require the administration to report back at the end of the 26-27 award cycle, around applicant demand and what that demand was for the housing portion versus the transportation or sustainable communities component. The legislature could then use that information to help decide whether this funding split makes sense going forward.

And then just lastly, we don't have any concerns with the proposals in your agenda to transfer those positions from this program to HDFC, from the Strategic Growth Council to HDFC, and from the multi-housing program to HDFC. It's consistent really with, the latter is consistent with the real reorganization plan that the legislature approved last year. Thank you.

Thank you so much. All the members of the committee are in other committees and running around, but this is an item that's important to this budget, and I know to the Chair, she had to run off, to present an item really quick, but we'll be back shortly. From my end, I had one question. When will HDFC begin working on the regulations for the implementation of the AHSC program? And when does HDFC anticipate awarding the first round of AHSC dollars?

We're gonna have to come up with, I think, different acronyms or something. But yes. Go ahead.

We're not done until every a to z 26 letters is in the in the mix, I think. But the work on that guidelines piece has already begun. So we're doing the work right now with our goal our goal this summer to have out draft guidelines that would be this single set of guidelines, administering all of the multifamily competitive sources. So one unified scoring rubric, universal threshold, so where people are asking the same questions, you don't each get to ask it a different way.

But then having those funding specific aspects, embedded within those guidelines as well.

And then our goal is to do two rounds of public comment, with adoption, in the the first part of 2027, followed by receiving applications and then making awards in the first awards would be in 2027 out of these, this consolidated system.

I would also add Megan's really championing this work, across CalHFA and HCD, and this is a natural outgrowth of the 519 work groups discussions. There's been a lot of deep thinking there. And what we realized is even though AB 519 says come up with recommendations, you Kinda have to do the work to figure out what the best recommendations are. So that's what that team is doing is they're going deep on the the regs To pull it together.

Thank you both. And also wanted to add that I agree with the LAO recommendation to report back to the state legislature. Fingers crossed, I will still be here to hear how the last round went, you know, each type, the funding requested, the type of applications. I think this is all great to align with the goals of, you know, the centralized streamlined approach to housing that I know the state will continue to lead on.

So with that, we are now going to go to public comment for any people in the audience who would like to speak on this item.

Just a kind reminder to stick to this item topic. Oop. There you go.

Tia Boatman Patterson, recovering redevelopment attorney. And so I I just wanna raise some comments regarding legislative history and legislative intent. When the affordable housing sustainable communities program was created, it was in part to backfill from lost redevelopment dollars. And so as you're considering where to move those funds, because I do think it's an overly complicated, HCD is one option. But a second option would be to block grant those funds down to your regional, COGS.

Those folks that are doing your land use planning, those folks that are looking at, sustainable communities and trying to get to some of those goals. One of the issues with redevelopment is that you had funding coming from the bottom up and projects coming from the bottom up. And since redevelopment has gone away, you are now having the state pick individual projects, which is very complicated, very costly, and very time consuming.

So pushing those projects down closer and having them perhaps administered from a regional level is something I think you all should consider, especially when you're talking about disadvantaged communities and some of the original intent of the legislation.

Mariela Ruacho with the Leadership Council for Justice and Accountability. We urge you to maintain the existing requirement of at least 50% for AHSC funding to be directed to disadvantaged communities for affordable housing and a system of transportation. At this this requirement is removed from the proposed AHSC trailer bill language to pursuing 50%. Additionally, it is critical that AHSC's program supports sustainable development across different types of cities and communities throughout the state, including but not limited to rural towns and communities.

We urge the legislature if you move forward with this splitting the AHSC program into two requirements into two programs, two requirements that you how the program will be implemented to meet climate goals, serve disadvantage, 50% of disadvantaged or more communities, implement affordable housing and existing in rural communities, and clarify on how both components will be connected for communities that want affordable and public transportation project options.

Thank you.

Good afternoon again. Natalie Spivak with Housing California. We're very encouraged by the proposal to bifurcate the housing and sustainable communities components of the AHSC program. AHSC's track record of producing integrated affordable housing and transportation infrastructure is impressive, but this integration has created significant challenges in practice. Affordable housing developers have struggled to meet complex requirements to provide transportation improvements in partnership with local governments, which has increased project timelines and costs.

Moving AHSC housing capital dollars to HDFC will also ensure that AHSC projects can benefit from the streamlined processes and requirements that HDFC intends to provide. We recommend that the AHSC housing allocation continues to prioritize projects that reduce the most greenhouse gas emissions in line with the goals of cap and invest, and prioritizes geographic equity to ensure that all parts of the state can benefit from climate-friendly housing. Thank you.

Hi. Good afternoon. Tye Shawatz with the California Housing Partnership. We align our comments with Housing California and wanna underscore that we would like for the program to maintain geographic equity and cap and invest priorities like GEG emission reductions within the program. Thank you so much.

Good afternoon. Anya Lawler on behalf of the California Coalition for Rural Housing. Plus one to everything everyone has already said about how AHSC is far too complicated. One of our nonprofit developer members told me that their last AHSC application, they spent over $60,000 putting it together, and did not even win. So that just tells you that it's a program that really needs to be streamlined, but without losing its important goals.

I also wanna echo, my colleague from Leadership Council that we really wanna maintain the 50% disadvantaged community threshold in that program. That was a hard fought win over 10 rounds of guidelines, and we don't wanna lose it. And then also and these two things might sound at odds, but I promise they're not. In rural communities, especially, sometimes having to marry the affordable housing and the the the active transportation or transit investments actually makes it too complicated to move a project forward.

But in other cases, it's actually the only way to drive those transit resources into the community, and so we would really like to explore having a housing only path and a joint path to make sure that rural communities still have access to those, sustainable transportation dollars.

Thank you.

Good afternoon, Chair and staff. Vincenzo Caparelli here on behalf of the California Association of Councils of Governments. I wanted to make a brief comment on the governor's proposal related to splitting AHSC. We support the governor's efforts to modernize the program and especially appreciate that the proposal includes requirements to incorporate regional priorities in the sustainable communities allocation. Thank you.

Good afternoon. JT Herchmack with the Nonprofit Housing Association of Northern California in support of this proposal to move ASEC over here. We are also encouraged by the commitment to continue rewarding projects with the highest greenhouse gas reductions, and we would like to ensure that continues when the project is moved over. Thank you.

Thank you everybody who came to give your public comment, all the providers, across the state.

We know that this has been a long process, for the agency, for all the providers, the developers who are here, and we appreciate you taking the time to work to make state government work more efficiently to streamline it and being really part of the process, because it sounds like a lot of the recommendations and the things that you're saying in public comment are also being taken very seriously by the agency as they are by this committee. We are one moment.

Okay. So we are going to hold item number three open. And, before we go on to our fourth, item, I did wanna note that if you're here for item 5, 6, and 7, today's a really busy committee hearing day, unfortunately. And, I did wanna make sure that if you're here for those items that you also have more members to hear from those items. So we're actually gonna, move those items for, a hearing in May.

That said, we do know that there are many folks who traveled here, for item number four. And so we're gonna take up that item, and that will be the last item for today. So thank you for your testimony, and we'll call up the presenters for item number four. Okay. So next up, we're gonna do issue four, which is the codes and standards fee adjustment trailer bill language from the Department of Housing and Community Development.

Please introduce yourself, and feel free to begin.

That's right. Good afternoon. My name is Matt Schueller. I'm the chief operating officer at the Department of Housing and Community Development. And I have with me.

Kyle Krause, Deputy Director, codes and standards division with HCD.

So for a brief background on the proposal, the division of codes and standards develops, adopts, and enforces statewide building standards for housing, manufactured homes, and special occupancy parks. It ensures the health and safety of residents, regulations. These activities redo rely predominantly on special funds. The revenue generated for these special funds is derived from statutory and regulatory fees charged to customers for services is provided by codes and standards. However, most of these fees have not been adjusted over time.

Without the statutory authority necessary to adjust fees, codes and standards will face a fiscal deficit requiring immediate cost cutting measures such as leaving vacancies unfilled, reducing position authority, or reducing services. This proposal would provide the following flexibility. For fees set in statute, we'll allow HCD to make administrative fee adjustments consistent with the consumer price index or CPI starting 07/01/2026 and for each year thereafter.

For fees established in regulations, it will allow HCD to adjust fees by CPI starting 07/01/2026 and each year thereafter using a streamlined regulatory process from the Office of Administrative Law. The annual fee adjustments proposed will not be automatic, but rather would be carefully considered by HCD as part of ongoing annual analysis to only increase fees to provide adequate revenue, to cover the cost of providing required services, and to align with existing statutory guardrails governing the collection of revenue.

For the regulatory fee adjustments based on CPI, HCD will follow OAL's file and print process. HCD may seek input and will continue to communicate any updates on fee adjustments to interested parties through tools such as e blast, information bulletins, and website postings. Although HCD has made some regulatory fee increases as regular as recently as 2024, and HCD has considered using OAL's regular rule making process for additional regular regulatory fee changes, the minimum eighteen month timeline makes that approach unsustainable for routine adjustments.

Instead, this proposal establishes a long term approach that allows regulatory fee increases to better align with the actual cost of services while remaining within those existing statutory guardrails that limit fee generated revenue. In closing, it is important to note that this proposal only partially mitigates and does not fully solve the fiscal deficit issue.

It is projected that while the proposal would extend the time frame, the fiscal deficit would still occur in fiscal year 2030-31. This proposal allows HCD to address immediate fiscal concerns, and the approach balances the need for increased revenue with sensitivity to minimizing the financial impact to park owners and mobile homeowners. And with that, happy to, provide more information and answer any questions you may have.

Thank you for your presentation. We'll, turn next to the Department of Finance if you have any comment on this item.

Blair Huxman, Department of Finance. I have nothing to add.

Thank you. Next, we'll turn to the Alio.

So the concept of pegging fee increases to inflation seems reasonable, and we've heard from HCD about some projected deficits and a couple funds. Having said that, the proposal does raise questions and issues for legislative consideration. You know, the potential for fee increases comes at a difficult difficult time for Californians, you know, with affordability being such a important concern. And under the proposed trailer bill language, more than 20 fees would be subject to possible increase starting in July and annually thereafter, as you just heard.

So legislature really wanna understand better what impact these three increases, especially the cumulative effect, would have on park operators, on manufacturers, on homeowners, and others.

And maybe that get some of that information of public comment. And the the agenda, the staff lays out additional questions we think are very good questions as well for the legislature to get clarity on. Thank you.

Thank you. And from my end, it's I wish more of my colleagues were were here if they were in another committee. I know there's a lot of interest around mobile homes, given that, many of our districts have a number of mobile home residents and properties on there. Agree with some of the LAO comments really around affordability, what this means right now. But, can you talk a little bit about kind of how and when will the increase in fees begin and and end?

Perfect. In terms of the fees, you know, beginning to be increased, we would look to do those in the budget year starting the process in July 2026. Obviously, with the regulatory fees, we would have to go through that file and print process. It is anticipated that the CPI based increases would continue, certainly, to add an escalator in order to be able to increase fees over time, which we don't currently have, to provide that, you know, some cushion against rising costs.

Again, it doesn't fully solve for the problem.

Right? We, have provided an example to show some of the impact. Right? Or anticipated impact to, both park owners and homeowners. But that is the basic premise for the the proposal as we understand the impact on people and especially at this time we're facing every dollar does matter.

So we did want to come in with a reasonable approach to trying to to get at and solve this issue.

And can these new fees be passed from the mobile park owner to to the resident?

Yes. So, Kyle, you wanna would you like to take that question?

So there are some fees that can be passed on to homeowners that lease or rent lots within mobile home parks. So, for example, the mobile home park maintenance fee, this is a fee that funds HCE's efforts to inspect mobile home parks with a goal of inspecting 5% of the parks per year, which is about a 185, 190 parks. But that $4 per lot fee, the law allows the park owner or operator to pass on one half of that $4 fee to the resident.

So of that $4, fee, total that the park can charge the resident is $2. This proposal, based on CPI increase, would increase that $4 fee to $5.

So the part or the portion of that fee that could be passed on would be $2.50 or half of the $5 fee. So we're looking at very, minor increases as as Matt discussed starting, slowly and being cognizant of the impact to homeowners and park owners. The example of a typical mobile home park would increase the, fee for homeowners between a dollar 50 or and $2.50 a year, $1.50 or $2.50, and that's a dollar 50 and $2.50. Sorry.

And for a park owner, the increased annual cost would be about $217.50.

Thanks for sharing that. And I think having family members who also have lived in mobile home parks, in mobile homes, I know it's one of the few ways which we provide affordable housing for many folks, and that's the reality for a lot of people. So I think the compounded cost of what this looks like will add up even though I know minimally it seems like it's a few dollars a month.

What does that look like for the second year of implementation? Does it increase?

Can you just walk us through after this first year of implementation what that looks

like? So we would be applying that that 3% increase to fees. Again, after doing our annual assessment to see if that increase is warranted and within the guardrails that we have that, again, govern the collection of fees, the overall amount that we can collect.

And before I go to the public comment, would love to hear from you. How did the agency receive public comment on this? Was there any public process reaching out to, you know, current residents in in mobile homes? Can you talk to us about that?

Yeah. We, we engage annually, during the park maintenance inspection program annual meetings. They're actually biannual. Sorry. We meet every six months, and we engage with, residents and park operators, and the legislature to report back on, the progress of our mobile home park maintenance inspection program.

The typical violations that we see, common violations from homeowners and also common violations from, park owners and operators. And we gain feedback through that process on how we're doing operationally to meet individual needs in mobile home parks. But also, we engage with our industry partners, owners and operators of mobile home parks, manufacturers of, manufactured homes, which are the newer version of mobile homes, that are basically HUD homes built to HUD standards. So we have a robust, public, process.

And anytime we propose adoption of regulations, we engage with our, stakeholders in, focus group meetings or offer comments through public, process through office of administrative law, 45 day public comment, and other public procedures.

Thank you. And is there a funding gap that we're trying to close to to can you share a little bit more about that? What is that number and in this

We've done some projections. So we we have a target that we're trying to aim for to solve, and that's the projections that we've prepared. Matt's gonna cover those and explain what where we're headed.

And there's a cap. Is there a cap to when the 3% applies?

There wouldn't be a cap per se. It's giving us the authority to increase fees, both statutory fees, some of which are significantly outdated, were established, for example, in 1990 and have never been adjusted. We have many that are decades old, but this would give us the authority to increase fees, both statutory and regulatory based on actual CPI increase. So that would move the needle.

And as Matt pointed out, we would evaluate and analyze our revenue and expenditures annually to determine which fees are are, ripe or need to be increased to meet our operating expenditures.

So under the current status quo projection, we're projecting that in, fiscal year twenty nine thirty, we would have a deficit a deficit of approximately $3,100,000. And the annual expenditures are roughly $50,000,000 a year to about currently $44,000,000 a year in revenue collection. So we're really trying to solve for about a $6,000,000 a year gap, again, which presents itself right a couple of years from now.

But the important thing is is we start to we have to start taking action now in order to even be able to mitigate into the following year, 3031. So under the proposal, we would be facing that deficit again because this 3% CPI increase only makes up about a million dollars of that of that of that gap.

Thank you. With that, we will turn it to public comment. If you have if you're here for this item, kindly make your way to give your name, organization, if any.

My name is Jody Johnson. I'm a Mobile Home Park resident in strong opposition to HCD's fee increase. Many of us are living on fixed or modest incomes. We are not wealthy. We are just trying to hold on to our homes.

Our grocery bills keep rising. Our utility bills keep rising. Car insurance, home insurance keep rising. Any extra fee hurts us. We are targeted in this.

We are the only ones with this proposed increase, and we're all vulnerable and senior mobile home park residents. The compounding impact of these autopilot rounding up fees will add up to a couple $100 very quickly. That may not be a lot for many of you, but for us, it is. Vote no.

My name is Tim Porteous. I also live in a mobile home. Is there another example of a state agency raising fees on Californians like me living on a very fixed income, modest, and then rounding up those fees automatically every year? My co pay for my health insurance and prescriptions have all gone up. Now the state is looking to balance its agency books out of our pockets.

That's absurd. Who is proposing these types of fees? Should they be running our government? This is the exact opposite of what we need. This is insult to injury.

Vote no.

Good afternoon. My name is Jennifer Boyle. I'm gonna repeat with what my neighbor actually just had to say to reinforce that I also feel allowing a state agency to raise fees on mobile home residents and then rounding those fees up automatically adds insult to injury like he said. Is there another example of a state agency raising a fee and rounding it up? All we hear and read about is how concerned you are about affordability.

Is that just hot air? Because what's being proposed sure makes it look that way. In 2009, the legislature took away the COLA on SSI, SSP for the aged, blind, and disabled. This proposal isn't much different, but you can make a different decision here. What do you want me to tell my neighbors when I get home tonight?

Vote no. Thank you.

Yes, my name is David Berry, and I live in a mobile home. And I ask you, is there another example of a state agency raising fees and then rounding those fees up automatically? And if not, you wanna start with us, really? We hear and read a lot these days about affordability. No.

Affordability. Does this this fee proposal what you mean by that? Why our Social Security benefits aren't rounded up. Nothing about this proposal makes sense to Californians like us or any Californian. If you don't believe me, ask them.

Thank you.

Hi. My name is Nancy Hernandez. I'm a mobile home resident in strong opposition to HCDs fee increase. Many of us are living on a fixed modest income. We are not wealthy.

We are just trying to hold our homes and raise our family. Our grocery bills keep rising. Our utility bills keep rising. Our car insurance, home insurance, and extra fees hurt us. The compounding impact of those autopilot's rounding up fees will add to a couple of $100 very quickly.

That may not be a lot for many of you, but for us, it is. Vote no.

My name is Malcolm Sibley. I am a mobile home resident, and I strongly oppose the proposed HCD fee increases. We have never seen anything like this. Fees that get rounded up to the nearest doll dollar automatically every time. Many of us are seniors living on limited incomes.

Our grocery bills are rising. Our utility bills are going through the roof. Now you want to round up our fees automatically and to do so without any checks or balances. That seems like an abuse of power.

Good afternoon. I'm Janice Kader Thompson. My on the Petaluma City Council, and I'm here representing mayor McDonald and the City of Petaluma and the city council. We oppose, the changes that are being proposed with HCD. Every week, we have mobile home park residents come, and they talk about the fee or the legal fees that they're encountering now just because, they're being sued constantly for, our ordinances being sued, our overlay is being sued upon, and it's costing us a lot of money.

It's costing them a lot of money, and we deserve better than a proposal rounding up fees. I mean, if you go to a grocery store and they say to round up your grocery costs, are you gonna do that? But that seems to be what's happening.

And I just wanna leave one thing with you is that many years ago, mister Hansen that lived in a mobile home park, while I was sitting with he and his wife, he had his pills and he was cutting them in half because he couldn't afford them. And so this means a lot to the city of Petaluma.

It means a lot to me. These are people I represent. I've been with them for 25 years, not on the council all the time, but I've been with them. And I hope that you understand the impacts that this is gonna have, and I understand the impacts as far as, the budget constraints. We're all feeling them.

So I do understand that, but I think this is unreasonable, what you're requesting, and I would appreciate if you would go back and review this and make it so it is fair to everyone. Hedge funds are buying mobile home parks with the return of 17%. That's not what we should do be doing with our seniors. Thank you very much, and I hope you oppose this today. Thank you and work together to make it better.

Good afternoon. Denise Choiselop with the California Coalition for Youth. We urge the committee to remember the developmental needs of youth that are much different than the homeless than the rest of the homeless population. Just as we've taken a different approach for youth in the juvenile justice system by no longer sentencing youth for under the age of 25 to state prison. We must take a developmental approach for youth in the homelessness response systems.

That's why the legislature has created the youth set aside in the homeless housing assistance and prevention program or HAPP. We urge the committee to provide a billion in ongoing funding in HAPP and continue an increase of youth set aside in 25% so we can focus as far upstream, as possible. The lack of high school diploma is the biggest indicator that a young person, will experience homelessness later in life, and fifty percent of that is chronic home chronic adult first experience homelessness as a youth.

Youth are disadvantaged in many ways just for being young. They lack credit, rental histories, and earnings, and we really need to ensure that we appropriately support them. Thank you.

Thank you. And just a reminder that we're on issue number four. If you can please stick to this issue item. Thank you.

Thank I think some of us drove quite a few hours. Good afternoon, Members of the committee. My name is Juan Estrada, and I'm with with with Bill Wilson Center located in Santa Clara County, and which has been providing services to homeless youth since 1973. We respectfully request that the HAPP program for round seven be increased from 500,000,000 to 1,000,000,000 and on an ongoing basis.

Further, we would like to see the youth set aside increase to 25% as it ensures focus on ending homelessness as far upstream as possible since fifty percent of chronically homeless adults had their first episodes of homelessness as youth.

This funding has benefited youth in multiple bills and center programs, including the Safety Net Shelter, the only shelter for unaccompanied minors in our county, and the direct cash assistance program for college engaged transition aged youth experiencing homelessness. This program has helped students at San Jose City College and other local community colleges find and retain housing while pursuing their education. Again, please restore the proposed funding to 1,000,000,000.

The currently planned 50% reduction in funding would reduce our ability to impact youth homelessness now while simultaneously increasing the likelihood of future chronic homelessness. It is also important to increase the youth set aside to 25 because while the pay count is a key determinant of federal and HAPP funding, it significantly underrepresents youth experiencing homelessness.

The 2024 pay count captured only approximately 9,000 youth and young adults, including 1,900 parenting youth and their children as experiencing homelessness. However, nearly 48,000 unaccompanied youth and young adults, including parenting youth and their children, access services per HDIS in 2024. That's over four times the youth identified in the pit. Thank you for considering our request and hearing our comment.

Good afternoon. My name is Michelle Moaning. I'm sorry. I am a mobile home owner in a fairly local mobile home park and have just recently experienced in the last five years 30% increase in my space rent. So even a dollar or a dollar 50, it affects us. So I am urging I'm definitely opposed to any carte blanche increases. Thank you.

Good afternoon, Madam Chair, Members. Chris Wysocki with WMA, and we're in respectfully, would request that this budget item be either be rejected or held over. Since 2024, there were roughly 20 or so mobile home park fees that were increased by HCD by an average of 20%. And our belief is that increasing fees every single year by a CPI would be an inappropriate use of state's policy if you really wanna care about affordability issues.

And one of the things that we kind of point out is that rounding up, we we just fail to see the logic of that.

You know, imagine if you're at a retailer and the retailer decided to raise a candy bars price from $4.25 just to $5. It doesn't make a whole lot of sense. With permit fees and the variety of fees that are paid by mobile home park owners, an automatic CPI adjustment seems out of order, especially when many local rent control ordinances in the state tie the hands of mobile home park owners to a percentage of CPI for rent increases.

So you're really in many local jurisdictions, you have 60% of CPI being able being the base floor of the rent increase, but you're gonna have CPI adjusted fees on the other side, and there's just a big problem in that from our standpoint. So we'd agree we'd urge a rejection or at least holding this over.