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Newsweek
2 days ago
- Business
- Newsweek
Major Change Coming to California Housing Market
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. California, which many consider the epicenter of the U.S. housing affordability crisis, is set to finally create a state agency focused exclusively on housing issues. Until now, it has been up to the Business, Consumer Services and Housing Agency (BCSH) to try to fix the Golden State's many issues related to housing—from its sky-high prices to the homelessness crisis. Its tasks range from licensing and regulating over 4 million professionals, businesses and financial services in California to boosting the availability of safe, affordable housing. Now, following a proposal by Governor Gavin Newsom, the BCSH is set to be dissolved and replaced by two new agencies: one which will focus on housing, and one which will focus on business and everything else. This is due to take place on July 1, 2026. How Will the New Agency Work? According to Newsom's plan, the BCSH will be split into the California Housing and Homelessness Agency (CHHA) and the Business and Consumer Services Agency (BCSA). This reorganization, the governor said, will institutionalize housing, homelessness and affordability as "long-term priorities." Construction workers build a home at a new housing development on July 1, 2025, in Hercules, California. Construction workers build a home at a new housing development on July 1, 2025, in Hercules, "complex and multifaceted" issues are "deserving of full and prioritized attention," Newsom said in a statement last week. "I am grateful that the legislature recognized the need for a new standalone agency dedicated to addressing these vexing issues that continue to face our state and nation, so that these issues will never fall into the shadows again. We have a moral imperative to continue this work and to ensure every Californian has a safe place to call home." The BCSH said in a statement to Newsweek that since it was created in 2012, "the housing and homelessness, civil rights, and the consumer protection portfolios have greatly expanded to address urgent and emerging needs that impact all Californians." The creation of two new agencies, it said, "will allow greater focus on ongoing reforms and improvements related to the state's housing and homelessness policies, civil rights, and consumer protection. This focus creates more opportunity for faster response and direction, leading to faster policy implementation." Currently, California housing developers "must navigate a complex process to receive state investment, including grants, loans, bonds, and tax credits," the agency said. "The state has made efforts to simplify and harmonize this system, but more must be done." The CHHA will include five different departments: the Housing Development and Finance Committee (HDFC), the Department of Housing and Community Development (HCD), the California Interagency Council on Homelessness (Cal ICH), the California Housing Finance Agency (CalHFA), and the Civil Rights Department (CRD). These departments will be responsible for handling the state's housing programs, tackling homelessness in the state and partnering with other state agencies to address interconnected issues. BCSA, on the other hand, will be fully focused on serving California consumers and licensed professionals. "This bold plan shows we are being more aggressive in prioritizing change for the better," said Tomiquia Moss, secretary of the BCSH. "This will enable us to better reach our goal of 2.5 million new homes by 2030, with one million of them being affordable housing. I'm extremely pleased the Governor is cementing his legacy by taking the Administration's accomplishments to the next level, providing the structure to make lasting and sustainable change." Will This Help Fix California's Housing Crisis? According to data from the U.S. Department of Housing and Urban Development (HUD), roughly 771,000 people experienced homelessness on a single night in the United States in 2024—up 18 percent from a year earlier. The country's housing affordability crisis has likely played a role in recent increases: Since 2020, the number of people experiencing homelessness in the U.S. rose by 33 percent at the national level, according to HUD. In 2024, 24 percent of the nation's entire homeless population was in California—one of the most expensive housing markets in the country. All other states, with the exception of New York, had rates below or at 5 percent. According to the latest Redfin data, a typical home in California had a median sale price of $865,600 in June—nearly double the national median of $447,435. Experts say that both the affordability and homelessness crises are closely related to the lack of available, affordable homes in the state. California is currently trying to reduce red tape and streamline the process for building new homes, including by revising its environmental law to make homes cheaper and quicker to construct. Sarah Karlinsky, director of research and policy at the Terner Center for Housing Innovation of UC Berkeley, thinks that the creation of a new agency is a positive step toward fixing the state's housing troubles. She is particularly excited about the CHHA's Housing Development and Finance Committee. "Right now, the funding that goes into building affordable housing [in California] is spread across two separate constitutional officers. You have the governor and you have the treasurer, and the governor has a certain set of funding and then the treasurer has, underneath the treasurer's office, two other really important pieces of funding: low-income housing tax credits and what's called tax-exempt bond debt," Karlinsky told Newsweek. "Those are real significant funding sources for affordable housing production, which are governed by committees composed of different people within the government," she said. Under the changes introduced by the creation of an ad hoc agency, there would be one single committee governing all of the different funding sources. Before Berkeley, Karlinsky used to be a developer of affordable housing herself. The process of applying for funding, she said, meant applying for six to seven different sources, wasting considerable time and money in the process. This should no longer happen under the new agency. "The hope is [that], eventually, affordable housing developers can just go apply one time and get all the money they need and then go build their project," Karlinsky said. "And the reorganization that has happened took the first step towards making that happen."
Los Angeles Times
13-07-2025
- Business
- Los Angeles Times
California, epicenter of the nation's housing crisis, is finally getting a housing agency
After years of soaring rents, increasingly out-of-reach home prices and an enduring homelessness crisis that touches every corner of the state, California is finally creating a state agency exclusively focused on housing issues. You might wonder what took so long. Earlier this year, Gov. Gavin Newsom introduced a proposal to split up the Business, Consumer Services and Housing Agency — an awkward grab bag of disparate bureaucratic operations — into two fresh agencies: one just for housing and homelessness-related departments and one for everything else. The Legislature had until July 4 to veto the plan. It didn't (though some Republicans tried). Now the work of setting up California's first housing agency begins. Supporters of the bureaucratic reshuffle say the move is long overdue. In surveys, Californians regularly name housing costs and homelessness as among the state's top concerns. That alone warrants the creation of a new Cabinet-level advisor to the governor, said Ray Pearl, executive director of the California Housing Consortium, which advocates for affordable housing development. 'A Cabinet-level secretary who will sit with other Cabinet secretaries, whose purview will be housing … that is elevating the agenda to the highest level,' he said. Pearl, like virtually every expert interviewed for this article about the new agency, described the reorganization as 'just the first step' in bringing much-needed order and efficiency to California's network of funding programs for affordable housing. 'Simply moving people around and giving them a new business card doesn't change the system,' he said. A spokesperson for the governor stressed that the creation of a new housing agency is part of a broader effort by Newsom to prioritize one of California's most vexing issues. Since taking the helm of state government in 2018, the governor has ramped up pressure on local governments to plan for more housing, urged them to clear encampments of unhoused Californians and pushed for legislation aimed at ramping up construction. 'This is the first administration to make this a part of our everyday conversation — putting a magnifying glass on the issue of homelessness and finding ways to effectively address it. These structural and policy changes are going to create a generational impact,' said spokesperson Tara Gallegos. Among the seven Cabinet-level agencies, the BCSH has always seemed like the 'everything else' wing of state government. Affordable housing grantmakers, lenders and urban planning regulators share agency letterhead with cannabis and alcohol industry overseers, professional licensors, car mechanic watchdogs and everyone at the California Horse Racing Board. 'We used to call it 'The Island of Misfit Toys,'' said Claudia Cappio, who ran both the California Housing Finance Agency and the Department of Housing and Community Development in the years immediately before and after 2012 when both were packed into the newly created BCSH. 'Imagine a staff meeting of all those things … I learned a lot about horse racing.' Aside from giving housing and homelessness their own box atop Newsom's organizational chart, the chief selling point of the reorganization has been to simplify the state's hydra of affordable housing financing systems. Currently, there is one state organization where affordable housing developers apply for loans, another where they go for most grants, a third where they apply for the federal tax credits that builders use to entice private investors to back their projects and a fourth for the bonds needed to secure many of those credits. This doesn't include one-off programs for veterans, transit-oriented development and short-term housing for homeless people, which are sprinkled across state government. Complicating things further, the tax credit and bond funding programs — the backbone of funding for affordable housing development across the country — aren't even under the governor's control. Those programs are run by the state's independently elected treasurer. 'Many, many states have what is essentially a housing finance agency that controls the majority of affordable housing funds,' said Sarah Karlinsky, who directs research at UC Berkeley's Terner Center for Housing Innovation. California's programs are split up, which is unusual. Beyond that, 'what makes California so unique,' said Karlinksy, 'is the fact that the resources are spread across two different constitutional officers.' That fragmentation appears to be adding to the cost of construction in California. A Terner Center analysis this spring estimated that each additional public funding source delays a project by, on average, four months, and adds an additional $20,460 in costs per unit. Affordable housing construction is already distinctly expensive here. Building a publicly funded project in California costs more than 2.5 times more per square foot than in both Texas and Colorado, a recent report from the Rand Institute found. Will the new housing agency solve that problem? Not everyone is convinced. Of the many ways in which the scarcity of affordable housing affects most people, 'the lines on the org chart' don't crack the 'top 100 list,' Sen. Christopher Cabaldon, a Napa Democrat, said about the governor's proposal at a hearing in March. Cabaldon noted that executive reorganizations are a semi-regular feature of California governance. The Business, Consumer Services and Housing Agency is itself the product of a reorganization which spun off California's independent transportation agency. 'The dance of the secretaries we do constantly, always with grand ambitions,' said Cabaldon. 'Simply saying that it's going to cause more focus, that it will be streamlined, that it will cause leadership level action — but how?' As written, the new housing agency will consist of the current agency's housing-related entities along with a new Affordable Housing Finance Committee, which will be tasked with coordinating the housing subsidy programs currently under the governor's control. But the major funding sources managed by the treasurer's office will remain where they are. The California Constitution wouldn't have allowed Newsom to commandeer those functions from the independent treasurer even had he wanted to. That's a significant shortcoming, according to the Little Hoover Commission, the state government's independent oversight agency, which reviewed the governor's plan before it was passed along to the Legislature. In its final report, the commission recommended that the governor and treasurer strike a formal deal to 'create a unified application and review process' for all the affordable finance programs under their respective purviews. Neither the governor's office nor the office of state Treasurer Fiona Ma would say whether or how they are pursuing that goal. A single, unified application for every one of California's public affordable housing funding programs has been the bureaucratic holy grail of California affordable developers and policy wonks since at least the mid-1990s. Though the reorganization stops short of requiring that, it set up both constitutional offices to better coordinate in the future, said Matt Schwartz, president of the California Housing Partnership, a nonprofit that advocates for affordable housing. 'There's going to be a bit of diplomacy' between the two executive branches to work out a joint application, said Schwartz, who spoke to CalMatters earlier this year after the governor first introduced the proposal. 'That's the longer-term prize that many of us will be pushing to come out of this process.' Some affordable housing advocates have urged lawmakers to be cautious in mushing the various bureaucracies together. In a letter to four powerful Democratic legislators, the California Housing Consortium stressed that the application systems administered by the treasurer's office already 'function extremely well.' That process 'is not broken and doesn't need fixing,' said Pearl, the consortium's director. Before monkeying with it, he said, 'let's get the agency set up.' Pearl and the consortium also noted that past legislation has already mandated the creation of a working group to propose a consolidated application. The findings of that group are due on July 1, 2026. That's the same day the current BCSH is set to officially dissolve and the two new agencies will take its place. That's also just five months before statewide elections will be held to replace Newsom and Ma, giving voters a chance to decide who will shape the future of affordable housing policy in California. Christopher writes for CalMatters, where this article originally appeared.
Yahoo
16-05-2025
- Politics
- Yahoo
California wrestles with approach to homeless encampments
May 16 (UPI) -- California Gov. Gavin Newsom unveiled his model ordinance to address homeless encampments with dignity this week but advocates say the approach ignores real solutions. Newsom's ordinance "Addressing Encampments with Urgency and Dignity" calls on local jurisdictions to immediately begin removing homeless encampments, giving 48 hours notice when possible. Jay Wierenga, deputy secretary of communications for the California Business, Consumer Services and Housing Agency, told UPI the issue of addressing encampments is ultimately a local issue. "The governor's model ordinance is a template for them to address encampments with care, humanity and urgency," Wierenga said. "They can, and should, begin this work immediately. The governor's actions are reversing a crisis that is decades old, as the numbers show." Newsom and the state government have blunted the growth of the population of unhoused people who are completely without shelter, according to Jennifer Hanson, assistant deputy director of external affairs for Housing and Community Development. Unsheltered homelessness grew by 7% in the United States but only 0.45% in California. In the five years prior to Newsom being elected governor, unsheltered homelessness grew twice as fast, on average, than it has during Newsom's term, Hanson added. "This administration is the first to have made addressing homelessness a top priority and has provided local governments with unprecedented assistance to address it," Hanson told UPI in an email. "California is now reversing decades of inaction." The ordinance is backed, in part, by $3.3 billion in voter-approved Prop 1 funds. In the fall, the governor's office said the state invested $40 billion to create more housing and $27 billion to "help prevent and end homelessness." The California State Association of Counties pushed back on the claim that $27 billion has gone to address homelessness, Jeff Griffiths, president and Inyo County supervisor, told UPI. "Nearly half of that is for housing," Griffiths said. "It hasn't actually translated into units built on the ground that are sufficient enough to meet the scale of the problem." Griffiths agrees that county leaders would like to see encampments cleared but Newsom's ordinance lacks any assurance that there will be shelter or transitional or permanent housing for people. "The problem is clearing an encampment doesn't do anything if there's no place for those people to go," he said. "What we need are clearly delineated responsibilities of which level of government is responsible for which part of solving the homeless issue and then we need sustained funding." California currently allocates $1 billion annually toward counties to address homelessness. This sum is spread across the 58 counties in the state. Griffiths noted that this amount of funding is inadequate, and the short-term nature of providing funding annually makes it difficult for county governments to plan long-term solutions. CSAS has designed its own framework for addressing homelessness in California, the At Home plan. It calls for a clearer breakdown of the roles of different levels of government in addressing the issue, increasing and maintaining affordable housing units to meet a variety of needs and increased outreach programs and workforce to support those programs. The plan also calls for more social safety nets to prevent people from becoming homeless and the creation of programs and employment opportunities for people who are unhoused. "We will continue to work in good faith on all of the initiatives for having a comprehensive solution to homelessness," Griffiths said. "We believe the framework is there to make a significant impact on this problem. We just need to get buy-in and support from the state." Newsom's announcement of a model ordinance credits the U.S. Supreme Court's decision in the case Grants Pass, Ore., vs. Johnson for clarifying state and local governments' rights when addressing homeless encampments. Since that decision, more than 150 jurisdictions across more than 30 states have passed ordinances allowing them to punish people for camping on public property. Jesse Rabinowitz, communications and campaign director for the National Homelessness Law Center, told UPI the broad attempt to criminalize homelessness is backed by the Cicero Institute. The Cicero Institute is a conservative think tank that advocates for a complete ban on street camping. It also proposes that people not be allowed to sleep, camp or take long-term shelter on federal lands such as national parks. In March, President Donald Trump signed an executive order to remove all homeless encampments located in national parks in the District of Columbia. "California certainly has put money toward solutions to solve homelessness, like housing and support. It's not enough," Rabinowitz said. "This criminalization approach is going to dampen the effects of all the good work that service providers and activists on the ground have done in California." "If we want to solve homelessness in California, we need to focus exclusively on what works, which is housing services, and not waste resources and time by punishing people, by displacing people and by arresting people for sleeping outside when they have nowhere to go," he added.
UPI
16-05-2025
- Politics
- UPI
California wrestles with approach to homeless encampments
1 of 2 | A homeless man stays warm next to a fire during a rain break in the Skid Row section of Los Angeles on Feb. 25, 2023. File Photo by Jim Ruymen/UPI | License Photo May 16 (UPI) -- California Gov. Gavin Newsom unveiled his model ordinance to address homeless encampments with dignity this week but advocates say the approach ignores real solutions. Newsom's ordinance "Addressing Encampments with Urgency and Dignity" calls on local jurisdictions to immediately begin removing homeless encampments, giving 48 hours notice when possible. Jay Wierenga, deputy secretary of communications for the California Business, Consumer Services and Housing Agency, told UPI the issue of addressing encampments is ultimately a local issue. "The governor's model ordinance is a template for them to address encampments with care, humanity and urgency," Wierenga said. "They can, and should, begin this work immediately. The governor's actions are reversing a crisis that is decades old, as the numbers show." Newsom and the state government have blunted the growth of the population of unhoused people who are completely without shelter, according to Jennifer Hanson, assistant deputy director of external affairs for Housing and Community Development. Unsheltered homelessness grew by 7% in the United States but only 0.45% in California. In the five years prior to Newsom being elected governor, unsheltered homelessness grew twice as fast, on average, than it has during Newsom's term, Hanson added. "This administration is the first to have made addressing homelessness a top priority and has provided local governments with unprecedented assistance to address it," Hanson told UPI in an email. "California is now reversing decades of inaction." The ordinance is backed, in part, by $3.3 billion in voter-approved Prop 1 funds. In the fall, the governor's office said the state invested $40 billion to create more housing and $27 billion to "help prevent and end homelessness." The California State Association of Counties pushed back on the claim that $27 billion has gone to address homelessness, Jeff Griffiths, president and Inyo County supervisor, told UPI. "Nearly half of that is for housing," Griffiths said. "It hasn't actually translated into units built on the ground that are sufficient enough to meet the scale of the problem." Griffiths agrees that county leaders would like to see encampments cleared but Newsom's ordinance lacks any assurance that there will be shelter or transitional or permanent housing for people. "The problem is clearing an encampment doesn't do anything if there's no place for those people to go," he said. "What we need are clearly delineated responsibilities of which level of government is responsible for which part of solving the homeless issue and then we need sustained funding." California currently allocates $1 billion annually toward counties to address homelessness. This sum is spread across the 58 counties in the state. Griffiths noted that this amount of funding is inadequate, and the short-term nature of providing funding annually makes it difficult for county governments to plan long-term solutions. CSAS has designed its own framework for addressing homelessness in California, the At Home plan. It calls for a clearer breakdown of the roles of different levels of government in addressing the issue, increasing and maintaining affordable housing units to meet a variety of needs and increased outreach programs and workforce to support those programs. The plan also calls for more social safety nets to prevent people from becoming homeless and the creation of programs and employment opportunities for people who are unhoused. "We will continue to work in good faith on all of the initiatives for having a comprehensive solution to homelessness," Griffiths said. "We believe the framework is there to make a significant impact on this problem. We just need to get buy-in and support from the state." Newsom's announcement of a model ordinance credits the U.S. Supreme Court's decision in the case Grants Pass, Ore., vs. Johnson for clarifying state and local governments' rights when addressing homeless encampments. Since that decision, more than 150 jurisdictions across more than 30 states have passed ordinances allowing them to punish people for camping on public property. Jesse Rabinowitz, communications and campaign director for the National Homelessness Law Center, told UPI the broad attempt to criminalize homelessness is backed by the Cicero Institute. The Cicero Institute is a conservative think tank that advocates for a complete ban on street camping. It also proposes that people not be allowed to sleep, camp or take long-term shelter on federal lands such as national parks. In March, President Donald Trump signed an executive order to remove all homeless encampments located in national parks in the District of Columbia. "California certainly has put money toward solutions to solve homelessness, like housing and support. It's not enough," Rabinowitz said. "This criminalization approach is going to dampen the effects of all the good work that service providers and activists on the ground have done in California." "If we want to solve homelessness in California, we need to focus exclusively on what works, which is housing services, and not waste resources and time by punishing people, by displacing people and by arresting people for sleeping outside when they have nowhere to go," he added.
