Senate Budget and Fiscal Review Subcommittee No. 4 on State Administration and General Government
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Speaker 4
Good morning. Good microphone on. Great. Good morning chair and members. My name is Tamika Moss and I serve as the secretary of our business consumer services and housing agency.
Really excited to be with you all this morning to talk about the governor's reorganization plan and the trailer bill language proposals that we have coming up. So would love to just provide a quick overview and then introduce my colleagues who have joined me at the dais. So last year, we worked together to create two more effective and focused agencies, our California Housing and Homelessness Agency and the Business Consumer Services Agency. As of 07/05/2025, the reorganization plan became effective. Our trailer bills today codify the reorganization changes in statute to ensure that existing laws align with statute and build the changes actualized in what we all want to see happen with the reorganization plan.
So we would like to use this opportunity this morning to update you on our progress toward implementing all of our reorganization changes. I am joined by two of my amazing colleagues, our direct director of HCD, Gustavo Velasquez, and our director of CalHFA, Tony Serdich. And I'd invite them to say a few words.
Speaker 5
Good morning. Buenos dias, chairwoman Hurtado, committee members. I wanna echo the comments from secretary Moss, and thank you for the opportunity to present to this group, which has been instrumental in delivering the investments needed to address California's housing and homelessness crisis. Last year alone, ACD announced nearly $2,800,000,000 in funding despite the current economic conditions. Homekey, from rounds one through three, has delivered more than $4,000,000,000 in funds to open 16,000 new homes supporting up to a 175,000 Californians during the life cycle of the program.
Homekey plus, the new iteration, which is funded through proposition one, has awarded already $600,000,000 supporting an additional 1,800 homes serving veterans and on house individuals with significant health needs. More than a $100,000,000 to support recovery and rebuilding efforts after the Southern California LA fires and federal funded programs under which HCD has awarded $600,000,000 to nearly 300 projects. This is very important. These investments are critical. Thank you for supporting all of that.
But beyond investments, HCD has also helped turn policies into progress through housing accountability and enforcement. We are beginning to see the results of this work. In 2024, homelessness increased nationally by over 18%. California limited its overall increase to 3%, a rate lower than 40 other states. California saw the largest decrease in veteran homelessness nationwide in 2025, and yearly residential construction grew by nearly 60% from 2018 to 2024, and the time it takes to entitle new housing today has been cut in half.
These results are the product of sustained targeted and accountable investments in collaboration with local governments, local developers, service providers, and, of course, the state legislature. As the secretary mentioned, in July, will transition this further centralized our finance programs. One aspect of all of the reforms here in the state has left undone, this will reduce duplication, bureaucratic delays, something developers, advocates, experts has been asking for decades. I remember my time back at the Urban Institute, a national policy research think time where these reforms were being published, and we are here talking about these reforms right now, integrating competitive programs into one stop application center under this new committee is critical to providing certainty, predictability, and transparency that have not been fully addressed until now. And if I may without integrating the housing portion of the cap and invest program, the affordable housing and sustainable communities, this vision could not be fully realized.
The one stop, one application. We are here today in full support of that vision and I'll turn it over to my colleague Tony
Speaker 6
Thank you, director. Good morning, madam chair and committee members. My name is Tony Serdich. I'm the executive director of the California Housing Finance Agency. I'm very happy to be here alongside secretary Moss and director Velasquez to discuss our shared vision for how our departments can work together to better address California's housing crisis.
I've been working on housing policy and finance within our state government for more than two decades. For the past several years, much of my work has been focused on finding better ways to integrate the state's various housing funding programs. Assembly Bill five nineteen helped expand these consolidation efforts by creating cross sector working groups for sharing ideas to create more housing faster and at less cost. One of the main reasons I took this position at CalHFA was the opportunity to lead our organization into this era of increased collaboration with our state partners because the time is now to do this work. Progress has been made over the last several years, particularly with bill packages aimed at reducing construction barriers and costs as well as the approval of the governor's reorganization plan last year.
The housing finance and development executive committee members sitting here at the table each brings teams with varied program expertise, years of experience, and a dedication to ensuring a successful implementation. I'm excited to be here today to discuss the proposals to address ongoing barriers to housing production such as long timelines, duplicative and overlapping applications, and a lack of alignment between multiple programs in supporting the same project. I look forward to answering your questions.
Speaker 4
Thank you both. The transformation of the current agency BCSH is really working to shift our approach to consumer protection, business regulations, civil rights, housing, and homelessness. And chair Hurtado, I think you led with this. It is our responsibility as government to figure out how we can deliver our programs and services in the most effective way as that we can, And this is really our attempt to do so. It's more than just an organizational shift.
It's a strategic shift designed to improve how we as government provide better access to housing and civil rights protections, consumer protections to our communities and industries that we work with. And we are on track to meet our deadlines, which I'm super excited about. Since the reorganization became effective, our teams have been hard at work. We've established work groups to implement changes necessary for both agencies as well as the new housing development finance committee. We've partnered with gov ops, department of finance, and the state controller's office to stand up all the necessary fiscal and administrative infrastructure.
We've developed operational plans with the Department of Consumer Services, Consumer Affairs, and HCD to ensure that personnel and fiscal services have transferred smoothly. And one of the things I'm really proud of is the the robust engagement that we've done with our stakeholders, developers, local governments, our tribal partners, all folks who are integrated in the success of this effort have been at the table to help that these agencies will build the kind of system that works best for them. And we are actively recruiting our new staff that is going to be required for the new reorganization, so I'm excited about that. We've started that process in May. We hope to have those positions filled as soon as we can.
And then lastly, we are working toward establishing draft guidelines and a charter for the new committee for HDFC. The governor's budget proposal utilizes this new organizational structure to really streamline California's housing finance system so that projects can move from award to construction much faster than we're used to. Through HDFC, which I think is the innovation of this reorganization, we are implementing, as as director Velasquez talked about, long standing calls from legislators, from our housing partners, from many stakeholders about a more coordinated and streamlined housing fund funding system. Just to provide a little bit of context of what we experience now, in our current system, we know that every additional funding source adds about four months in additional time and $20,000 per unit when we have delays in our funding system. The HDFC executive committee, which are the three of us represented here, will ensure that the committee brings about the increased transparency, consistency, and predictability that is necessary for affordable housing finance programs.
We also talked a bit about the one stop shop. This will be really incorporated into the design of HDFC. All of the work that AB five nineteen working group has been leading in implementing a single application with a single review and award process, creating a more streamlined post award process, increased and more effective coordination with our partners on the asset management side of the house as well as compliance, and identifying new tools and ideas to continue to increase our programs efficiency and impact. This budget builds on the work that you all have been committed to for a really long time and that the administration has been putting forward for the last seven and a half years, and I'm really excited about its potential. And I know that there are a lot of questions about how we will realize the the transformational aspects of this plan, but I think this is really our first step.
So that concludes my remarks, chair. I'm happy to take any questions that you all might have for the three of us. We also have my colleagues, Christina Moon and Megan Kirkaby, who can provide more details, on our trailer bills when that time is right.
Speaker 1
Thank you secretary Moss. Do we have any comments from the department of finance?
Speaker 2
Paul Steenhausen with the legislative analyst office we will have comments after the subcommittee hears the trailer bill proposals will comment then.
Speaker 1
Questions from committee members? Senator Smallwood Cuevas? Madam Secretary, do you have further presentation on the trailer bills?
Speaker 4
I didn't know if y'all wanted to interlude for this moment or if you are ready to hear from my colleagues.
Speaker 9
Okay. Thank you. Good afternoon, madam chair and members. My name is Christina Moon, deputy secretary of housing finance with BCSH. I'm here to speak about our proposal which as the secretary mentioned really builds upon all the work that we've done in the reorg and takes advantage of this moment of opportunity with federal changes to the tax credit system to really bring more capacity and streamlining to our finance system.
Speaker 9
So I'll I'll get into this soon. This is just a little preview. But just some context to start why now we've created the infrastructure right in the reorg through the housing development and finance committee and there's increased bond capacity from a federal change to something that you may have heard called the 50% test changes that with the federal tax credit system now allow 25% of a project's total financing to be eligible for the 4% tax credit so this is a monumental change from 50 to 25% and really brings a lot more capacity to our bond system and so we're bringing those together in this proposal of opportunity before I go into our proposal I just want to take a moment to give some context of what it takes to put a housing project together you probably have heard a lot about how hard it is to build housing in California and we make it extra hard for affordable housing developers You know you have to compile a lot of different sources, each of those has different timelines, different requirements, and there's a sequencing that happens in the current system that really creates some friction and and kind of challenges that we're trying to address.
And as the secretary mentioned, each time we wait, it costs money and that will cost more subsidy. And so we're really trying to bring that efficiency back to when we invest our subsidy. This is just a look at what has to happen for affordable project to build their capital stack often they're coming for local subsidy they come in for state subsidy which could include programs like mhp from hcd or a sick or mip and then there's a step where they also bring in private activity bonds and tax credits to really fill out the whole capital stack so you need all of these different sources together to be able to get to construction. And as I mentioned, in the current system, have to go through a lot of sequential steps. So first, you might go to your local city government and ask for some early subsidy.
Then you might be ready enough to come to the state and ask for MHP. And then you might need a little more so you go to the ASIC program. And then when you have enough soft soft subsidy, then you'll apply for tax credits and bonds. And hopefully you'll get those. And that's each step of that is a competitive process.
And then when you run that gauntlet, hopefully you'll have all your funding secured. But, you know, this is a real challenge. Each of these steps, there could be a different timeline. There could be a place where you get stuck because you're appealing one before you ask for more money from another. And, you know, we have in our pipeline 89 projects, for example, you see that arrow, 89 projects that are waiting to apply for tax credits and bonds, and about half of those have already tried once before.
Right? So there is this kind of iteration that happens in the life of a project that we're trying to address. So we're already working on this right through the reorg we created HDFC HDFC is going to consolidate subsidy that each CD and cal hfa have for multifamily affordable housing but it doesn' yet include some extra steps so it doesn' t yet include a sick which is why it' part of our proposal and I' speak to that soon and it doesn' include the tax credits and bonds that are the real vehicle to get to final financing. That' what we' trying to address in our proposal and the real reason for that is right now all projects have to even after they get their subsidy again they have to go compete for tax credits and bonds and they have to compete with projects that don't need subsidy and maybe have a different set of priorities. We're really trying to align all of these systems together to be more streamlined.
And an example of an externality of what can happen is even though we have a lot of success that came out of accelerator, you may remember the accelerator program, we put in billions of dollars to really unlock stuck projects over the past few years. Invested HCD invested 3,700,000,000 to kind of take those stranded projects and move them to construction. That's because there was just a lot of scarcity in the system for tax credits and bonds that created that churn. And while this is successful because those projects made it to construction, it's really an inefficient way to spend subsidy when you could really be leveraging federal resources through the tax credit program. And so our proposal aligns everything under HDFC to create that true one stop shop.
We have a single application. It includes all the programs already under HDFC multifamily super nova mip but then it brings in a sick as well to really have that one stop shop for subsidy and then we're able to say if you have your subsidy award you will also have your bond and tax credit award. So we're able to pair those together to get to final funding in a one stop process. And more specifically the proposal will have out of the total volume cap for the state it sets aside 90% for housing and then out of that 90% half would stay with the lack to administer for projects that don't need subsidy and then the other half would go through HDFC to pair with its subsidy and so it really creates these two doors so that projects can move forward even if they don't need subsidy they can just go straight ahead to the treasurer's office and if they do need subsidy it's still a one stop for them and they can come to HDFC for that and you know this has come out of some a lot of the conversations we've had with our partners and stakeholders.
The AB five nineteen group has been really critical to provide input on this on on what can be really workable here for the partners that are doing the work. One thing I want to mention to anything that HDFC does not allocate with its subsidies say there are lean years where there are not many subsidy dollars to administer the unused allocation would just revert back to the treasurer's office and they would roll it into their next round or carry it forward. And a little more about the a sick program but before I do I just want to mention you know part of this has been how do we build the right team and transition the right staff and so our proposal also includes a net zero transfer of 14 positions from h c d over to HDFC so that team is ready to really implement some of these program transitions and and a really important part of this proposal changes to really modernize the a sick program you know we're we're maintaining the climate integration of this program all the priorities necessary to build sustainable communities but we're streamlining and modernizing it so that the administration really aligns with the one stop shop as well as the needs of the sustainable community side you may have heard from folks in the field this this program it's really important but it's also really complex you know there's a lot the projects have to do to be competitive for this program and you know the main things that we want to emphasize are that housing affordable housing being placed near jobs and transit it' a critical part of our state' climate strategy and this program will continue to do that.
What we are trying to do is you know, bifurcate the program so that 70% of the funding will go to housing so that it's really location efficient, you know, prioritizing location materials and methods, and really coming through that one stop shop. And then 30% would stay with the strategic growth council to invest in sustainable communities and again really need to have that subsidy together to implement the one stop shop and on the sustainable community side that will enable the more kind of regional corridor level scale that transportation pedestrian and bike improvements really need. And, you know, a lot of this will continue to be designed as we move into the next round. And we would really focus on getting community driven input here. And to that end, we've really maintained the program's goals of having 50% of expenditures benefiting disadvantaged communities that maintain is maintained in the program and we believe that actually integrating these funds into our one stop shop will really enable us to have communities better served overall by all of our housing programs in a more coordinated way.
That' all I have today thank you for the opportunity and we welcome your questions.
Speaker 1
Do we have any further testimony on the trailer bill okay going back department of finance any comments
Speaker 2
Thank you, madam chair. It's a little over a year ago. I met a I was talking with a long long standing affordable housing policy analyst and administrator and talking about how California has affordable housing programs scattered throughout its government. Some in Department of Housing Community Development, some affordable housing programs there, some within CalHFA. And then you have, through Strategic Growth Council, the affordable housing sustainable communities program.
And then you have, not even under the governor's purview, but under the state treasurer's office, really key affordable housing programs and which you'll be hearing from in in item two. And the this administrator was saying to me that if California could finally get the its affordable housing funding system to work like a system, he could finally retire. And so this is kind of what the what the state is after right now. What the governor with the reorganization plan from last year was trying to do, which the legislature of course approved last July. And then we see the governor's set of January proposals is really building on that effort from last year's reorg.
So overall, we see it as promising. You know, we see a lot of merit to what the administration is proposing to do. We do have some comments and recommendations. First, we do see merit with the administration's concept of automatically awarding private activity bonds and thus 4% federal tax credits to projects receiving an award from this housing development and finance committee, HDFC. We do have some concern with the proposal to set in statute a minimum of 50 that must be set aside for HDFC awarded projects each year and then only allow unclaimed private activity bonds to be used for other types of projects at the end of the year.
We see that as really unnecessary and it's it could result in funds being tied up for most of the year, which undercuts the state's priority of quickly deploying these these resources for developer projects. So we recommend the legislature consider one or two options. First, the idea is to approve concept of a set aside, but remove that 50% floor and just let the the administration with this treasurer's office staff determine an amount to set aside each year based on anticipated demand. But another option you could do instead is keep that proposed 50% set a set aside, but allow the unused funds to be reallocated earlier in the year and not wait until November or after when that money can be reallocated to other projects. In addition, though, we see it as a good start.
The governor's budget is in some ways incomplete and that it only addresses the 4% federal tax credits. It does not address what to do about the federal 9% tax credits, which also is a lot of funds, federal funds, nor does the administration address the state tax credits. And so the federal tax tax credits, those 9% tax credits generally provide more than double the equity for projects. And then when they're combined with the state credits, can be a very powerful tool to fund deeply affordable projects, affordable housing for the lowest income Californians. So we recommend the legislature direct HDFC and the treasurer's office to prioritize awarding those 9% federal tax credits and the state tax credits to HDFC funded projects that are that are targeting the lowest income residents.
So just finally on the affordable housing sustainable communities proposal, placing the affordable housing program at HDFC has the potential to further streamline that process, further create really more of a system of affordable housing in the state. But the legislature might wanna consider a couple modifications. First, by giving flexibility to developers that may want to continue to submit an integrated application. You know, developers might, in some cases, want to have an integrated application keeping out affordable housing with the transportation component together, we recommend the the administration provide some flexibility so that developers can do that and submit one application instead of two applications, which seems to kind of which otherwise would seem to undercut the whole goal of streamlining the process. Then And also, we recommend the administration report back at the end of the 2627 budget year on the demand for the affordable housing component versus the transportation component, that sustainable communities component.
And the legislature can use that information to decide whether the proposed split of 7030% really makes a lot of sense or or should it be adjusted. Thank you.
Speaker 1
Thank you. Questions from comments from committee members? We'll go with Senator Kabalin.
Speaker 11
Thank you, madam chair. Thanks secretary Moss and and our other administration colleagues. First, it's it's we obviously spent a lot of time on this issue last year as well, the reorganization in particular, and it's encouraging to see the progress that's happening. I did I have a question. I'm trying to make sense of the the trailer bills and the language reads it so that trailer bill describes the executive the HDFC d DFC executive committee as going into the committee on July 1, but all the trailer bill only refers to the executive committee in every other way.
Is there are these two distinct committees, or or is there is the executive committee the committee at this stage?
Speaker 9
I I think it might stem from right now, HDFC is an executive committee that is housed within BCSH, and then July 1, it becomes its own Department. Department, essentially.
Speaker 9
And that's when staff would be able to start. Right now, we are only able to have two positions, the ED and the general counsel, and those are under recruitment. So there's sort of this transition phase that's happening.
Speaker 11
Will we start just calling it one thing at that point and not this? It's just like we have so many housing. That's part of our existing problem. We don't need more boxes. But it also raises for me, and it raises this question last year both here and at Little Hoover, and it kind of highlighted a little bit by the APA issues and other things that are in here.
It's like, why are we doing this as a committee? I mean, it's an odd committee, so we all serve together on this one. But I don't work for senator Hurtado. We are both We are all peers in the senate, and she just happens to chair the committee. But on this committee, there's the secretary, at least on the org chart.
There's the secretary, and then reporting to the secretary is the HCD director. And then within the secretary's world, and I don't know if reporting to is the right word or not, is the CalHFA director. But it's I mean, it's not a it's not three peers just happening to sit together. Hey. Do you think?
What do you think? What do you think? It's it's what do you think, boss? So I'm trying to understand why are we organizing it this way and then having Bagley Keane and and APA and all these other stuff apply when it could just feed up the administrative ladder and have the secretary make the decision rather than the what seems a bit theatrical. But I'm I'm probably missing something.
Maybe you can enlighten us on why the committee structure is necessary here.
Speaker 4
No. It's a great question. A lot of what we heard around this entire process was creating transparency and input in the public sphere around how our housing funding programs are operating. So as we were working through the Little Hoover process and wanting to establish this HDFC committee as a way to have the formality of that transparency. So it would have public meetings, would have an executive committee, decisions around its funding and prioritization of calendars and resources would all be done in the public sphere just as we do at SIDLAC and TCAC, just as we do at other formalized committees that really encourage and have external participation.
So that is why it's not sort of an enclosed process within our agency. We wanted to make sure that there was active and transparent participation from stakeholders.
Speaker 11
I mean, for me, it's still an open question because I I mean, those those things then induce time time delays, costs, what have you as well. I I surround yesterday, we had the state allocation board meeting. We did the same thing for school facilities, and that's the same concept. And, you know, other than folks who are applicants, it's not it's not like the public is participating in any sort of, like, broad broad way. And there are a lot of other ways for stakeholders, for folks who are appealing a decision and what have you to get engaged.
So I I I'm no. This is not a I don't have a hard opinion here, but it seems like if if if because I'm gonna get to my very profound reservations about the ASIC piece in a moment, but but we're sort of you know, to every possible thing, saying streamline, streamline, streamline, let's go as fast as possible, as fast as possible, and then in this situation we're creating a structure that is not really is not designed to do that. It's designed for this public accountability, but is that really what's gonna happen in this space more than a secretary who was also accountable to the to the people as well? So, to me, it's just an open question. It's not a I don't have a hard objection, but I hope we continue to think about that, whether that structure is real also.
That if I go and testify at that one of the, you know, at an executive committee meeting, and I'm, you know, I'm directing my comments to the whole committee, but in my head I'm like, am I really only talking to the secretary who's making this decision? So, we should be real about these procedures that we create for public engagement so that they're authentic and not theatric. But I wanted to get to the AISC piece because I think we're partly in this situation where we're looking at AISC as how do we get this affordable housing program that seemed to find its way somewhere else? How do we bring it back into the family, which it never was in the family? Partly we're in this situation because there's no other money here.
We're doing a lot of good work here to try to streamline, to integrate all of that for programs that have no funding proposed for them. We have to do both of those things at the same time. I know there's broad agreement in the room about this, but as I get to ASIC in just a second, think that reason why this feels like it's a big deal is because we're not investing directly in MHP and and the other programs that we absolutely must be doing at a large scale. And so when we when we don't do that, when we zero the whole thing out, this is in the governor's budget, we don't do what's in the foundation for the future plan that the chair raised, then we're looking around, okay, what's left? Oh, there's this there's this what's not a huge amount of money in ASIC.
Let's let's capture that, and that that'll be the center of our entire streamlining and quote unquote modernization proposal. So, just just for context, not a question, but we have to fund these programs both in a bond and also in the budget. That's why the Senate plan is so important. I the other But, you know, I was here, I was around the world when ASIC was created, and it it was not an affordable housing program that happened to be in another budget. It was look.
We've we've we've we've done cap and trade. We've got GGRF, and affordable housing folks and others. And mayors like me at the time said, hey. You know, one way that we can we can achieve breakthroughs on on on transportation and land use based climate emissions, breakthroughs, like, we're we're gonna lead the world in this space, is through creating a program that integrates transportation, land use, and housing together, and recognizes the important contribution that housing has to play in concert with transportation and and other sustainability elements. And, that was a fight to win that.
And, it was a fight within the world of of sustainability and climate emissions. And, the climate and sustainability policy folks, you know, to their great credit were, you know, were were magnanimous. And, they recognized the reality and they said, okay. We agree and AISC was created. But, it wasn't an affordable housing program that just happened to have sustainability features.
And, it wasn't two programs that happened to be married together that now should be decomposed or probably more appropriately said disintegrated. It wasn't that was the core of that of of that program. And so when we talk about modernizing and streamlining, this is not one of those programs. I I still feel lucky that we have this money from the GGR fund. It feels a lot this proposal feels a lot like the administration's, you know, prior efforts to, you know, use the GGR funds for high speed rail, for a CAL FIRE.
Very important things. Also, not necessarily core to what the what the sustainability environmental and climate program is. And, I think we I'm I'm fully committed to both things. So, I am very worried about this proposal because it does seem like it's like this mindset that we have now, that this is our money. It always has been.
It's our right. We're entitled to it, and we wanna make this just an extension of MHP is not correct. And, we there has to be more attentions paid to it. So, that's appearing in a couple ways. So, one is the two pieces are not connected at all now in this proposal.
So, you know, the housing component, and I'm being charitable to use the component word because I don't see it that way, but the housing dollars would pretty much be purely based on location efficiency, which almost by most affordable housing projects are going to accomplish that. Yes, you say, well, we're modernizing. It's still gonna account for the goals of GHC reductions. That's mostly gonna be accomplished by most affordable housing developers saying, look, we happen to be, you know, in the right in a location a location efficient place that will make transit work or walking or whatever. Or it's just near jobs and and other housing.
But, that's not that's not breakthrough work. And then, there's a separate pot of money that that has has been in the s g g c space where the statute currently lays out, like, here's what it's for, like, in detail. And, they're it's mostly transportation investments and some ag land preservation. But, they're very specific investments. We The trailer bill proposes to erase all of that and just say, you know, it's for GHD rejections and planning and efforts and and activities, not the kind of capital investments in transit and bike biking and walking and other stuff that that is in the existing statute.
So, that's a substantial watering down of even a divided program, but there's also no linkage between them. So, the very first AISC project to come out of the ground, to break ground, was in my own community. And it was very tightly a a connection between the the streetcar line on the sustainability side if it if it had been split and the housing project together. It made no sense that you couldn't do them it made no sense to build a streetcar line if you weren't gonna build the housing. It made no sense to build the housing if you didn't have the transit connection.
They made each other work. And so when we when we say to it, now we're gonna split that decision up, two different agencies are gonna do it. They will never talk to each other in the projects, even if LAO gets its way, and we say, well, you can voluntarily submit an integrated proposal. We've lost the entire point of this program, which was to find at this nexus point and instead focus on location efficiency, which will heavily advantage, you know, San Francisco and open places where location is everything, but in places where actual investments have to be made in transportation and in transit and walking and biking at a serious scale to enable this at all, they're gonna be at a significant disadvantage. That's rural places, that's places that aren't in the center, Downtown LA, but other parts of LA.
And so, I'm very concerned about that aspect of this proposal. I understand the why, but I think part of the why is because we're not making enough of it. We should be spending a billion dollars on the core affordable housing programs. I think the other piece of it I would just add, and then I will stop, madam chair, and thanks for the indulgence here, is that these are infrastructure having again, having been a mayor, I know affordable housing project developers are very focused on their building, but bridge housing or whoever, they're they're not capable of of being able to integrate the full the full infrastructure plan that makes these communities work. It's it's not possible.
And so, IIG, the ASIC investments like this, they are not just about that project. They are the reason why these investments make sense is they reduce the infrastructure cost for other projects that are not on the applicant list. If we simply say we're gonna allocate we're gonna do a seven thirty and we're gonna allocate it on a location location efficiency basis, we're not gonna make those investments. And if we don't do those things, that's what's driving up the cost of impact fees and connection fees and everything else. We have to use these kind of dollars for investment investments that don't just advance a single project, but also reduce the the the cost burden the infrastructure cost burden on all projects that are in the in the in that district.
So, you know, I'm I'm very appreciative of the this the secretary and I have have talked about this offline as well. And I know she's committed to all these same things. So, you know, notionally, we're we're in the in the same direction. I I think there are there is a path there are paths here. But I just wanna you know, because because ASIC is is because it straddles two lines, I think sometimes we don't we don't we don't put the pieces together, and it's just such an important program.
It is, by definition, hard. That was the point. It's like, can folks come up with breakthroughs? And so, it's not supposed to be something that just every single project is has has a has a lane into. It's supposed to be folks that are gonna, like, be on the leading edge of innovation and infrastructure and transit.
So, I don't I don't think just hard is necessarily a bad thing. But, so and I'm very supportive of maximizing the streamlining and the connections, but but keeping keeping at the center the core purpose of the program, and particularly the communities that are that are otherwise left behind. So, thanks, madam chair, for the
Speaker 3
Herkby, Chief Deputy Director for HCD. I mean, I think obviously you have a lot of heart in this and I think we're probably aligned on a lot of the the things you're talking about in terms of the types of future we're trying to build but I think a few things that might be worth talking about are you know in in caring about those climate goals one of the things that's happening right now under the affordable housing sustainable communities program is you are building those partnerships between affordable housing as well as broader strategies and but one of the things that's most important to me about this HDFC proposal and really bringing you know seven full multifamily programs together with bonds and tax credits for an effectively simultaneous award is right now today, when we make an affordable housing sustainable communities award on the state side, we do not control our own destiny. So that project actually cannot move forward until it has its complete financing.
Speaker 3
that award we're building on trust right we're hoping that it goes and it gets its next piece of the pie that it can move forward towards readiness and it makes it extremely difficult for us to hold that already accountable for them the readiness milestones that they commit to because to a certain degree that their debt their destiny is wrapped up in their next funding award and the the only way we can truly be sure that we're awarding the best projects possible is to be looking at all the resources we have and be looking at all the projects at the same time and to be able to make complete financing awards that allow us to say that project now is is leaving our door fully financed and it is moving to readiness. And if it does not hit those readiness dollars, we as the state get our funding back. Does not meet its readiness deadlines, we get as the state get our funding back. And absolutely there should be pathways for those projects that are ready to do their active transportation investments at exactly the same time as they' trying to move forward on their housing side.
I think a lot of the affordable housing sustainable communities awardees that we see, are talking about different actors with different timelines. I think that accountability piece is also really important in the sustainable community sides of the equation as well, because you might be ready to move forward with part of the project or the the the bike lanes or to your point the the really critical pre development work that that helps make additional density possible in the infrastructure work, that might be at a totally different timeline and a different actor than the dense transit oriented development that's trying to move forward on the affordable housing side. Think this gives us a lot more control of our state dollars to ensure that we meet not only meet our GHG reduction goals that are envisioned through the affordable housing sustainable communities program but ensure that we're getting we're able to hold our awardees accountable for those climate goals in a much more concrete way. So
Speaker 3
If we fund a project and it's not able to move forward for years and years at a time, we're not getting any greenhouse gas reduction during that time. And, that's a lot of lost climate benefit to to the state.
Speaker 11
So, I I guess this is the fundamental disagreement I have, which is the notion that the housing by its its mere existence is is GGRF advancing. Its mere existence would no other and that's why the like like, striking out every single line about infrastructure investments and putting in plans and activities and and and if is the project meeting its g h go g h q's goals or not? Or or did it add did it add, you know, 82 units of parking the day after it opened. Right? And,
Speaker 3
I'm sure we could talk further about this as well, but I do want to make sure that I wasn't misunderstood on that point. In no way would the project be less greenhouse gas reducing by putting it through a one stop shop. What we're guaranteeing is that whatever we fund whether it's the sustainable community side or a on on the housing side that it's moving right away after award and that does not happen today because we' not completely we' not able to fund that project to its completion with that award so we sit in limbo so no matter how great that like even if you use exactly the same criteria we use today we don' get to start the moment that we pick that project with we have to wait for another constitutional office to make the same decision as us and say that they agree that that' the right project to fund. Under this we' saying we are controlling our destiny, so that great GHG project that we want to fund and we want to rank it to be the best GHG project in the world, we're saying we're giving you this award, now you need to go.
And we and and right now we can't do that. And similarly on any other complementary investments right now because of those the them being tied to each other they' on similar timelines and so that is a way to reduce our risk and get climate climate meet our climate goals faster So
Speaker 4
Senator, I also just wanna add. I sit on, SGC and have been a part of the awards for the last two cycles. And I don't disagree that this is not a housing program. I actually think that the combination of its intent is what makes it special and what makes it difficult for a lot of our applicants to move through the process. For example, we have not had tribal partners be able to actually access our ASIC program in the way that we want to because it requires so much complexity.
We are working at it, and we and I think that that is another goal of integrating these programs together so that we can actually make sure that all communities who need these kinds of resources get access to them, and that we are easing difficulty where we can, but not diluting impact where we can. And I think that is our ultimate goal. And the other thing you were talking about in terms of our urban communities, you are right, AISC advantages urban communities because it's often near transit, it's aligned with our climate goals, We want to make sure our rural communities are accessing AISC. We want to make and right now, that is not as easy for our rural communities to access these kinds of programs. And so when they're coming in securing funding in our subsidy programs and there's an opportunity for them to access AISC with all of its program requirements, we wanna make sure that that's a streamlined process.
Speaker 11
You did make, I think, three recent awards to rural communities in my district. Look, I get this, the rationale here. Challenge, and I'm actually more concerned than we started because the folks that take on that complexity, which that and that have a shot at it. If if if our entire mindset is everything is about how how fast and how certain it is, like, that's the only metric that we care about, or it's so overwhelming, then that's that's going to cause an affordable housing developer to to to say, you know what? We're we're we're proposing to meet our GHG targets by both location, and we're gonna make sure that the common cooking area has a notice about how to access van pools.
Because that's easy, and nobody at HDFC is gonna say, well, we're concerned you're not gonna be able to implement that. Another project that says, you know, we're gonna we're gonna close the gap in the in the bike lane network that connects this project to the major employment center, know, a mile and a half away, they will get they they they they're like, well, they but they don't control the bike lane and and the funding's not fully secured for the for the bike lane. And so, they will then not do as well in this process. That's what that's how this sounds is that that we are we are putting speed and certainty uber alles without without without really paying attention to the stuff that makes a difference in that that sustainability stuff, which is not is not the most if it were the cheapest and the most certain, we wouldn't be getting there anyway. So, look forward to continuing the conversation here.
I think this is a obviously, it's a big deal, and the governor's proposal is a big one. But I think that just to reinforce one more time, if the governor would come back and say, hey, we're funding these larger programs, this would not be so high stakes that ASIC was, like, the only money that we have.
Speaker 3
I appreciate that. I know we should move on but I cannot help but emphasize I don' think that' what we' trying to communicate. Absolutely you can put ghg as a priority here. Think nothing we' trying to say communicates that would be a diminished priority what we' asking is that across seven different programs that have lots of unique goals that we' asking those seven different programs to be able to look at where there's university where there is university out universality and to to not force the same development to go through the same process over and over again But, to maintain the spirit of each of those unique funding sources, those funding sources must go to meet the goals of those programs. We are only trying to make the goals of those program we are trying to meet those goals faster.
We are not trying to erase those goals. And so I I do wanna make sure that that's clear in the the goals we're trying to meet here.
Speaker 4
And just one last comment, senator. I really believe that this is the starting point. This is gonna be an iterative process. And in my mind, currently, we have housing and homelessness dollars across 16 different departments and agencies in the state of California. This is just beginning the process to say, we do the ones that we know are gonna be consequential to making sure the construction from award to construction moves faster and cheaper.
This does not mean that we don't want our HHS colleagues, we don't want our CDCR colleagues, all of the others who have much more resource frankly around the other places where this could be important. We want to build the table to invite those resources to be consolidated over time. So I just want to be very clear. This is not the endgame. This is just the beginning of the conversation.
Speaker 8
Senator Smallwood Quibbes. I really appreciated the discussion and the detail of it and the the perspectives. And and I guess my and I think we want to see consolidation I just want to say that I mean I think your last comment in the last we often say the problem we're spending the money we're putting it in the budget where the units why isn't it happening why is it so slow why does it feel like we just can't reach these goals and I think you just said very plainly what our problem is it's not always the cities and the counties it's also our problem of having silos and forcing folks to go through these silos which delay delay and cost cost money. I really appreciate that that last comment and I appreciate the work of this team of trying to put together a proposal that is, I wanna say, like a shotgun, though. We don't have a lot of time to see how this is gonna work.
Know? So, you know, this is the the the deep questioning and conversation is that we want this to work, but we already know we're starting late in the game. And so we're gonna have to see how this unfolds, and we're all gonna have to watch it closely. And we want I I want to see this move forward so that we can show it can be done, and hopefully this is signal to other agencies and other parts of our government to see the opportunity of of bringing tearing down these silos and and making it easier for everyone to do business with us. And I want to say that we are not disagreeing with what you're putting forward.
We agree it's fragmented. It's too slow. It's too expensive. It cost developers. But my question is a little more fundamental, which is the proposal creates a new structure to better move housing dollars but where is the housing dollars?
We have a budget that has no money allocated to affordable housing and no money allocated to homelessness. Can the administration explain how this restructure will result in more affordable housing units if the budget does not include significant new investment in affordable housing production?
Speaker 4
That is a fundamental question, senator. I I guess I would answer it in a couple ways. The first is when I agreed to come and do this job with the governor, it was really because I've spent more than two decades in community trying to figure out how do we address our homelessness and housing crisis now. And what the reason I said yes was because we actually need cabinet level leadership in infrastructure to make sure that housing and homelessness is not an optional policy investment, that no matter who sits in the seat of governor or in the seats of legislature, that it can change depending on their interest or or political interest. And so part of the design of what we're proposing is to to create that permanent infrastructure so that we can think about policy over a long period of time.
We can imagine what it would look like to actually fund and resource 2,500,000 homes over the last the next decade. We've spent years trying to figure out how to help streamline those processes locally, right? So that local communities can move their developments forward, and we are not impediments to that. We're now introducing opportunities to streamline our financing system. Right?
That then allows those local projects to come to us and get funded in one swoop so that they are not going to multiple doors. So I offer that the infrastructure that we are trying to build with the new committee, with the new agency, seeds the opportunity for resources when they come. We know that we are in a lean budget time, and that is not a permanent fix for California. We know resources ebb and flow, but I want our state departments, our teams to be ready for if it's a dollar or a billion dollars a year, we need to make sure we are responsive to taxpayers and how we are fund spending those resources. I don't wanna be able to tell my neighbor it's gonna take you five years to get into your temporary housing unit.
I wanna be able to say, call this number, figure out how to get connected with the assessment center, and there's a home waiting for you. And I think that's what this gives us the opportunity to do, and it costs money. So we are doing our internal advocacy. I have had this conversation with many of you that the administration has has maintained its prioritization around housing and homelessness, and we know that resources inform where your priorities are. And so we are in spirit and acknowledgment that those resources are critical, but we're not waiting for them to do the work that is our job to ready the system for efficiency.
Speaker 8
No. And I appreciate that answer, but I know that my constituents are gonna call and say, why would you support creating a structure that doesn't have any funding? And and those are the questions that we are gonna have to answer to. And that's why I have to continue to push that very fundamental question. And specifically, thinking about how we're streamlining affordable housing financing, I think, key.
It's so important. But will the administration support funding for hap for example the multifamily housing program cal home other core affordable housing programs also have not received sufficient recent funding. Otherwise, we have a proposal that we know we are setting up to be underfunded. Therefore, even with all of this great infrastructure work, with all the things you've done, we will be condemned for it not working. And so the proposal, you know, for me is, you know, how, you know, how can we stress the significance and the importance of making sure that there there is both the infrastructure but also the resources to make the infrastructure successful.
My final question is that the proposal includes a November timeline with some potential callback of reallocation of unused bond authority. My understanding is that after that point the remaining allocation could be opened up more broadly. Can you elaborate a little bit on how that process would work? Who would be eligible at that stage and how the administration would ensure the housing projects will have enough time to move forward. The proposal appears to have key actions by July 1 so I' a little confused by how the trailer bill will not be enacted until the close of that date.
So if you could just clarify that, that would be helpful for me.
Speaker 4
Sure. And I might have Christina give you some more detail on that. But I would be remiss not to say, you know, the but the governor did propose $500,000,000 for HAP in the January budget. We recognize that there are many jurisdictions across the state who are still spending rounds three and four of HAP. We are now proposing round seven.
So there are resources still. I don't I don't want to say that there were the tank is completely empty. I think your point your point is well taken that we need ongoing supports to really realize the potential of what we're trying to do together. And, I would also be remiss not to say that we are, you know, actively in partnership with our Human Services Agency in administering our Prop one resources. We have $2,600,000,000 of those resources still being allocated and implemented.
Our home key plus program is still active. So, we are we have a a new super or NOFA program through our MHP program. So we we are not at zero. So I just wanna be clear that your point is well taken that we need ongoing investment, but we also have resources still in community that need to benefit from a much more efficient and effective process. And then, Christina, if you could talk a little bit about the senator's other question.
Speaker 9
Sure. Thank you. The November date, we wanted to put in a deadline by which the bonds could still be used in the same year. And so if they are not used by HDFC, say there's lean years like we're experiencing or expecting to, we would revert those back to the pot. And so SIDLAC could administer them through their typical rounds in the way that they would for any project that doesn't need HDFC type subsidy.
That doesn't mean it has to be on October 31. Right? Like, that is a deadline. We wanted to put it in there, but recognize that that determination could happen much sooner, especially when as we get into a more regular cadence aligned calendars which is what we're working on in partnership with the treasurer's office. So we'll have more visibility into that need for pairing and then we'll be able to return it much sooner in the year.
And the action that would happen is that the executive committee at one of its public meetings would make that determination and notify the treasurer's office at CDLAC what is needed and what is being reverted back And then just to the July 1 date in the statute that really created or the the legislation that really created the reorg there was homework for the executive committee to do around recommendations for process improvements and aligned asset management that is all underway so there's no change to that and we are planning to convene the executive committee for the first time by June so that they can really review and adopt those recommendations so that they are kind of formally discussed.
Speaker 2
Just to add yeah. Just to add something. So right now in the proposed trailer bill language from January, it states that if funds of private activity bonds have not been claimed by these HDFC awarded projects by November of each year, if they haven't been claimed by November, then they can go to this general pool. And so what we're suggesting is either not say something about a 50% minimum amount every year or just move that date earlier. It could be, for example, October, August even by August if those monies haven't been allocated as HDFC funded projects, then they can go to the general pool.
Otherwise, you have developers waiting for this these private activity bonds for projects that haven't got an award, they're just waiting waiting when everyone knows that that money's not gonna be claimed in November.
Speaker 1
Thank you. I just have a few quick questions. One of them being under the proposal, you' looking to bring the housing programs together under the multi housing multi family housing program and if that happens what will become of the josepharma farm worker housing grant program as an example.
Speaker 3
That' great the legislature is a wonderful body that has given us many bills before us to lead us down the path toward this single door. The Joe Serna farm worker housing program is one of a number of programs that under prior legislation AB four thirty four was already part of this pilot of being able to blend programs together, identify those sort of places where they are similar and then where they have unique attributes. And so, when we refer to the multifamily super NOFA, the Joe Serna farm worker housing grant program is one of those. The multifamily piece runs through our multifamily super NOFA programs, again, so that it can be one application and actually helps us it really helps us actually fund better farmworker program projects that way because we're able to make the process so much easier and so that that that that already has been blended into our multifamily super nofa it would be all of all of the multifamily super nofa is being blended into this this full complement and complete financing so it will a huge benefit for that program because again it' have that certainty of receiving its state funding at the same time as its bonds and effectively simultaneously receiving its funds at the same time through the set aside but t cack and sidelak would still be doing the administration of those bonds and tax credits.
Speaker 1
My next question is do you see any potential impacts to the sustainable agricultural lands conservation program as part of the proposal?
Speaker 15
Morning. Is this on? Okay. Aaron Curtis, executive director at the strategic growth council. In regards to SALC, what is being proposed is maximum flexibility for the 30% sustainable allocation and SALC being included within that 30% and maximizing the flexibility for the strategic growth council to consider how much to allocate towards SALC on an annual basis based on priorities and availability.
Speaker 1
Thank you. I don' know if this next question will make any sense but as you were all talking and I just it came to my mind in terms of meeting ghd goals and when it comes to need to build more in California, my understanding is that homes have a certain lifespan. You build a home, a new home, and they could probably hold strong for about a hundred years, maybe a hundred and twenty years. It's also my understanding that California, the majority of homes in California were built prior to the 1970s 1980s is that something that you're also kind of thinking about as some of these homes many of these homes are becoming a lot older in terms of funding and yeah okay perfect sorry about that my mind is everywhere. It's actually
Speaker 9
it's super relevant because you know as we think about policy and program priorities preservation of housing is so critical to maintain our stock and also maintain affordability. And so what's happened in the scarcity of bonds and credits and other kind of fluctuations and available subsidy is that we really haven't been able to pay enough attention to preservation in the way that we need to and part of what we look forward to doing with the additional capacity in our system with bonds and credits is really go back to be able to do more of that and do it in a way that is very strategic at the portfolio level and so some of the work that under the reorg that we've been doing and thinking about is how do we collectively across agencies coordinate how we asset manage but how we kind of reap help reposition these portfolios of our partners so that they can be sustained and invested in the way that they need to so we don't lose any more units as we build new ones.
Speaker 1
Thank you really appreciate that response and you' thinking about it and I represent the Southern Central Valley I see many homes are falling apart some don' even have central heat and air some you know I know in my former home we relied on it we relied on the swamp cooler for a very long time and so that' Those are real stories people are facing across the Central Valley and other parts of California I assume. Our region is a bit warmer during the summer and when we talk about climate change and the impacts it' those communities also that are being left behind and it' something I' hoping we don' continue to do that as we' considering this proposal and others when it comes to funding because I think they' an important piece to housing and keeping not only just adding but maintaining what we already have as well. I appreciate your answers and I don' know if there' any additional one there' a follow-up.
Speaker 11
A follow-up on the chair' question with respect to the joe surner program as an example the the and this is on the trailer bill itself. So, the trailer bill includes new language. It's the intent of the legislature to designate the multifamily housing program as the state's primary omnibus affordable housing subsidy program to fundamentally simplify access to state housing resources, replacing today's patchwork of overlapping programs with a clear pathway to complete financing. The administration doesn't usually care that much about intent language in the world. So, are your intentions with this language?
Since it's not self executing by itself, it doesn't do anything. Is this a placeholder that some for something we should be expecting it may Or what what is the what is what is the meaning of this?
Speaker 9
I I can start, and then I invite my colleagues to join in. We are doing a lot of the work right now to really go deep on the regs and guidelines and say what and like Megan was saying what's universal across all our programs and what's bespoke for each program we have a lot of programs we're trying to do that across and we're trying to make that more legible so that our partners know what we're looking for and how they can be compliant. And so part of that is trying to signal that work and also that you know while we do that it would be great to keep it to that list of programs as we do. And so we really, you know, recognize MHP as one of those kind of more omnibus kind of flexible programs that really gets to a lot of the policy goals and is the base of what we're doing as we do that guideline work. But, you know, there's a lot more to come through HDFC of just making those programs more legible so folks understand what they're even signing up for when they're pulling from these different pots.
Speaker 11
It's not a signal that we should expect your proposal to to eliminate the shuttle service program?
Speaker 1
You. Last call for questions or comments on this item. Okay. Seeing none. Thank you so much for your presentation today.
We're gonna hold this item open, and we are going to move on to our next agenda item, item number two.
Speaker 1
And we're we're gonna establish a quorum in the process. If consultant can you please call the roll.
Speaker 16
president senator nilo for purpose of his dovassary warm yes senator nilo here senator cabalton here senator cabalton is present senator smolodkweis present senator smolodkweis present madam chair you have a quorum.
Speaker 1
Quorum established thank you so much. On to agenda item number two which involves a report from the California debt limit allocation committee and the California tax credit allocation committee who together award and manage a major part of California state financial support for affordable housing. We are grateful to be joined by representatives of this CDLAC and T CAC c m sure you have your own way of saying it to provide an update on what they' been up to you and including the response to the federal enactment of h r one as well as an opportunity to discuss the role of enhanced state low income housing tax credits and what impact it will have if they are not included in this year's budget. Thank you and please proceed.
Speaker 17
Great thank you good morning chair and members Marina Wyatt and the executive director of the California debt limit allocation committee sidlac and the California tax credit Allocation Committee, TCAC. Between those two committees, we allocate a significant amount of federal and state resources. At TCAC, we run the federal 49% tax credit program. The state back in 1986 or 1987 augmented our federal tax credit program to add the state low income housing tax credit program, which allows us to provide additional equity into each of the affordable housing projects that we finance each year. Just to give a little bit of context, the federal 9% tax credit provides more equity in each project, but that is limited by a formula from the federal government.
So each year based on per capita, we get a certain amount of resources to allocate. In 2025, we allocated a 115,000,000 of federal 9% latex. That seems like a very small number, but each project takes each investor takes that amount over ten years. So it's really by tenfold the amount of resources that we're leveraging of federal dollars. The 9% program, for that 115,000,000 we awarded 58 projects or nearly 3,000 units using that program.
HR one augmented the 9% tax credit program by 12% in perpetuity. What that means is for 20 by comparison, for 2026, we'll have a 136,000,000 in federal 9% latex available compared to that 115 that we had in 2025. But the scale is still so small and when you compare it to what we can do with the 4% tax credit program. The 4% program as was mentioned earlier is reliant on projects receiving federal financing from our tax exempt bond financing program. This is really just lower cost of debt for projects to take on.
Sometimes bonds get confused with general obligation bonds and other types of bonds. And so HR one, so prior to July 1, July 5, a project needed to finance at least half of its total cost using tax exempt bond financing provided by CDLAC in order to access the 4% tax credit program. After HR one was passed, this threshold which was referred to earlier was reduced to 25%. It was important to us as we've talked about the program has been highly competitive since 2020 with a large pipeline of projects that have been seeking bonds and not able to move forward. So it was important to us to implement that change as quickly as possible.
And we took emergency regulations in August, adopted August 5, so just one month after the federal legislation, to implement the 25% test and also encourage awardees that had received bonds that would be able to take advantage of that 25% test to return some of their bonds that they were allocated. As a result of that program, we had we were able to award a 195 projects, nearly over 25,000 units last year in the 4% program. That totals over 630,000,000 of federal 4% credit. So in comparison to the 9% program, we're talking five and a half times more units produced with the 4%. And that was a result of just sort of us implementing about half of a year's worth of increase volume.
In 2026, we are likely to do far more. So we in comparison to 2024, last year we awarded 10,000 more units, so that '25 thousand was 15,000 in 2024. And this year we expect to do yet another 10,000 by being able to use the 25% test over the entirety of the year. So it's a really significant change for the country, but also in particular for us in California. That being said, the 4% program provides a smaller amount of equity for each project.
Many of these projects rely on additional state subsidy or local subsidy in order to be able to access that the program. This is why between 2010 and 2020, the 4% or private activity bond program was undersubscribed because there was far less local resources and state resources to be able to pair with those projects. We talked a lot in this in the previous panel about sort of projects that are stuck in the pipeline. Many of those projects, as miss Kirkovy had talked about too, they come in, they get financing from the state, and they still need more subsidy. They either need it from if they get an AISC award, they need additional MHP funds, or they get resources from the supernova, and then are still reliant on either 9% tax credits to help fill that additional gap, or they need state tax credits to also help fill that gap.
And that's where a lot of those, you know, the 44 projects that were referenced that are still waiting to get through, many of them are still what they really need are not the not just the bonds and credits, but also need that the state credits or other additional subsidy. Last year with the change of the 50% test, we were able to fund every project, every new construction project that came in for an allocation that did not request state credits. Right? So the the the pinching point now that we have far more bonds available and therefore more tax 4% tax credits available comes down to the subsidy that's available. And I'll just finish with, you know, we in our program we use set asides and pools and geographic apportionments in both the four the 9% tax rate program and at SEBLAQ in order to lift up state priorities.
It's very common. In our 9% program, we use set asides to support rural projects. 20% of all 9% credits go to rural areas. We use it to support at risk projects, those are projects at risk of losing affordability, and we use them to for homeless priority projects in the 9%. On the 4% side, we similarly have instituted set asides for for the last five years in our scoring system to ensure that, again, we're we're lifting up projects that meet top priorities.
At SEDLAC, we have a home a set aside for homeless assistance projects. We have a set aside for projects that are serving extremely low income and very low income households, as well as a set aside for mixed income projects. So much of what was being discussed as part of the trailer bill is very consistent with the way we've been administering a program. We would just now just I'm jumping in and just answering some of questions that were in the agenda. The the proposal from the administration to create a set aside for HDFC is very consistent with many of the ways we've been running our programs historically period and that concludes my presentation but I'm happy to answer any questions
Speaker 1
do we have any comments from the department of finance Okay. Comments from the l a o?
Speaker 2
No. Other than just kudos to cidlack and t cac for moving so fast, you know, after h r one passed to be able to adopt regulations so that the state could take advantage of all this new federal money coming down.
Speaker 17
If I may I actually wanted to address your question about projects from at the end that was about rehabilitation projects. So mindful of sort of the focus on new construction the last few years we've had, we've really prioritized new construction at SEDLAC, but with the 25% test this year, we set aside 20% of all of our taxes and bonds that are for multifamily projects to support the acquisition and rehabilitation of existing affordable housing projects to to give a real path for those projects to be able to remain in the system.
Speaker 17
if It's it's if they're already affordable, we call it AC rehab, but it's it's a Okay. So,
Speaker 11
Yeah. Thanks. And and and I also wanted to just give huge kudos for the quick the quick response to the the federal tax credit legislation, which shall go unnamed, to to to take advantage of that in in in every way. And and also for they're still here, but for avoiding being taken over by HDFC and still being an independent entity. So but to the to the to point on with the state program, like, you give us a sense of, like, if for, like, the leverage is?
You know, the the administration has proposed nothing for the state tax credit program. If if if it were if it were funded at, you know, various levels, what is what is the leverage we're looking at particularly in light of the federal actions?
Speaker 17
It's hard to quantify exactly sort of what that pipeline exists. Last year, we had well over $1,000,000 of state credit requests. The year before that, 2,000,000 in state credit requests for projects. So, comparatively, I I I don't have a last year, we funded 43 projects with 4% tax credits plus the state enhanced light tax. So it helps move another 40 projects that need subsidy forward.
Speaker 17
It really ranges. So, some projects come in and they only need a small amount of gap. They will come they compete better the less gap that they need filled with the state credits. And so, it it really it really depends. We have some projects that come in and need 20,000,000 of the 500 that's available right and so that can use up those resources quickly
Speaker 1
have no additional questions from committee members at the moment Thank you so much for your presentation. That item was for information only. Now we' moving on to agenda item number moving on to agenda items three and four, which involve California civil rights department. Item three involves the impact of recent federal civil rights policy on enforcement of civil rights in California. And on your department in particular item four provides an opportunity for updates and oversight over the over three programs at CRD that run out of funding at the end of this fiscal year.
Before I ask you to proceed with that, want to note that CRD has a series of budget requests. I want to note that CRD also has a series of budget requests seeking resources to implement or continue enforcing civil rights legislation as well as a request to pay for increasing security at your public counters on our vote only agenda today. Thank you for being here and please proceed.
Speaker 18
Thank you chair thank you senators. I'm Kevin Kisch director of the civil rights department I'm joined today by our chief deputy director Jamie Gillette. The Civil Rights Department, as you know, enforces a wide range of civil rights protections in our state. We do that by investigating thousands of complaints filed with us each year, mediating and resolving as many of those disputes as we can, and litigating cases in court as a public prosecutor. We have a robust education and outreach program.
We have regulatory authority. We support the Civil Rights Council and the Commission on the State of Hait, and a number of other special projects. As you mentioned, chair, we have a number of BCPs on the vote only agenda part of the agenda. I won't be summarizing those, but happy to answer any questions that you all may have. Instead, I will move directly to the agenda item number three, and address, in broad terms, the question posed by the committee, are changes to the federal approach civil rights enforcement, and the impact of those changes on California.
I would say two major things. One is decreased, or stopped funding for a number of civil rights functions at the federal level. HUD offices have closed. The Community Relations Service of the Federal Department of Justice, which is the federal counterpart of our community conflict resolution unit, is shuttered. And, the federal government has withdrawn support from, for example, nonprofit fair housing organizations that help people in our communities understand their rights and and enforce them.
I'd also point to changes in legal interpretations and and enforcement focuses. So, this means that some claims are not being heard at all by our federal agencies like HUD and the EEOC, and it means that some claims are not being pursued by those agencies. So, what is the impact on California? I think there are impacts to every single Californian. We all have civil rights.
For our department, one major impact is caseloads. We have seen for many years the number of cases, complaints filed with us go up. What we've seen in the last year is something different. As I sat in this room at this time last year, we had 8,700 open matters. As I sit here today, we have more than 12,000.
So, we went over 10,000 open matters for the first time in our department's history since 1959 in the fall. We hit 11,000 at the end of last calendar year, and as I sit here today, it's over 12,000. That is an immediate direct impact that we are trying to manage in the best way we can. We have teams working overtime to process these complaints. The other impact on our department, I would say, is confusion and uncertainty in terms of our relationship with our federal partners.
We are processing all of these complaints without contracts that we have historically had with EEOC and with HUD for the past forty five years. And, we don't know. When it comes to the HUD contract, the state of California has sued HUD over terms that we find unacceptable in that proposed contract. We are negotiating with the EEOC. What this means for complainants is they don't know if their cases will be dual filed or not with the federal government.
And what it means for us is that we don't know if we will be reimbursed for processing these cases in the way that we historically have been, again, for the past forty five years. Those are the changes and impacts that I'll focus on. Happy to take questions on this agenda item now, or move on to the next one. Up to you all.
Speaker 1
We could move on to the next one and then we'll ask questions on both items.
Speaker 18
So, the next agenda item number four is for this committee to conduct some oversight onto three highlighted programs that are not slated to continue in the next budget. One program is California versus HATE. This is the first statewide hotline, non law enforcement, non emergency hotline for individuals and communities to report hate incidents to a government entity and crucially be connected with support. We have received more than 6,300 requests for assistance through this hotline in the three years that it has been running. And, it's a it's a program that we are proud to have launched and to have shown as a model of success for the nation.
The second program highlighted is the Community Conflict Resolution Unit. This is a unique statutory authority that our department has to provide confidential dispute resolution services to communities that are experiencing tension or unrest because of civil rights violations for free. This is not focused on legal rights and remedies for individuals. This is focused on helping communities live together in peace and prosperity. The requests for this particular program have also skyrocketed.
This is because, no doubt, the federal counterpart is shuttered. So, we have now conducted more than four twenty four community engagement sessions since the launch of the program three and a half years ago. And, in the first calendar year of the program, we had about 28 community meetings at the request of community members. And, in the last year of the program, we've had 154. So, the numbers, the requests for this type of service have gone up.
The third program is our enforcement BCP from four years ago, investigations and conciliation enhancement. This limited term funding allowed us to hire 12 limited term investigators with the goal of reducing wait times and increasing conciliations. We were able to do that as the agenda points out. This number of positions, I will say, has been somewhat overwhelmed by the increase in filings. As I sit here talking to you today, our wait time to interview somebody who files a complaint with us asking for our investigation is six months.
That is for us too long, but that's what the numbers are looking like today. So, those are my overviews of those programs. Happy to take questions from any of you about any of it.
Speaker 19
Isabel Fairclough, department of finance. Nothing to add but here to take questions.
Speaker 8
you for that update. I want to say there's no surprises there. Think when we started two years ago, eighteen months ago, we anticipated that this administration, which had signaled that attacking the civil rights infrastructure of this country was priority number one, that Californians would be hurting. And the question at the time, I think we were pushing for some investment in the ways that we invested in legal services for those who are being most brutally attacked on the streets of Los Angeles to have legal support we also felt our state civil rights agency and their partners in our counties and cities needed additional resources to deal with what we knew would be a flood of complaints. And if you're showing that these numbers are skyrocketing, those are the complaints we know about.
Right? So for every one complaint, they say there are a thousand discriminatory actions behind them. So that means our people are catching hell all over the place, whether it be in on the job, in the workplace, contracting, etcetera. So, you know, I'm not anything to be severely disappointed, but not anything to be surprised about. And so my question have a couple of questions on on both of these.
On in item, number three, just wanted to get a sense of you mentioned folks working overtime. If you could say more about what that means and then what steps has CRD taken in response to these federal changes? What additional departmental capacities shifting? What have you done to sort of address it to make it work given the the funding and then also in these actions? And then also, know, has it impact how does it impact the sort of elephant in the room, which we always talk about, which is our backlog?
If you could just talk a little bit more about that. And then my second question on that, local fair housing organizations, other nonprofit partners who have less capacity, and I'm hearing from them in my office about their challenges. In fact, city of LA civil rights office has, in this moment are fighting some pretty big cases because there is a anti civil rights tone that is emboldening very large employers as well as small employers to discriminate in massive ways and so the city is trying to consolidate its resources to deal with the big ones and so I'm curious where then are Californians being directed for help if the cities are trying to consolidate to deal with the big actors and we are trying to capture all the overflow. So those are my questions there. And then, of course, you know, I cannot understand how we would, at a time of this gross attack on civil rights and this overwhelming need in our community, be questioning whether we continue to have programs that help people report and resolve hate in California.
These are not abstract programs. These programs actually tackle the problem where it happens. If someone is experiencing discrimination there's a timely response. Hate incidents we are looking at the support services that are there we're trying to usher those services to people and making sure that we deal with any conflicts that may escalate. What is the alternative if we get rid of our programs that tackle hate directly?
What what would be an alternative to that given the scale of what what the department is already dealing with? So, you know, in closing, I will just say without continued funding, Californians will be asking CRD to do more with less, and the federal government is becoming more and more escalated and sophisticated in its forms of attack on civil rights, on people of color, on all of the protected classes that we hold dear. I just we can never do this administration's work for them. And, unfortunately, it's the fiscal challenges that we're facing that forces California to begin to do the work that this administration is doing, which is cutting communities off from the rights of their constitution of the civil rights act that protect them. And I do not wanna participate in that.
And I find it very hard to support any budget action that further threatens and enables threatens our citizens, our residents, but also enables this kind of racist targeted dismantling of the protections for our communities of color, for our vulnerable and protected classes. So I I just you know, there there are some questions embedded in there, but it's more of a statement. And, again, we're not surprised, but we also know that it' not over. So if we' anticipating now then when does project twenty twenty five phase two three and four because we' only five hundred days in. How do we how do we stem this tide at the civil rights department level?
Speaker 18
Thank you. A couple of responses, and I'll start with with the most concrete and direct, which is how do you make this work given the increase in filings? One thing that I wanna say on a broad level is a lot of what we see going on at the federal level is intended not just to remove federal protections that have existed for people for a long time, but also to make people frightened of coming forward at all. And so, there is a sense in which I am heartened by the fact that Californians are turning to our state government in increasing numbers. It means that some people, at least, have not been cowed or deterred, and they are looking for a place to go to resolve disputes arise in their lives.
Right? Everything that's happening in the world and in our country plays out in our workplaces, it plays out in our housing developments, it plays out in businesses and on the sidewalks, and a lot of people are not being cowed, and a lot of people are bringing their complaints forward more than we have ever seen. So in that sense, know, think we would all like to live in a world where none of these structures are necessary, but that's not the world that we live in, it's not the world that we will live in, and I am heartened by the fact that people are coming forward. I think it's also a testament to the work of our education and outreach unit in making sure that people understand that they can still come to California. One of the things that's happening at the federal level with the funding is that our local fair housing nonprofits are not permitted under new funding terms to do language access, language outreach.
We are in California, and we continue to do that. And so, that is another way in which we're stepping in to try to fill this void, or step into this breach. In terms of processing the complaints, we are doing continuous process reengineering, but our system is pretty nimble and pretty effective. We are a cloud based filing system. Of course, we accept complaints, however, they come to us by phone, by mail.
Most people file online. They are provided with an interview date. Our interview dates are connected in the cloud to our investigators' calendars. It is automated, and the first available dates come up. So, in terms of technology and process reengineering, there is not a lot more for us to do than what we have done over the past years.
We have done some new things in response to this surge in complaints. We have for a long time been triaging at the intake level cases that appear to involve situations that really require expediting. So, someone is caring for a sick or dying family member, and they have been denied leave. Someone who is facing an eviction where evidence suggests that the eviction might be retaliatory. We already have been going in and pulling out those cases and prioritizing them because of the time sensitivities involved.
We also now have a team of investigators, these are the ones who are doing this on overtime, who are triaging cases that we don't actually think are going to result in investigations. The complaint alleges a violation of wage and hour laws, or health and safety laws, or the complaint raises a dispute that doesn't appear to implicate the civil rights laws that we enforce. So, a landlord tenant dispute, for example, that doesn't implicate discrimination. We have people going in and actually pooling these cases and talking to folks, and closing out cases early that are unlikely to result in investigation if the person waits six months for an interview. So we'd rather tell these people today that they are not going to have an investigation of the Civil Rights Department, and then that in turn opens up more interview slots that those people's cases have vacated.
So, triaging on two levels. One, cases that we think at the intake phase, which you know it can always change, have strong evidence of priority, that there are time or severity considerations that mean that we pull them forward, and then also cases on the other end that are unlikely to result in complaints, and we're trying to move those out. The six months is with that triaging. Right? So, if we did not have teams working overtime to pull out cases early, it would be longer, given the volumes that we're seeing.
Where are Californians being directed? This is a really good question. Again, our education and outreach team has been doing really incredible work with community partners, and also with other state agencies to get people to the right place. To get people not just to the civil rights department, but to local, perhaps city or municipal organizations, or nonprofit organizations that can help them in what they have. This is kind of the point of California versus Hate Too when it comes to anti hate work, is getting people connected to the services that they identify as being useful to them, whether those are legal services, or housing assistance, or mental health counseling services, or whatever it is that they decide.
So, we view ourselves as playing this role of connecting people to the services. One of those services is the Civil Rights Department and our complaint investigation process, and our public prosecutorial role in our mediation division. But there are, as you know, hundreds and hundreds of services all around the state that we're trying to get people to. But I think that this is the crisis, right? This is, there are increasingly few places where people can turn, and so we are trying to be the place where they can come, and receive some meaningful engagement, some meaningful support, and when there are civil rights violations involved, some meaningful conflict resolution and public prosecutorial action.
Speaker 11
Yeah, thanks, madam chair. I just had a couple of, or maybe just one quick question following my colleagues' excellent exposition and exploration of some of the fundamentals that that that we're experiencing here. And I just just to go to California's versus Haiti specifically and picking up on the conversation that you were just having. So as I understand there there you in 2025, there were just under 4,000 contacts to the line. Is that
Speaker 18
In 2025, there were about a thousand reports of hate. There were more contacts of people contacting the line who did not report incident.
Speaker 18
but, yes, there was some number of contacts that is larger than the number of the thousand that that were hate incidents.
Speaker 11
And then three three thousand referrals to to law enforcement, department or or elsewhere? I don't have that number. Okay. I'm I'm right now I'm looking at the I was trying to figure out from the stock background, but then two one two one one l a provided more
Speaker 18
Oh, yes. Two one one l a might have provided more numbers than I have sitting here today. But
Speaker 11
yes. Okay. I mean, to your point about the triage elements, so that that's three times as many referrals that we're providing compared to the number of hate incidents that have been reported. And, you know, every agency that interfaces with the public, if if it's any good, you know, does its best to try to make sure everybody gets everything that they need. The of course, the trade off then is six months.
And so I'm are there like, what's the level of effort or resources or investment that's required for the the 2,000 non hate incident referrals to get it.
Speaker 18
I see. So, I think that Let me clarify that California versus hate is a hotline that is administered through contracts with the statewide two one one. That is a separate stream from complaints that are filed with our department requesting investigations of civil rights disputes. So when it comes to the California versus hate hotline, people are connected within three minutes when they call that hotline, and then they choose whether they want to be connected with a care coordinator. This is what they're called.
And then they work with that person. So that's really an immediate service. Typically, I will point out that the care coordination relationship on average lasts a month and a half, two months. It's not just one call, somebody reporting, it's repeated follow-up to ensure that the person is being actually connected with the services that they've identified as needing. So I'm not, I don't have the two one one information in front of me, but the three referrals per call, what that makes me think is that people are asking for multiple different types of of help.
Right? So somebody experiences racist flyering at a housing development, they might look for assistance in moving, They might look for some mental health counseling. They might be looking for some support for their kids. And so that would be referrals made through that process. Separate and apart from that is our CRD civil rights complaint filing process.
That's the six month timeline. So somebody says, I was discriminated at work on the basis of my disability. I want you to investigate, and we are getting to them six months from the time they make that filing. Does that clarify your question?
Speaker 11
It does. I think, and you noted the 3,000 referrals aren't 3,000 unique individuals necessarily. So, it could be the, I'm just using the two eleven numbers, could be the roughly 1,000 hate incident, hate cases, which then result in 3,000 referrals. Is it that or is it is it I mean, if there are if if the overall number is 4,000 contacts, are I I I guess the the question is, through the contracts, are we spending a couple months on the care coordination even for cases that aren't determined at the outset to be hate related?
Speaker 18
I see. I understand the question and I don't have the answer for you, but I can take a look at that. Okay.
Speaker 11
Yeah. I mean, I mean, we're just as we're I mean, it's clear that the referrals alone even to the department without adequate resources to to follow-up and investigate and do all that work is a is a you know, that's that's a false promise too. And so trying to I'm just trying to, like
Speaker 11
between, you know, fully funding the line or adding, you know, additional capacity in the department or just finding money for both or or or what have you. Think, know, part of our job is trying to figure out how to where if there's If we're able to secure more resources for this overall effort, along the lines of what my colleague was saying, where is our Where is that best spent in terms of getting actual resolution?
Speaker 18
I appreciate that question, and it gives me the opportunity to talk briefly about our mediation program, which is where a majority of the cases that come to us resolve when they resolve. This is a very successful program. We consistently see settlement rates over sixty, seventy percent each month. Historically, there have been times in the department's past when cases are kind of randomly sent to mediation. Right?
If we have 12,000 open matters, we can only refer maybe a thousand to mediation each year. We have 14 mediators in the state of California. That is no longer what we are doing. So, to Senator Smolwa Cuevas' question, and to yours, this is part of the triage. Right?
We're trying to identify those cases that involve the most serious civil rights violations. Cases with evidence of civil rights violations, not cases that have weak or little evidence of civil rights violations, to get them into that dispute resolution process, as opposed to a case that where, you know, clearly there's a dispute, but it might be a landlord tenant dispute without elements of discrimination. So, in addition to the triage of the investigation phase of the cases filed with us, we're also exercising this kind of executive function to move cases that raise weighty questions of discrimination and unfairness into dispute resolution. And then of course, at the end of all of this, there is the decision about which cases to move forward into court, into state or federal court as lawsuits.
Speaker 8
And I just wanna reiterate a point that you made, and I and it just reminded me. I'm I'm so grateful that our residents are taking advantage of the laws that we have to protect them but it is such a disservice if we don' have adequate investment and scale of response to meet that. We have to recognize that as the California versus hate conversation, the increase in folks accessing the agency, and we're still one of the most underfunded civil rights departments given the scale of the problem and particularly now in the midst of this federal assault. So, I just, you know, I I wanna say I'm I'm I'm glad to hear that Californians are exercising and utilizing our protections. But, at the same time, if it's not funded where we can actually respond, then is it it helping and so I just want to say I appreciate that point and I wanted to reiterate we' got to make sure we' funding to meet the scale of the problem.
Speaker 1
Thank you so much for your presentation today on items number three and four and those items were for information only we appreciate your time.
Speaker 1
we're moving on to agenda item number five. Agenda item number five concerns a trailer bill proposal from the housing and community development department that would give HCD authority to raise a variety of fees mostly related to mobile homes. I like to ask the representatives to be up here. It looks like they're all here now And present the item when when you're ready.
Speaker 21
Good afternoon, madam chair and members. My name is Kyle Krause. I'm the deputy director of HCD's division of codes and standards. Before I get into the details of the proposal, I would like to take a little bit of time to tell you a bit about HCD codes and standards, what we do, and the importance of our work. Many years ago, the legislature declared that manufactured housing both inside and outside of mobile home parks provides a safe and affordable housing option for many Californians.
And therefore, charged charged HCD was protecting these communities and residents. The division of codes and standards is responsible for enforcing a broad range of health and safety laws, regulations, and building standards across several program areas that are critically important to protect Californians. Codes and standards acts as a statewide enforcement agency, title and registration agency, code enforcement agency, and Consumer Protection Agency focused on ensuring minimum health and safety for mobile home parks, special occupancy parks, employee housing, factory built housing, manufactured housing, commercial modular, and special purpose commercial modular units. Codes and standards is also called upon by state and local agencies to support post disaster efforts related to mobile home units and park permits as well as registration and titling needs.
Speaker 21
HCD is mobile home parks and special occupancy parks programs enforce statewide health and safety standards for the hundreds of thousands of residents who live in these over 4,300 mobile home park communities under HCD enforcement responsibility. HCD performs mobile home park maintenance inspections including over 800 park wide inspections and reinspections and orders correction of approximately 10,000 health and safety violations every year. Identified violations are health and safety issues such as accumulation of rubbish, trash, and combustibles that can pose fire risk to the community. Additionally, HCD issues approximately 30,000 construction and alteration permit applications each year. And as a statewide building department for all manufactured homes, HCD protects public safety by ensuring that the structures are installed, altered, maintained to meet established health, safety, and habitability standards.
HCD's mobile home assistance center or the MAC as we call it provides direct assistance to the public in handling and coordinating the resolution of complaints. In 2025 the MAC processed over 3,600 complaints, 2,000 of which were mobile home park complaints 20 and handled over 9,000 phone calls in taking complaints providing customer resources and information. Many of these complaints and investigations result in HCD issuing notices of violation that require correction of health and safety violations. HCD secures homeownership and monitors manufactured housing sales. HCD maintains ownership documents for over 690,000 mobile homes, manufactured homes, and commercial modulars.
The program establishes or modifies titles of approximately 60,000 applications annually. Further, HCD promotes fair and accountable manufactured home practices by licensing 1,400 dealers and sales persons. Investigating complaints and conducting place of business inspections to protect consumers throughout the home buying process. Slide three. The employee housing program ensures that privately operated housing for five or more employees is constructed, maintained, and occupied in a manner that protects residents health, safety, and general welfare.
HCD helps ensure healthy, safe, and dignified living conditions for workers by permitting and conducting a thousand employee housing facility inspections each year. HCD also supports the production of safe affordable how homes by certifying and overseeing two hundred and thirty third party agencies and inspectors for manufactured and factory built housing, ensuring consistent monitoring and quality control to help lower housing costs and speed construction. Slide four. To do all of this important work, HCD's funding mechanisms need to be updated. HCD's codes and standards division is funded by fees for services.
However, the fee structure is outdated and many of the fees set in statute are no longer adequate to cover expenses as they have not been updated in decades. HCD is requesting authority to make reasonable and incremental increases to statutory and regulatory fees to meet the expenses of providing these services. I will now turn the microphone over to my colleague Matt Schuler to discuss the request and how we'll begin to address the projected deficit.
Speaker 22
Good afternoon, chair and members. My name is Matt Schuler. I'm the chief operating officer with Housing and Community Development. As my Kyle Kyle or as my colleague Kyle noted, codes and standard is projected to have a fiscal deficit due to the current fee structure no longer being adequate to cover expenses. Without fee increases, the fiscal deficit is approximately $3,200,000 starting in fiscal year two thousand nine hundred thirty, growing to $13,200,000 in the following year and increasing.
There is an average gap of approximately $6,000,000 per year between revenue and expenditures and that figure is projected to grow over time. The increase of fees proposed needs to begin in the budget year and only partially mitigate mitigates the fiscal deficit issue. The fiscal the fiscal condition of deficit would move out to the fiscal year twenty thirty thirty one. Without the statutory authority necessary to adjust fees, codes, and standards will need to reduce the level of services that are essential to properly monitor conditions in mobile home parks to ensure that they meet minimum health and safety standards, to investigate reports of unsafe conditions, and take enforcement action as needed to correct conditions. These services play a key role in maintaining manufactured housing as a safe and affordable housing option for many Californians.
This proposal would provide the following flexibility. The annual fee adjustments proposed will not be automatic. The HCD budget office and the codes and standards division will annually evaluate revenue and expenditures. HCD will only increase fees by CPI to provide adequate revenue to cover the cost of providing required services and to align with existing statutory guardrails limiting the collection of revenue. For fees set in statute, the proposal will allow HCD to make administrative fee adjustments consistent with consumer price index or CPI starting 07/01/2026 and each year thereafter.
CPI generally runs between 24%. For fees established in regulations, the proposal would 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 proposal would increase some smaller fees up to the next whole dollar. Currently, statutory and regulatory fees are fixed whole dollar amounts and cash is accepted for fee collection. CPI increases are small enough that they would prevent HCD from increasing smaller fees approximately $16.60 or less if CPI is at 3% if the fees are increased only to the nearest whole dollar.
Increasing fees up to the next dollar will allow HCD to make incremental increases to fees such as the $4 per lot park maintenance fee that has been remained unchanged since being established in 1990. These lower dollar fees are few in number and largely non recurring to homeowners. This would apply to seven of the 15 statutory fees that you saw on the prior slide, of which only the $4 per lot park fee is a recurring cost where 50% of the cost can be passed on to the homeowner. There are two other statutory fees under $17 paid by homeowners, but these are either one time or infrequent fees such as permanent foundation or the annual registration penalty. HCD has estimated the impact of CPI to increase annual recurring fees for an average size mobile home park in California, which is approximately 85 lots.
The increase in recurring fees to park owners is estimated to be $217.50 per year for the average size park. And the increase in recurring fees to homeowners is estimated to be an additional $1.50 to $2.50 per year depending on the size of the home. And again, this estimate includes the specific statutory annual mobile home park maintenance fee currently $4 a lot that can currently be passed in part from the mobile home park owner to the homeowner. Current statute provides that one half of that cost up to $2 per lot can be passed on to the homeowner. Other statutory fees affected by this proposal are generally not passed on to residents by mobile home park owners.
We do actually have a copy of that example that we would like to discuss during the question and answer section if it is helpful. But in closing, we realize that even though small, the proposed CPI increases will be impactful to mobile home park owners and mobile homeowners. This proposal was aimed at striking a balance, addressing urgent fiscal needs while keeping costs as low as possible to owners, allowing HCD to continue providing the vital services that Californians rely on and protecting manufactured housing as a stable, and affordable housing resource into the future. And with that concludes our presentation happy to take any questions.
Speaker 7
have comments from department of finance? Yes Blair Huxman department of finance. I would add that HCD's Codes and Standards Division provides the necessary services to monitor conditions in mobile home parks to ensure they meet minimum health and safety standards, investigate reports of unsafe conditions, and take enforcement action as needed to correct conditions. We finance reviewed the projected deficit and we concur this proposal is necessary to help address the funds structural deficiencies as many of the hcd statutory fees are no longer adequate to cover expenses.
Speaker 2
Thank you. We have several comments and issues for legislative consideration. On its face, the concept of pegging a fee increase to inflation seems reasonable, but some things for the legislature to be, you know, aware of. Proposed trailer bill language would authorize the department to round up to the nearest whole dollar. So, for example, under the administration's proposal, $4 mobile home park maintenance fee would increase to $5 next year, which is a 25% hike.
Certainly, greater than inflation. Also, as the agenda notes, it's not just one or two fees here. The proposal would give the department the power to increase dozens of fees each year, some recurring, others one time or more intermittent, but it could have this cumulative effect on park owners, mobile homeowners, mobile homeowners, manufacturers, and others. And then using that park maintenance inspection fee example, again, park owners could pass on some of that fee increase to the mobile home owners. So that's extra burden on the mobile home owners, many of whom are already struggling with affordability issues.
Also, just add that, as you just heard, these proposed fee increases would only partially solve these special fund projected special fund deficits. So the legislature will wanna know what other alternatives has the department thought of kind of longer term. Are there other proposals to increase fees? What about on the on the expenditure side? Are there any ideas to have maybe program efficiencies or other ways more creative ways to try to address these fiscal deficit projections thank you.
Speaker 8
Questions comments from committee members senator smallwood quebus. I appreciate LAO' comments and I' curious for the department of finance, do you have any response to this question of an alternative method or structure that could be used to fund the solve resolve the solvency issue, especially when rounding up is actually going to probably take us above the rate of inflation in a lot of cases. Just wondering what the Department of Finance has to say
Speaker 7
about that. Yes. Blair Huxtman, Department of Finance. So, the proposal before you today is the result of collaboration between the Department of Finance and HCD. The proposal is being presented with a few years' notice.
Without the proposal, we would project a deficit in twenty twenty nine-two thousand and thirty. An alternative would be to do a one time catch up fee increase based on the last time the fees were last updated which the administration did not pursue given the significant jump in fees from one year to the next. This proposal solves the near term issue while long term solutions can be considered or discussed.
Speaker 8
Has there been any evaluation because in my district we have the mobile home communities they are some of the most vulnerable communities in our city and our county and in the countries when you look at the overall income of the residents there. Has the administration evaluated what impact this increase in fees will have on those economically disadvantaged and vulnerable Californians?
Speaker 21
Yeah. Yeah. Thank you, senator. Obviously, HCD is very concerned about any impact to some of our most disadvantaged community members living in in some of the most affordable housing left in the state. So we have considered the overall impact and believe that the proposal that we're presenting is a step in the right direction to help balance the sensitivity of the impact with the need for increased revenue to meet operating expenses.
Speaker 8
The impact assessment? Because, you know, the cost of food has gone up. Cost of transportation gas has gone up. The cost of, you know, every utility, all of it has gone up. So what kind of impact assessment did you make to say that this is a hit that these residents can absorb essentially?
Speaker 22
What I would say is we wanted to make sure that we were looking at what we could do minimally in order to be able to change the financial condition. This only pushes it out one year in order to be able to continue to pursue other options right and and based on that goal of trying to get an additional year of relief we estimated the the annual impact for the average park owner and homeowner. And again, for an average 85 lot park, would be $217.50 in the first year of of an increase. And to the the average owner, it would be a dollar 50 to $2.50 for for that year. So so that's the assessment.
We didn't we didn't do an assessment relative to other costs that people have to pay because those situations are different for for different individuals. But we, again, really wanted to make sure that we were able to move the needle on the financial condition, but again, while being very respectful of trying to minimize that cost, downstream cost.
Speaker 8
And and for the LEO, and and I I it would say case by case basis, 217, it it could make the difference between I eat or I need gas in my car or whatever. Those those and I wanna say sometimes it's down to a few dollars and cents a month. That's that keeps, you know, a loaf of bread and some mayo might can take me, but if I don't have enough for that so I I just wanna say I I I I I do think, you know, I appreciate the the assessment being made but I I think that, you know, we have to know that the impact is that that's a relative term and and and and some folks can and many cannot weather that. I will just a question for the LEO. In terms of the risk, is acting too broadly I'm thinking here.
Is acting too broadly and the risk of not acting at all if the codes and standards accounts are projected to become insolvent. What where where I hear the alternatives, but what what is the recommendation here? Is it that we really need to go back to the drawing board and not go too broad with this? Or can we wait and not do anything right now?
Speaker 2
So I think the issue here for the legislature fundamentally is all the legislature has is trailer bill language. In in February, there was proposed trailer bill language to to increase these fees. That's all the legislature has. And there's no normally, you'd oftentimes, you'd see a budget change proposal, a document that would lay out the problem, how we got here, how the state got here, what are some alternatives that are that are there that the administration might have considered and and decided not to go forward with? But the legislature doesn't have any of that.
Just this trail of the language. And and there's no there's no fiscal analysis, fund analysis that was that would be part of a budget change proposal. So it's really hard for the legislature to know kind of this big picture with justice trail of the language to really understand, well, what about on the spending side? And how is how's that grown? Why has it grown?
How's that increased, you know, compared with inflation, for example, or caseload? The legislature just doesn't have that kind of key information. All it has is this proposal that, again, is hard to know what are the all the alternatives, that the legislature can really analytically look at.
Speaker 8
I appreciate that and I would also add there wasn' data on the impact assessment so I agree with that and appreciate the conversation but I think we have to be very careful about pushing folks over the brink. We know homelessness is a real thing in my county and we know these are communities that are so close to the brink you know, I think this is something we have to be very careful about and have all the information that we need to make the right decision.
Speaker 21
Senator Smallwood Cuevas, can I make a point of clarification? You mentioned that the impact of $217 per year was gonna impact residents I want to make sure that you understand that was our estimated impact to the park owners per year whereas the impact to the individual homeowners would be the dollar 50 to $2.50 range per year
Speaker 2
to clarify from my reading of the slides is we're just talking here about recurring fees, the $217. So are there other fees that are not recurring that are not part of that 217? And, again, you know, just this idea about are there and is that just kind of phase one of the fee increase? And might the department have to come back in a future year to this subcommittee perhaps to ask for additional authority to raise fee fees even more knowing that there's a deficit even with this fee increase in the in the proposed fee increase in the trail bill, trailer bill language. So, just a lot of questions the legislature really to to get a handle on it and understand the all the different pieces to it.
Speaker 11
Yeah. Thank thank you, madam chair. I appreciate the situation we're in. I'm trying to understand that you noted that there's a $6,000,000 gap between revenues and expenditures in this program but also that the projected deficit was going to go in one year from 3,000,000 to 13,000,000, which is a $10,000,000 gap. What is the cause of that?
Well,
Speaker 22
it's an average gap. So, right, we're projecting increased expenditures over time while revenue stays flat. So the gap grows from year to year, right, as you go further out to the right on the projection. Currently, right now, we are utilizing reserves and spending those reserves down, right in order and then it you know ultimately we arrive at a situation where we have a fiscal deficit and then that fiscal deficit increases so I refer to an average but you know that that changes right now what we're looking at is smaller differences between revenue and expenditures again that grow over time.
Speaker 11
$3,000,000 deficit is net of drawing from reserves? So the current actual deficit is larger than 3,000,000.
Speaker 22
Correct. So as we are in this fiscal year, we're anticipating total expenses of approximately 48,000,000 with just over 44 and a half million of revenue. So that's 3 and a half million dollars yet overall our our our fund balance, fund condition is still in a position to continue to support operations. As we get to fiscal year twenty nine-thirty, the difference is 8,300,000 and that's where we see that $3,100,000 deficit in two of the funds that make up the budget for division.
Speaker 22
Because we are projecting for inflation, right? Because we have increases to salary and wages. We have increases to benefits. We have increases to operating expense like the fuel and electricity that is used in order for the inspectors to go out in the field and conduct the inspections. And again, revenue stays flat, expenditures increase so that's why it's not just a specific dollar number for the gap that gap is projected to increase over time.
Speaker 11
So the I want to pick up on Elio's math but extended out a little bit so the to because of this rounding up figure and so, let's just say 2% is the number let's just say it's average of 2% inflation every year. And as you said in year one though, since we'd round up it'd be would be up to a dollar which is 25%. You play that out five years and actual inflation, if 2% is the right thing, would have been 10%. And the fee increases would have been 125%. That's a pretty substantial I chair the consumer protection committee here, and the if if if we saw that happening by by private actors, we we would be crying foul.
Like, you're that's a that, you know, we're cheating people by telling them, here's an inflation adjustment asterisk. We also round up and and it has this because the the dollar figures, the absolute absolute numbers are fairly small, that roundup has an enormous effect. And I think what you described for the department, is like, we're facing gas prices and other things, are those things going up at that level? I mean, department's expenditures for salaries and benefits and for gas, are those going up at 125% over five years or are those closer to the 10% over five years?
Speaker 22
No, it's more the latter. It's a lower number. Again, is a projection that gets adjusted to actuals over time. That was the point I was trying to make about the increases not necessarily being automatic, but rather right over time, we're going to analyze those right and adjust accordingly. And the real intent behind the increasing to the to to the next highest dollar is really to be able to affect change for those lower dollar fees.
So a $4 fee if we raise it 3%, that's 12¢. Right? And we don't want to be dealing with partial increments for for the fees, for those low dollar fees. So, again, the intent is for those fees that are currently under $17. Right?
Not the the fees that are larger where we would be able to effectively make the CPI increase.
Speaker 11
I was The CPI is rarely it it it is rarely negative, and it's rarely a 200%. So it it it seems like that this is not CPI is not the real mechanism here. It's just essentially we're gonna add a dollar to all these fees every year for eternity, or we'll authorize the department to do that forever. But CPI, it's like a it's just like that's that's just sideshow. Like, there it's not actually driving this in any way.
It's gonna be a dollar forever. Every single year, it'll be one more dollar and one more dollar and one more dollar. Am I getting that wrong? I'm like, why are we why are we talking about CPI in the fee if the rounding mechanism means it's always gonna be 1% or 5% or even if it's 10, it's still gonna be a dollar. So why why we why are we using a formula that doesn't have any relationship to what the actual fee is gonna be?
Speaker 22
I think it's really again to that point of we would be in essence unable to raise those smaller dollar fees if we didn't take that approach. It's clear that the intent and the language really maybe aren't lining up. I would say we would be open to discussing how we might be able to refine that in order to make that more clear so that everybody is aligned on ultimately the intent and the outcome.
Speaker 11
Yeah. It seems like the the two honest ways to do this would be either to for the proposal to be the trailer rail proposal would be we just wanna increase it a dollar every year infinitely. If if inflation is the mechanism that that there's an that the underlying inflation calculation calculation happens on the actual inflation. That's not rounded up. And so, you know, five years out, it would still be 5 that $4 fee would still be $5 because at that point, the the the underlying rate would have gone up by by to $44.41.
So, it would still be in that range. But, you'd be doing the calculation on the actuals as opposed to this rounding up ratchet. So, I'm not saying that we should do either one of those, but I would encourage the administration to pick a lane here. And, if it's inflation, then bring inflation Us proposal. That's gonna generate a lot less money because it will not result in a 125% increases or bring us, you know, an an honest proposal to we want a dollar every year.
And if that result even if that results in hundreds of percentage or that, then then tell us that. This proposal seems to trying to have it both ways, it's just CPI, but but it's not just CPI. And it's guaranteed to not just be CPI forever.
Speaker 24
Chair, if I may, Megan Toganaga, Block Department of Finance. Yes. Go ahead. Just to clarify that for fees that are above the 16 and change dollar threshold the CPI provisions would apply as you're describing it's for the lower dollar fees that this rounding up mechanism the concern that you're raising applies to and of the 24 different fees noted in the agenda, only eight of those fees are below that $16 and change threshold. So the bulk are following that normal CPI kind of pattern that you're referring to.
Speaker 8
Madam Chair, I have a very unscientific question, but you raised you raised something that made me think about this in terms of consumer protections. Is their provisions if the $217 or so is assessed you said to the park owner do they pass that cost on to okay
Speaker 21
senator I think that's possible the park owners can pass any increase in operating expenses
Speaker 8
and is there a language because you were sort of making the distinction earlier so I just want to be clear is there language to say that that cannot happen as these proposed increases that formulas that you're putting
Speaker 21
yeah there's only one guardrail on the fees that can be passed to the homeowners and it is that $4 per lot park maintenance fee. And the statute says that only one half of that $4 fee can be passed on to the residents. But in addition to the fees that the park owner can charge that the m p half of the m p m fee there may be other fees that impact operation of a park that can legally be passed on to tenants or those with tenancy in a mobile home park
Speaker 8
And and that's another, you know, we're tying it to inflation. And and this is just gonna keep go. I think we would need more guardrails to to understand, to lay out how these who is actually paying these fees, especially if we're saying, we' going to keep it to 1 point dollars 5 to protect the renters who we know are some of the most vulnerable and then we know we' creating another track that we know it will be passed right on to those renters. I I have I'm I have some challenge. So that's where there really isn't a distinction unless we put guardrails in.
And so I that's another concern that I have about this.
Speaker 11
And to pick up to take this point even further, I think I mean, the the you know, I have many, many, many parks and communities in my in my district. It it of all kinds, different kind of ownership structures. In a lot of community in a lot of of these communities, There there are big problems with the with the park owners, but also in in many others, the park owners themselves, you know, they're they're evaluating other you know, they're deciding should I stay in this business or not. So so, you know, even even layering on fees just on park owners and think that we've we've, you know, we'll stock it to them. Those fees do get passed on as as my colleague has been saying, but also we we need to be careful about the economics of these parks in the first place to make sure that we're not inadvertently saying, hey, okay, I'm gonna close my park down or I'm gonna sell it to some big, you know, private equity firm.
Like, we want to make sure that that we're accounting for the for the cost structure on both. Anyway, thanks, chair.
Speaker 26
The do you have a discrete unit that handles these responsibilities, or is it just handled by the department generally?
Speaker 21
Thank you, senator Nilo. Yes. There are several program areas that protect the consumers, protect park residents, ensure that complaints are investigated in a timely manner. We have a specific code enforcement unit that responds to complaints as required by law. And, otherwise, we have different program areas that touch mobile home park residents and park owners and operators from issuing permits to operate to the parks and and monitoring the conditions within those parks and taking enforcement action against bad actors that don't take care of their parks and put residents at risk from even resident violations that we investigate during our park maintenance inspections or complaint investigations.
So, it's broad approach with several program areas.
Speaker 21
I I think I can safely say we've seen increase in workload year over year in many program areas since the
Speaker 21
I don't know if I can answer that senator it's just we've seen that increased workload especially during the pandemic. We saw an increase in the number of alteration permits that were coming into our department, our division. Who knows why but the the numbers keep going up year over year.
Speaker 21
We've been able to add some new employee positions over the last ten years. I think in the neighborhood of 10 positions that we didn't seek additional funding for because they're largely paid for fee by fee for services especially in the employee housing area which increased 300% in that same time frame and those permit to operate fees and fees per employee that the operator pays to HCD covers that expense. But overall, we've seen just more and more workload. We've built in efficiencies to try to mitigate that workload by focus focusing on specialized program areas. I mentioned the code enforcement unit to help mitigate that.
Speaker 26
So, you've had an increase of you I think you said 10 positions in the last several years in this functional area. How many total positions do you have?
Speaker 21
Of those only 70 of those employees are inspectors that are out in the field statewide.
Speaker 26
So again in this functional area what is the percentage increase in your overall overhead?
Speaker 26
So in terms of In terms of money, what's the total overhead of this particular functional area and at what percentage has it been increasing in recent years?
Speaker 22
I I don't have that information off the top of my head. I have for the whole of the division for the all of the 235, employees, but, we'd have to get back with you with respect to what like the particular function looks like.
Speaker 26
How how could we assess the effectiveness of a fee increase to cover your costs if we don't know a fee increase, the ability to increase fees over time if we don't know at what percentage your overhead is increasing?
Speaker 22
Well, again, we're we're looking at that as the entire division. So, again, I I think I referenced, you know, the fact that, the cost of the division are approximately $50,000,000 a year. Again that's variable because we are including inflation in for the projection against revenues of approximately $44,500,000 a year.
Speaker 26
Perhaps that explains to LAO why the budget trailer language is just language without being specific. Don't have you're coming to us with a specific proposal to collect money from individual from citizens and businesses without any rational justification for it other than I think I need that. So, it's if if we don't know what your overhead is, particularly the amount to which it is increasing, it's very difficult for us to acquiesce to any methodology with regard to increasing the fees that are supposed to cover that, if you understand what I'm saying.
Speaker 22
I do. So so that projection does include an in, you know, an assumption of an increase over time. We used a 55% as the as the assumption for increased cost based on what we've seen on our prior experience. We did actually share the projection with staff, both the status quo and what the projection would look like, you know, should we implement this proposal and the effect that that would have, you know, on on the bottom line. So, you know, we have shared some information.
We're certainly open to sharing, you know, any additional information that would be necessary in order to be able to make, you know, a decision on the on this issue. So I I appreciate the question and I just again, we're open to sharing, you know, whatever information that that that we can.
Speaker 26
I would think that, those of us that would be approving, a methodology for a fee increase that is expected to cover the overhead of the department should include information regarding the overhead of the department. Just to clarify what I' getting at. With regard to the discussion as to the methodology proposed methodology of the fee increase to say you' increasing it based upon inflation and then have this dollar added thing to the people if I' paying that I' saying I' going to look at that as a visible sleight of hand. A sleight of hand is supposed to be invisible but you' making it visible but it' a sleight of hand because it' not really inflation. I think it's flawed approach.
Basically what it looks like is anything under $17 is you're just going to increase a dollar a year until you get it to $17. Who knows what the proposal will be. I think it creates suspicion among the people that pay it. One last point with regard to fees to individual homeowners versus fees to park owners. This is a good example of fees to businesses.
They do end up being translated into costs of their customers you cannot avoid that. You can say to a business you can' charge that to customers but you can't say to a business how much money they can make. It becomes fungible. So, there's just a point there with regard to any any economic impositions that we put upon businesses are very likely gonna end up in increased cost to customers. And the only thing that mitigates that is competition among businesses.
Speaker 1
You Mr. Vice Chair. In regards to my remarks I will say that I' probably in unique place here on the dais having long before I was a state senator representing state employees at hcd. It' been a while so you' bringing back memories codes and standards that' a division that' well within hcd very familiar with them and maybe some of those those employees are still there. And what I remember from that time is that it seemed like it it the employees were overworked and it seemed like there was just there's just a need for more employees.
There's just a huge workload issue at that time. I don't know if that's the case now, but I know I know that the the workers are doing what they can with under the, you know, the circumstances that that they're in. Having said that, I do feel that something is missing. Don't know what that is. It seems like there's a gap somewhere and it seems like that gap is very clear to us here on the dais.
And I will tell you that, at least in my senate district, there's a lot of frustration. There' a lot of fear and there' a lot of anger. They feel that the state is not doing enough for them. They feel that hcd as a department is not looking out for them. The department is failing them.
We as policymakers as elected officials were the front lines in a way when they' angry when they' frustrated when they need help we do what we can to try to help them out and it just seems like this is years of ongoing issues. And it just seems to me like this is just an area that completely needs to be overhauled right there needs to be a good part of it we need to make sure that that government works for people I know that' the feeling that' a sentiment within the mobile home park owners mobile homeowners they feel that government is not working for them and this is not in any kind of way trying to make you feel bad or point the finger at you this is this is just kind of putting their sentiments out here in the public and saying there we must do better. I want to share a little bit of what I' been hearing from down in the district from my staff from my constituents. It' s a bit raw and bear with me but they' said the inspectors at HCD that they send they do nothing. They say many mobile homeowners are dealing with various issues and can't hold the manufacturing companies accountable.
The mobile homeowners have to file small claims against the manufacturer. Mobile homeowners feel hcd inspectors said with the manufacturers and hcd does absolutely nothing for the owners. They' even said county and city fire inspectors and code enforcement are not allowed to inspect mobile homes technically only the state agency can yet they have a terrible response record. Again this is just what I' hearing and the feedback that I' getting down in my district. Based on the presentation you gave today the numbers seem to be a little bit off.
I'm struggling to understand the numbers. You have in your presentation you point to 4,300 mobile home parks statewide. 3,600 complaints. There' about 10,000 violations each year. I mean, I think that's a signal in itself.
Right? I mean, you have more violations in a year coming out of 3,600 complaints. I mean, do you do you can you explain that and and how how that has come about? And then also just if you don't mind answering, and when was the last time you had an audit? Because I I believe that the last time I think you've had an audit was maybe five years ago.
Is that is that accurate?
Speaker 1
Can you tell us about that audit then why there hasn' been one in recent time given all the challenges that you have been seeing and and have be have you addressed all of the concerns on that audit and the last audit?
Speaker 21
We did senator madam chair we addressed all the recommendations in the audit there was no specific findings of any kind of wrongdoing or anything like that they were recommendations and HCD implemented all of the recommendations largely procedural regarding things like you know tracking following up on complaint investigations within a certain time frame making sure that time sheets were prepared properly showing all the activities that were performed. I will say there's more than 4,300 parks in the state. Those are the ones that are under HCD's enforcement. There's also a little bit under 20% of the parks in the state under local enforcement. Those are cities and counties that have assumed enforcement responsibility from h c d because they want to have that local control over enforcement of the acts.
Speaker 1
Could you speak a little bit to the 3,600 complaints and the how that ended up with 10,000 violations?
Speaker 21
So complaints are only one lane of incoming. There's also mobile home park maintenance inspections, which is where we inspect 5% of the parks in the state every year, which is about a 185 parks per year. And in those investigations and park inspections, there' much more of those 10,000 violations are identified there as compared to those 3,600 complaints.
Speaker 1
Are they getting resolved? What are some of the outcomes? That was there need to improve in certain areas that you felt that there's perhaps more work that needs to be done on your guys' end?
Speaker 21
I think we're doing a fantastic job quite frankly madam chair and we are implementing the due process that's prescribed in the mobile home parks act specifically for park inspections.
Speaker 21
And it does require multiple reinspections. And if if violations are not corrected, whether they're homeowner violations or park violations, HCD has the authority to suspend permits to operate, and we do that when necessary. The ultimate tool is to refer a park that fails to correct violations to local land use agency usually it' the district attorney of the county for nuisance abatement action.
Speaker 1
Respectfully I would think that my constituents would disagree with you that it' doing fantastic and I think there' absolutely nothing wrong with having gaps but we have to be able to acknowledge those gaps because again this is about making sure the government works for people and in saying that everything' perfect when I' hearing completely otherwise again there' something that' missing I don' know what it is and I hope we can figure it out because I believe my constituents feel that this policy is catering to those that are hurting them the most. With that if there are no other questions from committee members or comments I appreciate your attendance here today and your presentation. Of course we will hold this item open. Moving on to agenda. Don't are we done already?
Oh my goodness. Okay. Alright. We have just want to thank again everyone for your presentations and again the conversations the questions that we ask it' to make sure that californians feel that government is working for them that's why we're here and we're asking questions because we got to be partners and allies in making sure that it does work for them. We appreciate presentations and the answers that were provided and of course we'll continue to have more conversations as we go.
At this moment we' begin with public comment. We' come to the end of discussion and this is on today' agenda. I' like to invite I'd now like to invite any members of the public who are present with us today to come forward for public comment. We will take public comment on all items on the agenda including our vote only. When it is your turn to speak please state your name, your affiliation.
And so we have time for everyone to speak, please please please try to limit your comments to one minute, And and we'll go ahead and start with comment number one.
Speaker 27
Good afternoon. My name is Jeff Morgan. I'm the president of CHISPA. We serve over 5,000 residents, low income families, farmworkers in Monterey County King City. I just want to support the measure for the four steps essentially for housing development finance committee.
I was here to testify a little under a year ago. I think there'll be a lot to work out in terms of of decoupling the HSC, but I think it can be done. And I think in the end this will save money and ultimately result in producing more affordable housing. And also, I would hope you would urge support to continue to increase the funding. We're hearing some word around air resources board.
I can say that was vital for the 40 units of affordable housing we're about to begin construction on in King City for for multifamily housing. So, you so much.
Speaker 28
Thank you, senators. My name is Donald Tamaki. I'm an attorney in San Francisco and former member of the California reparations task force. And, I'm here also with the Alliance for Reparations, Reconciliation, and Truth. As you recall, 05/25/2020, George Floyd was murdered, triggering the then largest protest in US history.
Four months later, the California reparate California legislature and the governor passed a b thirty one twenty one creating the task force. The purpose of the task force was to document the harm of slavery and its lingering effects, educate the public of our findings, recommending recommend to the legislature long overdue repairs. The final report makes over a 115 recommendations for reforms in education, in housing, health care, criminal justice, and other areas, and calls upon the legislature to determine a feasible approach spanning years in good economies and bad to address the harms that have been decades, if not centuries in the making. So, California should be proud that it has led the nation in shining a light on these buried harms. And thanks to the leadership of senator Weber Pearson, the California legislative black caucus, including senator Smallwood Cuevas, thank you, and the governor, the state continues to light the way by establishing the bureau for Descendants of American Slavery, providing the crucial continuity of a permanent state agency dedicated to advancing long overdue reparative initiatives.
That the Bureau is housed within the CRD, which has a storied track record and a legacy, is a testament to the commitment of the legislature to justice. Please provide the CRD and the bureau with the resources and support that the gravity of its purpose deserves. I thank you.
Speaker 29
Hi. My name is Linda George. I'm representing Paso Robles, California today. I live in a mobile home and I'm strongly I drove all the way from Paso to oppose this, proposal for fee increases. State agencies automatically increasing fee bypasses traditional legislative and public oversight is an abuse of power.
The department is trying to balance its budget on the backs of mobile home residents. We are the only group targeted for fee increases. The only. The bill will affect the affordability of mobile home living in California's most vulnerable populations. We are struggling to pay our increasing rents, utility bills, groceries, and insurance premiums.
How can we afford automatic, rounded up annual increases from HCD? Increases in our incomes are not calculated that way. Please, on behalf of California's more than 1,500,000 mobile home residents, please stop this bill. And I appreciate your great questions.
Speaker 30
Good afternoon madam chair committee members Mona Tawatau with the Equal Justice Society and the legal director of this nonprofit agency dedicated to racial justice. I'm speaking in support and of the Bureau of Descendants of American Slavery, that budget allocation under the CRD. Senator Smallwood Cuevas spoke earlier to the attacks on our most fundamental civil rights. Yesterday's Supreme Court decision being the latest example of those kinds of blows to our civil rights and our justice and democracy. And so cannot underscore enough how important this budget allocation is for this historic bureau.
Thank you.
Speaker 31
My name is Jody Johnson. I'm commenting on the proposed trailer HCD fee increase. I am a mobile home resident, and I am urging a no vote forever. When you are younger, a few extra dollars may feel like nothing. When you are a senior living on a fixed income, it can feel like the walls are closing in.
When fees go up automatically every year, we cannot just go out and earn more money. Subjecting seniors who live in mobile homes to automatic, unchecked, CPI based annual fee increases and then round them up, This is California at its worst. We simply cannot afford more fees. We deserve better. Vote no.
Speaker 32
My name is Marie, and I'm a mobile home resident in Sonoma County. I'm a state agency raising fees on Californians like me living on a fixed or modest income and then rounding up those fees automatically every year. My co pay for my health prescriptions just went up. Now the state is looking to balance its agency books out of our small pocketbooks. That's absurd.
This is exactly the opposite of what we need. I urge you to vote no and thank you for this opportunity.
Speaker 33
Hi. Maria Lerato with leadership council for justice and accountability on the a six split split. We urge the legislature to maintain the existing requirement of at least 50% for a six funding to be to disadvantaged communities for affordable housing as required to for as it removes the requirement under the trailer bill. If you move forward the a sick split of the programs, the into the two components, we urge you to require in statue how the program will be implemented to meet climate goals, direct 50% or more funding to disadvantaged communities, implement affordable housing in existing and rural community communities like the Central Valley, and clarify how both components will be connected for communities that want affordable housing and public transportation options. Lastly, whether the proposal moves forward or not, we have concerns with the program not receiving funding in the future due to the regulation of cap and trade, just the changes.
Thank you.
Speaker 34
Hello. My name is Anne Colachitas. I live in a mobile home, and I'm urging you to please vote no today. You know, these kind of fees increases, we don't have any way to our incomes our retirement incomes don't keep up with the the CPI and Roundup. You know, we don't have those benefits.
But everything else is going up incredibly. We have no way of knowing even what what the future is gonna bring. And when you're when you're a senior living on a fixed income, it can feel like the walls are closing in. Subjecting seniors who live in mobile home parks to automatic, unchecked, cumulative, CPI based annual fee increases, and then rounding them up. This is California at its worst.
We deserve better. Please vote no.
Speaker 35
Good afternoon chair and members. My name is Caroline McCormack and I'm here on behalf of the housing accelerator fund, a community development financial institution that has invested and financed over 3,500 affordable homes in California. I'm here to support item one the proposal to restructure the state's affordable housing funding system. When state funding is aligned and predictable local government CDFI is like half philanthropy and private lenders can do our job better we can underwrite with more confidence and move capital into projects more efficiently creatively and cost effectively and we can return that cost efficiency to projects to really unlock more affordable homes at the pace that we so desperately need here in California. So we encourage the state to move forward with this proposal with for and include clear predictable pathways for deeply affordable housing, supportive housing, rural housing, farm worker housing, veterans housing, and other high needs project types.
And I want to be clear, and this was echoed by the senators, that streamlining is important, but it's not a substitute for adequate affordable housing funding. And we need both a better system and reliable resources. But I think this is a great step forward, and I urge you to support it. Thank you.
Speaker 36
Good afternoon senators through the chair. My name is Doug Schuminger. I'm here representing the Turner Center for Housing Innovation at UC Berkeley. My colleagues have testified before you in the past. Some of the research the center has done in the past on the balkanization of our housing finance system has found that for every different source of funding that an affordable housing development has to go through, it delays the start of construction by four months, and typically costs an extra $20,000 per unit to be developed.
When the Senate and the legislature as a whole and the governor's office moved to create the California Housing and Homelessness Agency, part of the idea was to move California in the direction of other states to create a one stop shop, as you guys have legislated through AB five nineteen. And this trailer bill is obviously part of that. So once I think in a generation I've been in affordable housing and local government and development for over thirty years, This is the first time in my career that I've seen this opportunity to really make this happen where we really can bring these sources together. The trailer bill has a number of important items. The floor for the amount of money that goes into the allocation for rental housing is an important item.
As you know, when we put money into the affordable housing part of the bond program, it's one of the only pieces of the tax exempt bond program that brings with it additional tax credits from the federal government. I think the proposal to split the money between HDFC and the rest of the CDLAC component strikes a balance that many people have asked for in the stakeholder community in terms of looking for some money for local governments and developers to go directly to CDLAC, while others are looking for that one stop shop through HDFC. And, the trailer bill also, I think, provides, I think the senator Cavaldo was asking earlier, or others among you, sort of this this key issue of when the money gets returned back to the state, or back to the allocating committee to make that money available. And, I just wanna make sure that it's clear that that money, while it would be sitting there until whenever it is that you decide that it would go forward, that is typically, there is There are typically three rounds in the CDLAC process every year. So, it is not typical that the money is allocated at the beginning of the year to begin with.
I would note that as you go forward in thinking about this process. Regardless, I think the impact of these changes would be significant.
Speaker 36
Absolutely. The Turner Center found that 165 affordable housing projects were obligated to apply for funding via the multi step process in years past and this will be a significant advancement of her prior year's process. Thank you. Good
Speaker 37
afternoon senators. My name is Terry Bremer. I live in a senior mobile home park in Knapp County. And I'll be really quick. Allowing a state agency to raise fees on mobile homeowners who are seniors on fixed incomes, and then rounding up those fees automatically really adds insult to injury.
In all the talk today about affordable living, affordable housing, affordable this, remember our mobile home parks are the only unsubsidized senior housing that is affordable. And this whole fee increase rounding up business, I hope you will do the right thing. I hope you will vote no. Thank you very much.
Speaker 38
Good afternoon. My name is John Kyle, and I'm a mobile homeowner. And I strongly oppose the proposal for HCD to increase fees on us. We've never seen anything like this. Fees that get rounded up to the nearest dollar automatically every year.
Our social security benefits don't get rounded up like this. Many of us are seniors living on limited incomes. Our grocery bills are rising. Our utility bills are rising. And now you want to raise our fees automatically.
And then do so without any oversight or checks or balances. That sure seems like an abuse of power. Please vote no.
Speaker 23
Madam chair and members, good afternoon. Julie Snyder with the Metropolitan Transportation Commission and Association of Bay Area Governments, the parent agencies of the Bay Area Housing Finance Authority. First, we wanted to express our support for the administration's proposal to reserve tax credits and bonds for affordable housing applications that are also awarded other state funding. This is a longstanding best practice in other states, and we urge your adoption. Second, I wanted to highlight and ask from your colleagues that has not been raised yet today, which is a $32,000,000 request championed by senators Era Gin, Dorazo, and Weber Pearson to support the regional housing finance authorities that cover the Bay Area Los Angeles and San Diego almost half of the state.
The legislature established these regional authorities which include BAFA as a key partner in the housing ecosystem. We're close enough to the ground to identify and fill crucial gaps, but also large enough to achieve economies of scale. For the Bay Area, state funding would be matched one to one by our agency and philanthropy. It would allow us to maintain our first in the state search and apply regional website for affordable housing seekers. It would also allow us to launch a mixed income financing program that within four years would make our agency completely self sufficient so I wouldn't be back in front of you again.
This relatively small one time investment could also generate huge returns via ballot measures in the Bay Area in San Diego as early as 2028. So we thank you for your consideration and hope you have a good afternoon.
Speaker 12
Good afternoon, committee members. My name is Hannah. I'm a mobile home resident, and we vehemently oppose this fee increase. You are proposing fees that run as an automatic escalator. We don't have incomes that ride on escalators.
This is an unfair fee increase for the people who can least afford it. As you can see, most of the people that came here with me today, we don't really look like we have money because we don't. We need you to stand up for affordable housing, critical affordable housing, and vote against this. Please vote no. Thank you.
Speaker 39
My name is Jeffrey lake and I live in a mobile home in the Auntville. I' hearing strong opposition to the h e c's fee increase. Many of our residents are living on fixed and modest incomes and we are not wealthy and we're basically just trying to hold on to our homes and what we have. Home insurance is going up medical insurance is going up you know this everything's going up. And so any of this compounding impact of an autopilot rounding up will hurt us very much.
That may not be a lot of money to some but it' a lot of money to us. Urge you please vote no. Thank you.
Speaker 40
Afternoon I' Rhonda Hobbs I live in a mobile home park in Petaluma and I am on a fixed income. With struggling prices all over we need you to please vote no on the rn hcd trailer. I strongly ask that you vote no on that because of our rounding up fees every year thank you.
Speaker 41
My name is Malcolm Sibley I live in a mobile home. We have in front of us here an automatic fee increase rounded up to the nearest dollar with no oversight. This is a blank check. All all this talk about protecting affordable housing with this proposal, it seems to do the exact opposite. It will price us out of our homes.
As I said, one automatic round it up dollar at a time. Thank you for your no vote on the HCD trailer bill.
Speaker 14
Thank you. Good afternoon. My name is Cody van Felden. I'm from Sacramento County. I experienced homelessness as a teenager and again in my early adult years on and off for several years.
For me, services needed for youth, services I needed were not available. Adult shelters did not summit support my unique needs as a foster youth and caused additional trauma. Preventing homelessness for youth is a critical to stop generational homelessness. I've also been at risk of homelessness again in my later adult years with my young daughter. I'm grateful for the senate's current foundation for the future budget plan that is bringing the 2627 hap appropriation to 1,000,000,000 up from 500,000,000 in the governor's budget along with committing another 1,000,000,000 for 2728.
I'm here to ask the committee to establish an ongoing 80,000,000 youth funding guaranteed through the homeless housing assistance and prevention program. I'm also sharing on behalf of Isel Castellas, a student at UC Davis who had to leave for class. Thank you.
Speaker 10
Hello. My name is Arlen Serber, and I live in the mobile home park in Petaluma. I'm asking you to reject the HCD fee increase. We are already struggling to keep up with the cost of food, medicine, and basic necessities which are out of control. To propose a fee that automatically rounds up every year is out of touch with the reality we face.
This proposal treats us like a source of agency revenue. We are people trying to survive. Please vote no.
Speaker 42
Hello. My name is Jada Martin. I'm currently a fourth year student at UC Davis living in Yolo County. I'm also a former foster youth who has experienced homelessness on two occasions. The first time I was six years old, which led to my placement in foster care, I experienced homelessness again at 16.
For me, homelessness was not just the absence of shelter. It meant going without basic necessities, losing autonomy, and lacking a sense of safety and security. It disrupted my childhood and fundamentally shaped my experience of youth. Without access to affordable housing resources, young people like me are left without the stability needed to succeed in school, maintain employment, or build a future. Today I ask the committee to support an ongoing minimum funding guarantee of $80,000,000 to strengthen and expand homeless housing assistance and prevention program for youth experiencing homelessness.
Thank you for your consideration.
Speaker 43
My name is Deborah. I live in a mobile home and I oppose HCDs fee increase. You earn what you get. Nobody increases your paycheck automatically every year with no one checking. We can't afford this.
Please vote no.
Speaker 44
I'm Janice Kater Thompson. I'm a Petaluma City Council member and I have six mobile home parks in my districts and we have a total of seven. I oppose these fee increases because whatever fee increases happen or whatever you want to call it it's always passed on to the mobile home park residents. We know that because we' dealing with it for the last three years since I' been on the City Council we' dealing with mobile home parks were dealing with hedge funds purchasing them and they want a 17% return on their money They're doing it on the backs of our senior citizens. I'm asking you to vote no on this.
Go back to the drawing board. Figure out what would be fair. I'd be happy to participate in any committee on this. The other thing is if there is a housing bond mobile home parks need purchase needs to be part of the housing bond so they can either be purchased by cities or by the residents. Just really appreciate all the comments from the chair and our senators on this.
I think you really understand what is going on. And these are very vulnerable residents. And seniors are the largest homeless are becoming seniors. We really need to protect this housing. We appreciate all you do and please contact me anytime because I would love to participate to make this work.
Because I understand funding issues. We're all going through the same thing. But it is kind of hard to believe that the state of California is the sixth largest economy. Yet here we're sitting here talking about this. And that's what's really unfortunate.
Thank you.
Speaker 45
Good afternoon, chair and members. My name is Maribel Marine. I'm the executive director of two zero one LA. And every day we hear from Californians who are experiencing hate and don't know where to turn. A woman forced out of her home repeated harassment, a street vendor afraid to report, a senior targeted and left unsupported.
They're not alone. There was a recent study done this year that three point one billion Californians experienced hate last year, and thirty one percent said that they couldn't get help when they needed it. That is the gap that California versus hate was built to fill. California versus hate provides safe, confidential way for people to support, to report hate and connect with real support. Through a simple call or through the online form, individuals are connected to trained care coordinators across the state who help them access legal support, counseling, and trusted community services, and it's working.
In 2025 alone, nearly 4,000 people reached out for help. Over a thousand hate incidents were reported, and eighty five percent of those individuals who reported hate asked for ongoing care and support. This is not just reporting. This is recovery. This is trust being built in communities that have long been left out of the systems of care.
But today, that lifeline is at risk and without funding California versus hate will end on June 30. And with it, thousands of Californians will lose a safe place to turn. We've seen what we can do in three years. Imagine what we can do in six. We respectfully urge you to restore funding and keep this lifeline program in place.
And senator Cavaldon in response to your question about referrals, there typically is multiple referrals per call. And we give referrals to anyone who calls whether it's a hate incident or not. But most of our referrals are happening over a course of time as the care coordinators provide support over multiple weeks or months. Thank you so much.
Speaker 46
Yes. My name is David Barry and I'm a mobile home resident and I'm here to urge you to vote no on this fee increase. So we cannot afford it. We can't afford any fee increase. Now, how can you justify an automatic rounding up of fees on people living on fixed and modest incomes?
We're already stretched to the breaking point. Our bills are gas bills are up. Our water bills are up. It's not just an administrative tweak, not to us. It's a direct hit to our livelihoods.
We need relief, not more financial burdens from the state. Vote no. Thank you.
Speaker 47
Hello. I'm Diane Pimentel and I am a manufactured homeowner also known as mobile homes seldomly known as trailers. But I'm here to say please vote no on the trailer bill. Well, there's more than one trailer bill, so I guess there's multiple terms for trailer. But nonetheless, I do have a question.
Is there another example of a state agency raising fees and then rounding those fees up? It's a very unusual recommendation. And so, just, you've heard all the rest. So, please vote no. Thank you.
Speaker 48
Hi. My name is Susan Mills. I am here to ask you to vote no on the HCD fee increase. I live in a manufactured home too, and I am disabled and on a fixed income. When the state decides to round up or charge fees every year and adjust those fees to meet your numbers, it hurts real people, and I'm one of those.
It feels like we are being targeted because we are an easy target. We are asking you to be our voice and protect our communities from this overreach. Please vote no. Thank you. Good
Speaker 23
afternoon. My name is Jennifer Boyle. I live in a senior mobile home park. Today's very important, and I'm glad all of us could be here to talk to you about how we feel. I strongly oppose this autopilot fee increase.
When our expenses go up, we have to cut back. We don't just get to round up our income. Why should a state agency get to do this to us? We are not a piggy bank for the HCD. We are seniors and hardworking people.
We are on fixed budgets. Every dollar matters to us. It might mean a meal or prescription. Do the right thing please. Vote no.
Speaker 49
Good afternoon, madam chair, senators. My name is Sylvia. I am a new mobile home owner and I am asking you to stop the HCD's fee increase. I chose mobile home because it was supposed to be affordable. Now, state wants to nickel and dime me with fees that round up automatically.
Where does it end? I don't have the luxury of rounding up my bank account. Don't let a state agency balance its budget on the backs of seniors. Vote no, please. Thank you.
Speaker 50
Hello. My name is Lorraine, and I'm a mobile home owner and a resident, and this proposed fee is completely unacceptable. You cannot place, fee increases on autopilot without any guardrails and expect us to pay them quietly. We are facing rising costs at every corner, and, yeah, I'm you understand that. And this proposal lacks basic fairness and HCD accountability.
If you truly care about Californian, homeowners, you will reject this proposal and please vote no. Thank you.
Speaker 51
Hello chair and members of the committee. My name is Tran Nguyen with Family Resource Center and two one one San Joaquin. We provide care coordination services to victims of hate through the California versus hate hotline. The people we serve through California versus hate are traumatized by the experience of being targeted with hate and deserve a safe place to call and get help. For example, Sarah, who called to report that she was attacked because of her race.
She was struggling with mental health, firing a police report, victim system, and legal counseling. She worked with a care coordinator for fourteen weeks that connected her with the district attorney and the civil rights department. But before calling the hotline, she had nowhere to call for help. There are so many people like Sarah that need a place to call for trauma informed support and care coordination. I ask the committee to withdraw funding for reporting hate and supporting victims of hate of a hate acts in the civil right department budget.
Thank you.
Speaker 52
Kasia Hunt here with political solutions on behalf of two one one California. We also are here to ask the committee to restore funding for the California versus hate program. Through the network of two one one providers, people who have experienced acts of hate have a safe place to call, report the hate, and then be connected to any type of support they need. This support is unique because California versus hate care coordinators receive extensive cultural competency and trauma informed care training. So that they can be effective and to sensitively serve their members.
With two one one referral and service navigation expertise, they're able to assess comprehensive needs and connect them to appropriate resources and also to collaborate on cases with partner organizations. This program is a critical front door to restorative justice and victim supports for people who have experienced hate, and we ask that you restore the funding. Thank you.
Speaker 53
Hello. Yuval Berenstain here on behalf of the Anti Defamation League here in in strong support for the California versus hate hotline. We
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a century old anti hate organization, and we work closely with this organization to make sure that people understand what is the rise of hate that we are seeing and help respond to that hate. Please restore the funding. Thank you.
Speaker 55
Good afternoon share. Rebecca on behalf of American Farmland Trust in the California Climate and Ag Network speaking on item one while we are neutral on the proposal to move the affordable housing portion of a sick out of the purview of the sGC we are concerned that the sustainable Ag lands conservation or SALC program will become a victim of this transfer. Since the inception of ASIC, SALC has received an average of a 100,000,000 annually and consistently delivered strong returns. It is the third most cost effective greenhouse gas reduction program funded through GGRF and accounts for approximately 15% of total GGRF emissions reductions despite historically receiving only about 2% of total funding. SALC supports farmers of all types including multigenerational operations beginning and veteran farmers and tribal producers.
We urge the committee to ensure that SALT continues to receive at least 90,000,000 annually whether the affordable housing appropriation gets moved or not. Thank you.
Speaker 56
Chair, senators, my name is Tim Porteous. I am from Petaluma, California. I am in a mobile home. I am 68. I am disabled.
My rent and my mortgage are higher than what I get with Social Security every month. This is bad. I strongly oppose the HCD's plan to raise our fees and put them in an autopilot system. Many of our many of my neighbors and myself are elderly and terrified of losing their homes. A few dollars here now this is a million and a half people.
And there might seem insignificant to a state agency, but to us, it's devastating. We rely on you to protect us from the unfair policies that come at us from these kinds of things. We should not even be here today appealing, unbegging, hoping that this part of our government is going to hurt is not going to hurt us by supporting them, but we are here. Some of us hurt for it. Please vote no.
I don't know how I can tell you strong enough, but I thought I heard this fella say that there were 24 fees, and they want them up at $17. We're talking about one of them. Thank you.
Speaker 57
and senators. I'm Carol Khan, executive director of Project Sentinel. We're a fifty year old fair housing agency operating in the Bay Area, Sacramento, and the Central Valley. I'm here to support the budget request for CRD as well as senator wiener's budget request of 10,000,000 for fair housing. I want to highlight our vital partnership with CRD to fight housing discrimination in California.
Our trusted advocacy at the local level is critical. Collectively, our agencies investigate discrimination complaints, gather evidence through testing, and refer cases to the CRD for fair housing enforcement. I'm also here representing 13 fair housing agencies statewide who have experienced enormous impediments because of recent changes in federal policy. My colleagues will echo their support because without state funding, discrimination complaints under California law will go uninvestigated and critical fair housing outreach and education will be lost, Especially for non English speakers, immigrants, the LGBT community, housing voucher holders, and vulnerable communities at heightened risk of homelessness. Thank you.
Speaker 58
Hello. I'm Carolyn Petey with Fair Housing Advocates of Northern California and San Rafael. My colleague Carol spoke of our critical partnership with CRD. They offer strong mediation and support enforcement while local fair housing agencies like ours conduct investigations that discrimination complaints that so CRD is not overrun. Despite our state's strong fair housing laws, there's no state funding for for our fair housing.
Within the past year, the federal government has canceled our contracts, delayed our funding, and most recently forbidden us from conducting any work enforcing California's expanded fair housing laws. So that means no fair housing counseling or enforcement for LGBTQ plus folks, immigrants, or housing choice voucher holders. HUD also prohibits us from doing any work related to disparate impact, systemic investigations, or appraisal discrimination, and redlining investigations. The fair housing infrastructure that across the straight state in the country is is crumbling. Senator Weiner's budget request for $10,000,000 is coming in just in time, so I I hope you will support both CRD and the senators ask.
Thank you very much for your time.
Speaker 59
Hello. I'm the Lisa Perez with California rural legal assistance. We serve communities across the state from the border to the Central Valley, Central Coast, Northern California, and the Imperial Valley. Many who are among the most vulnerable farm workers indigenous populations lgbtq individuals seniors veterans on house individuals and families relying on section eight these are folks that do not trust the government they trust their local fair housing centers our ability to provide for housing services is limited by huts restrictions that prevent us from offering materials in languages other than english This creates real barriers for the communities we serve, especially when they face discrimination based on language, immigration status, or source of income. Just as critical is our ability to conduct fair housing testing, one of the most effective tools to investigate and identify improved housing discrimination.
Over 8,000 complaints were filed in 2024. That's the highest in the nation. Those most impacted are the communities we serve, and they're at the greatest risk of housing stability and homelessness. I respectfully ask for your support of both CRDs for housing work and senator Scott Wiener's budget request. Thank you.
Speaker 60
Good afternoon. Prevention saves costs and stabilizes communities. I am Janice Roots with the Fair Housing Council of Riverside County. I would like to underscore how important the fair housing investigations and testing that organizations like ours provide. It's a cost effective prevention strategy.
There are 13 fair housing councils across the state that provide testing, investigation, education, and dispute resolution that stops discrimination early, stabilizes tendencies, and prevents eviction. The evidence we provide through fair housing testing is often the only way to prove discrimination has occurred. This work directly supports the state's goals by reducing displacement and easing pressure on California's already stressed infrastructure for the unhoused. Every prevented eviction or resolved housing discrimination case represents both a human and fiscal win. General estimates show that each dollar of funding provided yields 2 to $5 in outcomes that otherwise would cost the state in homelessness and related services.
I hope you'll support both CRD's fair housing work and senator wiener's $10,000,000 budget request. Thank you.
Speaker 61
is Gwen Sorna Mesqua. I'm a housing attorney at Bay Area Legal Aid. I'm also a fair housing project coordinator at bay area legal aid in our Napa office we're here to support CRDs budget and senator wiener's budget ask of $10,000,000 this will allow us to advocate for our clients organizations that support fair housing efforts including Bay Area legal aid are all potentially facing severe financial challenges due to the delays in federal funding these disruptions can lead to the staff layoffs and can be raised serious concerns about the ability to meet upcoming payroll obligations. Without timely and reliable funding the capacity of these fair housing organizations to serve communities is at risk. California is making historic investments to expand housing and address homelessness, but without sustained funding for fair housing enforcement, those investments are undermined.
Discrimination continues to block access and push people out of housing. At a time of federal uncertainty, it is crucial that the state fully integrate fair housing into into its strategy. This is how we ensure equity. This is how we ensure maximizing impact, and how we make house the housing system work for everyone. Thank you, and please support Fair Housing.
Speaker 62
Good afternoon. My name is Audrey Perreault. I'm a resident of Stockton, and I'm also the co executive director of Fair Housing Advocates of Northern California. I too support senior senator Weiner's request for $10,000,000 for Fair Housing and the CRD budget. I have brought with
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today testimonials from clients as well as the organizations that we represent with this funding request, and I hope that you will support Fair Housing. Thank you.
Speaker 63
I'm a fair housing coordinator with Project Sentinel. I live in Woodland, California, and I personally serve both the Greater Sacramento region and Yolo County. Fair housing work is essential to keeping people house protected and stable. When fair housing is underfunded discrimination goes unchecked and housing stability becomes a privilege not a right. I support senator Weiner's budget proposal and urge you to continue investing in fair housing.
Thank you.
Speaker 64
Good afternoon I'm Savannah wheeler I'm a resident of San Francisco and an attorney with fair housing advocates of northern California. I to support senator wiener's request for fair housing funding It will allow us to help clients like mine who is fleeing domestic violence and denied housing due to using emergency rental assistance and she experienced homelessness as a result. We won't be able to help many clients like her if we have to continue to rely on federal funding. Thank you.
Speaker 19
Good afternoon. My name is Joanna Navarro, and I'm a fair housing attorney with project sentinel and a Sacramento resident. I fully support project I fully support senator Weiner's budget proposal, and I respectfully request your support for fair housing. Thank you.
Speaker 65
afternoon. My name is Bryant Williams. I'm the executive director for the Fair Housing Council Central California. I drove up from Fresno today. Thank you for having me.
I too support senator Weiner's request for fair housing funding. The delays in federal funding have had a devastating effect on our our office particularly. I represent a small constituent of a large constituent of folks of 35 counties, and there are five of us servicing that county representing the Fair Housing Council. I had to lay off all four of my my team members. So, I alone, until the funding kicks in, am representing 35 counties as as it pertains to fair housing.
So, please please do your part. Thank you.
Speaker 66
Thank you. Good afternoon. AJ Johnson with John Burton Advocates for Youth. Thank you to the senate for your plan that would include both revenue generation and two rounds of HAP. We appreciate that.
We are here to support an 80,000,000, ongoing request that would be a youth homelessness funding guarantee in the budget and would appreciate the senate support with that. Thank you.
Speaker 67
Good afternoon. Kim Lewis representing the California Coalition for Youth and appreciate the your chair's comments this morning, around the framework that senate has put forward. We are very grateful for the HAP funding to bring it up to a billion dollars in the round seven and for round eight. We'd love to get to a place where we can have ongoing dollars for this so we don't have to continue to fight for this and support increasing every amount of investment towards our young people, because we know this is the best way to really solve the problem in the long run. And as we're talking about housing and building affordable housing, we need a housing for our young people.
We need transitional housing, and so any sort of housing bond or discussion on that needs to have resources dedicated for our youth and those service providers who are working directly with our young people to be able to create that housing as well. Thank you. Thank you.
Speaker 68
Good afternoon. Craig Polser on behalf of Equality California here today in support of continued funding California versus Hate Program. Over the past three years, this program has become a critical lifeline, not only helping people report hate crimes and hate incidents, but also connecting them with critical support and resources. And this is especially important for LGBTQ folks, especially members of the transgender community who are facing increasing violence and hate across the country. And without action from the legislature, this program will expire at the June.
So, respectfully urge the legislature to restore funding for this critical program. Thank you.
Speaker 69
Good afternoon madam chair and members. Raymond Contreras with lighthouse public affairs. I have two. First is on behalf of spur a public poll a public policy think tank out of the Bay Area in support of the housing governor's housing proposal. This proposal would be, is about making California financing system actually work so projects can move forward to the construction faster.
Right now, the fragmentation across programs creates slow delivery and drives up costs. We know that the current system is inefficient and tens of thousands of dollars per unit are spent annually when these projects are halted. The proposal lines with bonds tax credits and programs like a a h s c so deeply affordable projects can actually move forward. Bottom line this is a practical proven approach to reduce delays cut costs and deliver more housing faster to Californians. And my second one is on behalf of San Diego housing commission and Los Angeles county housing solutions agency we respectfully request the support of the 32,000,001 time investment in California's regional housing financing authorities championed by senator Aragine.
Helped build regional capacity to innovate and better deliver rental protections and homeless prevention programs. This targeted investment will maximize impacts and deliver results across Southern California we respectfully urge your support on this budget.
Speaker 70
First of all thank you for hanging in there I know it's been a long day for you all and I will be brief my name is Jenna Abbott the executive director for the California Council for Affordable Housing and I'm here to comment on item number one this morning. Our organization represents the full ecosystem of affordable housing industry including lenders, developers, syndicators, everything that goes with it. First and foremost, I want you to know that we support
Speaker 70
want you to know that our association supports the long term goal of creating a true one stop shop. We appreciate the time that the LAO spent preparing the analysis they have raised some excellent questions about proposed exemptions from open meeting requirements and the composition of the HDFC among others that really deserve your answers. 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 be available only to HDFC projects represents a substantial departure from the existing process that affordable housers depend upon to assemble the capital stack. Redirecting such a large share of the bond authority to a new and untested entity introduces uncertainty and risk. From our perspective HDFC should be afforded time to become fully operational and demonstrate readiness before assuming any share let alone a significant share of the bond cap authority.
We urge consideration of an alternative approach that preserves the certainty and predictability that currently exists with SEDLAC and TCAC. Developers depend upon this to move projects forward. Like the LAO, we recommend a needs based framework to guide any future allocation of bond cap between SEDLAC and HDFC rather than establishing a fixed minimum allocation at the outset. We also strongly recommend a reporting requirement to assess how any changes that might be adopted work overtime with the option to tweak as necessary. We have submitted a letter for the record for outlining our concerns and offering these recommended alternatives and we look forward to working with you and continued engagement with the administration.
Thank you so much.
Speaker 71
Good afternoon madam chair clifton Wilson on behalf of the San Francisco mayor's office of housing and community development in support of the budget trailer bill provisions relating to allocating at a minimum 50% of tax exempt private activity bond to the HDFC as well as streamlining the AHSC program. Thank you.
Speaker 10
Good afternoon. My name is Michelle Moaning. I'm a mobile homeowner at a nice park in Roseville. I'm here in opposition to HCD's fee increase proposals. My park was 42 as a private owned.
It was sold five years ago to a predatory investment company out of state. And in those five years, my space rent has increased 30%. 30%. It's not affordable anymore and any increase, it hurts the bottom line. Thank you.
Speaker 72
Good afternoon. My name is Roger Johnson. I'm the chairman of the Sacramento Area Coalition of Mobile Home Associations. And, we're all homeowners and we're all feeling the pinch and we are all opposed to the fee increases suggested by HCD. And, as you had mentioned, madam chair, the audit that was done had nothing to do with budgets and it certainly could use one.
Secondarily, all those fees find their way down to us and our affordable housing, our seniors, our veterans, our immigrants, people living on fixed incomes are seriously in harm today. And, as the nation has noticed, the newest group of homeless people are seniors and veterans like myself. We need your help. We will feel those fees one way or the other directly or indirectly. And lastly, discussing with other folks wondering how and why a budget subcommittee got to listen to fees that would directly affect us and the park owners who would pass them on to us when they're not affecting the state budget.
Thank you so much for listening. We appreciate your time.
Speaker 20
Good afternoon. Kirk Blackburn here on behalf of the San Diego Association of Governments or SANDAG, as well as MTC ABAG and SCAG, the three largest MPOs in the state. Here in support of efforts to modernize affordable housing and sustainable communities program, including the creation of a sustainable communities implementation program to provide formal funding to MPOs on an annual basis for projects and programs that accelerate progress towards SES GHG targets, consistent with the successful REAP one and REAP two programs. MPOs are best positioned to use this funding to help deliver the state deliver on its ambitious climate housing and transportation infrastructure goals thank you.
Speaker 73
Good afternoon chair Natalie speak back with housing California on behalf of our budget coalition of 103 affordable housing homelessness and tenant protection organizations I want to say thank you for the senate's budget framework which recognizes that when it comes to housing low income Californians there's no substitute for for investing in proven programs. We encourage the senate to hold the line on the named programs and also fund the portfolio reinvestment program, the certain farm worker program, and the homeless housing rescue fund. Funding these programs is even more important given CARB's recent proposals that would significantly cut or zero out the ASIC program, which is the state's only ongoing and largest source of funding for affordable housing. On behalf of Just Housing California, we support the trailer bill proposal to automatically allocate at least half of bonds to HDFC projects, which will reduce the time and cost of building affordable housing and ensure that future political shifts won't lead us back to a fragmented system. But it's critical that state tax credits and 9% credits can be paired with HDFC projects.
Otherwise there will be a net loss of funding for deeply affordable projects. We also support splitting the program which will reduce time and cost and ensure that a sick projects can benefit from HDFC streamlining. Thank you.
Speaker 74
Good afternoon chair thank you so much for allowing us the opportunity to speak my name is taisha watts on behalf of the California housing partnership we echo the sentiments of housing California and really want to give thanks to the senate for course correcting a lot of funding that we were unable to see and the governor's proposed budget. Specifically we're asking to maintain funding for the multifamily housing program and ensuring that we also invest funding for the portfolio reinvestment program and our state light tech program. And in regards to the trailer bill language, we are supportive of the trailer bill language to allocate 50% of bonds to the new ADFC. We think this is a great direction for us to be able to get to a one stop shop where we're able to ensure that projects who are in the pipeline are able to finally come to fruition so that we have enough affordable housing for many Californians. We are also encouraged by the split for the AISC program.
The AISC program is one of our flagship programs for how we're able to produce affordable housing, so we want to ensure that that program is intact and that we recommend maintaining geographic equity cap and investing in priorities like GHG emission reductions and the program. But, lastly, as we move forward to this one stop shop, we need to ensure that we have the resources to sustain it. So, the trailer bill did not mention 9% tax credits. We are recommending that a portion of those tax credits go to the new HDFC so that those who need subsidy can go through the door of HDFC and those who don't can still be able to receive tax credits through sit lack. Thank you so much.
Thank you.
Speaker 13
Afternoon. Debbie Arakell with Habitat for Humanity California, and I'm here representing our Habitat statewide that make affordable homeownership possible in 42 counties. And first, on behalf of Habitat, I wanna express our appreciation for the senate leadership's priorities, investments including cal home for affordable homeownership production and home preservation. We applaud the senate's vision to maintain effective housing investments across the continuum from homelessness services to affordable homeownership including cal home. Recognizing that affordable homeownership supply must be part of California's comprehensive housing solution.
Investing in Cal Home also serves as a preventative measure securing long term stability and housing justice for California families. We urge the senate to continue to prioritize the Cal Home program because it works. It's the number one financial tool that Habitat for Humanity uses in rural and urban communities statewide. It comes with accountability, and it is highly leveraged with private dollars. And we're able to use this to build and preserve entry level ownership homes.
And the funding is gone. I know there was discussion this morning about funding being in the community and building, and that is true. However, all of the funding from the last round of Cal Home is gone. So without an inclusion in the budget, there will not be another round of funding for Cal Home, which leaves hundreds of homes in the pipeline. Thank you for prioritizing Cal Home, the primary program that builds homes providing permanent solution for housing affordability for California families.
Thank you.
Speaker 25
Good afternoon. My name is Holden Weisman. I'm director of policy and advocacy for Habitat for Humanity Greater San Francisco. So our service area covers the counties of Marin, San Francisco, and San Mateo, three of the most expensive counties in the state. And you may wonder how we're even able to build Habitat homes in such expensive environments, and that is Cal Home.
It's a huge subsidy to us to be able to not only build, produce new homes, but participate in home preservation programs. And, we also get a significant amount of funds that help us help our families through mortgage assistance programs that brings down the per unit of our homes and makes it possible for us to continue to sell our homes to homeowners and keep their mortgage rates below at or below 30% of their their monthly incomes. Just an example of it, Cal Home also is a great as previous speaker mentioned, Cal Home is a great way for us to leverage other dollars as well. We had one project in in San Francisco itself that produced eight units of ownership housing that we received $4,000,000 in in Cal Home. That also unlocked $4,000,000 in philanthropy to help us produce those eight units of housing in a very expensive and very nice area of San Francisco.
So, we really do appreciate the the funds that we have. CalHolme is currently out of funds. We need to to be able to to rely on these kinds of funds to make it possible for us to even consider whether or not some of our projects can move forward. So we so I currently I encourage you to please make sure that $500,000,000 for Cal Homes stays in the budget. Thank you.
Speaker 71
Good afternoon, committee members. My name is Pat Rickett. I am here representing Habitat for Humanity East Bay Silicon Valley. I'd like to start by echoing the sentiments of my fellow Habitat colleagues for including Cal Home in the budget discussions. I am here to strongly urge the committee to commit a $500,000,000 allocation for Cal Home in the upcoming state budget.
Cal Home has a significant and direct impact in our service area of Alameda, Contra Costa, and Santa Clara Counties. Right now Cal Home funding is building 10 new affordable homes in Hayward, and will soon build 19 in Walnut Creek and another 15 in Santa Clara, all while repairing and preserving homes throughout our region. Cal Home Funding is incredibly important to our work and allows our affiliate to increase the number of Bay Area families that we can serve. Please ensure that Cal Home can continue opening doors of opportunity for your constituents as well. Thank you.
Speaker 75
Good afternoon. My name is Alex Regala. I'm with Mid Pen Housing. We're a nonprofit affordable housing developer, property manager service services provider I working in the Greater Bay Area and Central Coast. I want to echo my colleagues in expressing our appreciation for the sense of budget proposal that reversed proposed cuts to housing and homelessness programs.
Urge our support for the housing bond on the November ballot, and also express our support for the trailer bills. As a developer, we're constantly strategizing to choose the best financing pathways for our projects and assessing the risk that each path poses. This system currently is unpredictable, it's costly, full of unexpected delays, and it ultimately leads to fewer homes created. For example, we had a project in East Palo Alto that took nearly four years to secure all eight sources of public funding and begin construction. During these four years which included the high inflation we saw during coveted project costs increased 28%.
This is why we're excited about this once in a generation opportunity to rationalize the system and get us closer to a coordinated one stop shop model. For this new model to be successful, it's critical that HDFC have adequate resources to work with so we don't introduce new bottlenecks to the system and slow projects down in our pipeline that have high public benefits. Thank you so much.
Speaker 76
Good afternoon. I'm Becky Flores with Mercy Housing California. We are a nonprofit developer with offices in San Francisco, LA, and Sacramento. We've developed nearly 13,000 affordable homes in California. And I just wanted to express our support for setting a maximum possible allocation of tax exempt bonds to affordable rental housing.
We're also supportive of a predictable HDFC set aside of four percent and state 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. In addition, we're supportive of the proposal to bifurcate the housing and sustainable sustainable communities components of the AHSC program. In addition, we urge you to also pursue steps to maximize resources for affordable housing by reversing the proposed cuts to housing programs in the budget and voting to place the housing bond on November's ballot as soon as possible.
Thank you. Good
Speaker 77
afternoon. My name is Benjamin and I am a housing policy advocate with the Western Center on Law and Poverty. And in my work with communities across California, I constantly see affordable housing developments that are ready to move forward but are stalled simply because of the financing gap has not been filled. Programs like the state low income housing tax credit are central tools that make these developments financially viable. So, I encourage the senate to also fund the portfolio reinvestment program, the Cerner farm worker program, and the homelessness housing rescue fund because it's not just about building housing.
It's about preventing homelessness, stabilizing communities, and ensuring that California works for everyone thank you
Speaker 78
Good afternoon marina Espinosa with the California housing consortium, I'd like to echo my colleagues comments about the need for funding for housing programs including the low income housing tax credit program and the multi family housing program we appreciate the Senate's budget plan. On issue number one we support the concept of a one stop shop and there's a lot that we like in the trailer bill However, we have some suggest some concerns and suggested changes to it to ensure that maximum flexibility can be retained under the new system. And those suggestions are detailed in the letter that we submitted to the committee. I think it's also important to note that CARB's proposed regulations for cap and invest would reduce the amount of funding available for AHSE, and funding for that program is critical for the success of the new system that has been proposed by the administration. We look forward to continuing discussions with you as budget discussions continue thank you
Speaker 79
good afternoon madam chair could I see like a CEO cranks here on behalf of enterprise community partners First of all, I wanted to say thank you so much for the senate for upholding kind of one of the priorities in funding housing in your proposed budget framework. On item one, we want to express our strong support for the state's effort to streamline and better coordinate the way affordable housing and homelessness prevention and intervention is funded through the new California Housing and Homelessness Agency. This one stop shop for will efficiently help us deal more holistically with how the programs are integrated, how the funding is braided, and will produce additional housing. I'd also like to echo a lot of the comments that my colleagues before me have mentioned about how resources is a critical part of ensuring that we continue to fund the the pipeline for housing, and we wanna make sure that that is something that the senate continues to prioritize. We look forward to working with you and your staff to achieve some of the program details and kind of finalizing some of the conversations that are going on.
And lastly, I also wanna just bring up that the proposal that the CARB is currently considering on how cap and invest funding would actually be allocated is very problematic. And we have concerns about how tier three would not be funding it, in particularly some of the housing dollars that are critical. Thank you so much.
Speaker 80
Good afternoon chair members. Chris Lee here on behalf of the Sacramento Area Council of Governments. On issue one is related to the governor's proposed affordable housing and sustainable communities trailer bill. We support the proposal to align that sustainable communities funding with regional projects that implement the sustainable community strategy. We think that housing and transportation integration is one of the core parts of the sustainable community strategy planning process, and we can leverage that work to direct those projects to priorities that will really get funding into communities and get housing that helps achieve our climate and equity goals.
And so, join with our colleagues from other metropolitan planning organizations in encouraging that funding to be tied tighter to the SCS through an SCS implementation program. And, a way to ensure geographic equity would be to formulaically allocate that out through MPOs across the state to ensure that rural and urban regions also benefit. So, thank you.
Speaker 81
Good afternoon. Harrison Lender with Leading Age California. I want to start by thanking the Senate for its strong plan for funding housing and homelessness programs, and encourage it to not waver in its negotiations with the government governor on these. The low income housing tax in particular the low income housing tax credit program the multi family housing program and half these are essential tools for addressing California's housing and homelessness crisis which disproportionately impacts older Californians. State LITEC events, investments continue to drive affordable housing production, as well as preservation, and leverage significant federal resources.
The multi family housing program provides critical gap financing to reach extremely low income older adults who as we've heard throughout testimony often do not have the opportunity to increase their income like younger households. And consistent funding for HAP is essential to support local homelessness responses and avoid service disruptions. While the most recent point in time count does show an overall decrease in homelessness, the number for older adults does continue to go up. So we just urge that the senate continue to focus on this vulnerable population. Thank you.
Speaker 82
Good afternoon. JT Herichmack with nonprofit housing association of northern California. We represent nonprofit developers across the nine counties of the San Francisco Bay Area. I wanna make three points. First, I wanted to express my support for the first item up today the the trailer bills and the governor's proposal for the new agency how we are in strong support of the changes to a sick and to move the private activity bonds over to the HDFC were in support of a technical and objective measure to redistribute those bonds if there is ever insufficient funding at HDFC to ensure that the pipeline continues moving and my second point I would like to thank the Senate for all of the support they have already given on funding housing in the budget this year this new agency will not be successful without robust funding in the budget and as well as support for the housing bond third I'd like to support the comments previously about our concerns about the card proposal affecting the a sick program and how that might cascade through the overall housing landscape.
Thank you.
Speaker 83
Good afternoon. I'm Emily Weinstein, director of housing and community development for the city of Oakland. I'm speaking today on behalf of the city of Oakland and carrying a message from our mayor, Barbara Lee. We wanna thank the senate for their budget proposal, specifically for the support for HAP and affordable housing. We also strongly support the governor's trailer bill that streamlines housing finance through the housing development and finance committee and urge you to provide the funding resources that will make it a true one stop funding shop.
The city of Oakland has been a committed partner with the state on creating housing for all income levels. Currently, we have 1,600 affordable units in construction or about to break ground, over half of which are for homeless homeless exits. But we we have seen upfront the impact of a fragmented state financing system. Oakland still has over 15 projects in our budget pipeline waiting to build their capital stack and many of them circling year after year. I'm here to say that the proposed HDFC has the potential to be transformative for cities like Oakland.
In particular, we support the proposed 90% tax exempt bond set aside for affordable housing, and ensuring that at least 50% of this set aside is administered through HDFC. HDFC must also receive award authority for at least 50% of 9% tax credits and 70% of ASICs ASIC. Resources must be streamlined and unapproved for the HDFC. Otherwise, the one stop funding shop will be in name only. The potential for the HDFC is huge.
This is about speed, certainty, and scale. If California is serious about addressing its housing crisis, we need both the reorganization and the funding resources to make it work. Thank you very much for your time.
Speaker 84
Good afternoon. I was just remembering our conversation from like fifteen years ago in the Starbucks in Selma or saying, I can't remember which city. It's always stayed with me. So, Good afternoon senators really nice to see you again I'm Preston Prince with the Santa Clara county housing authority. I'm here on behalf of the California association of housing authorities and our strong support for the proposal to streamline the call streamline California's housing finance system.
The approximately 90 housing authorities who make up Kaha or the backbone of affordable housing delivery in our respective communities engaging across the housing ecosystem with the holistic view of community development. Caja supports the one stop shop alignment, including the 90% floor for bonds designated for affordable housing development, and at least 50% of those bonds allocated to the new h of the c HDFC. Bringing h a h s c's affordable housing funds under the new HDFC will allow the state to focus on effective housing strategies and deliver affordable housing in ways that meet environmental transportation and development goals, community development goals. Thank you.
Speaker 85
Good afternoon. Lewis Brown with the Corporation for Supportive Housing. As a lender for the development of supportive housing, we'd like to express support for streamlining affordable housing financing through HDFC. We also like to support, express support for the trailer bill proposal to set aside 55 50 at least half of private activity bonds for to HDFC projects. We also like to thank the senate for proposing significant investments in affordable housing programs, as well as the homeless housing assistance and prevention program.
While we know there's a long way to go in the budget process, we have heard from homeless service providers already that they're relieved to see a billion dollars in this year's budget for half seven and a promise of more funding for half eight in next year's budget. So, we just like to appreciate the senate for proposing those investments and look forward to educating the public about the foundation for the future plan.
Speaker 86
Good afternoon. Danielle Bradley on behalf of the California State Association of Counties. CSAC is in strong support of the senate budget plan to fund the program at $1,000,000,000 for the next two years and want to thank the subcommittee for prioritizing this funding. This program is an essential component of our collective efforts to address homelessness and as well as the recent successes made. Counties are committed to using HAP funding urgently, effectively, and with accountability to meet the needs of our communities, and CSAC continues to advocate for round seven to be implemented in a manner that will allow funding to be distributed by the 09/01/2026 date.
Thank you.
Speaker 54
Good afternoon chair and staff in terms of caparelli here on behalf of the California association of councils of governments whose membership includes the 18 MPOs in the state. Like many of our MPO members who spoke previously, I'm here to express our support for the governor's effort to modernize the ASIC program through its proposed split. We especially appreciate that the proposal includes requirements to incorporate regional priorities in the sustainable communities allocation of the program. As we have seen success of the two regional governments and the sustainable community strategies they produce are key to making progress towards the state's climate housing and transportation goals. Thank you.
Speaker 1
Thank you. I want to again thank everyone for your public comments. We deeply appreciate everyone's input. The only bad part of today is that we have kind of run a little bit long enough that we I'm the only member still in the hearing today. And so as a result, we'll hold all we'll hold open all items today and take our votes at a future hearing.
I I thank you for your understanding and for your patience and for all the questions and comments and feedback that were provided here today I appreciate it. With that the senate committee on state administration general government is now adjourned.
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