California finally acquires housing agency in the heart of the U.S. housing crisis

After years of rent, increasing home prices and an enduring homeless crisis have touched every corner of the state, California will eventually create a national agency dedicated to housing issues.

You might be wondering how long it took.

Earlier this year, Gov. Gavin Newsom proposed a proposal to split the business, consumer services and housing agencies (an awkward bureaucratic action bag robbery bag) into two fresh agencies: one for housing and homeless departments only, and the other for everything else.

The Legislature must veto the plan by July 4. It doesn’t (although some Republicans have tried it). Now, the work to build California’s first housing agent has begun.

Supporters of bureaucratic reorganization say the move is long overdue. In the survey, Californians often refer to housing costs and homelessness as the state’s top concerns. This alone could create a new cabinet-level adviser for the governor, said Ray Pearl, executive director of the California Housing Alliance.

“Catal level secretary will sit with other cabinet secretaries, and their terms of reference will be housing … This will raise the agenda to the highest level,” he said.

Pearl, almost like every expert in this article about the new agency, calls the restructuring “just the first step,” bringing much-needed orders and efficiency to California’s network of affordable housing funds.

“Simply moving and giving them a new business card won’t change the system,” he said.

A spokesman for the governor stressed that the creation of new housing institutions is part of Newsom’s broader effort to prioritize one of California’s most frustrating problems. Since seizing the state’s helm in 2018, the governor has increased pressure on local government plans to make more housing, urging them to clear unwelcome Californian camps and push for legislation aimed at improving construction.

“This is the first government to make this process part of our daily conversation – putting the magnifying glass on the issue of homelessness and finding effective solutions to it. These structural and policy changes will have generational impacts.”

Among the seven cabinet-level institutions, BCSH always looks like the “other” forces of the state government. Affordable housing grantors, lenders and urban planning regulators share agent letterheads with everyone in the cannabis and alcohol industry supervisors, professional licensors, automotive machinery regulators, and the California Horse Racing Commission.

“We used to call it ‘Misfit Toy Island,'” said Claudia Cappuio. “Imagine the staff meetings of all these things…I learned a lot about horse racing.”

Aside from giving housing and homeless people their own boxes on Newsom’s organizational chart, the main selling point of the restructuring is to simplify the state’s affordable housing financing system.

Currently, there is a state organization that affordable housing developers apply for loans, and another one that they receive most grants, they apply for third place in the federal tax credits that builders use to attract private investors to support their projects, and a fourth place in the bonds needed to acquire many credibility. This does not include one-time plans for veterans, transportation-oriented developments and short-term housing for homeless people, which are spread throughout the state.

Compounding things further, tax credits and bond funding programs (the backbone of the nation’s affordable housing development funds) are not even under the governor’s control. These plans are run by the state’s independently elected treasurer.

“Many states have a basically housing financial institution that controls most affordable housing funds,” said Sarah Karlinsky, who studies at the Terner Center for Housing Innovation at UC Berkeley. California’s plan was split, which was unusual.

Besides that, Karlinksy said, “what makes California so unique is that resources are distributed among two different constitutional officials.”

This split appears to be increasing the cost of construction in California. Terner Center analyzed this spring estimates that each additional public funding source delayed an average of four months for a project and added an additional $20,460 per unit cost.

The construction of affordable housing is already very expensive. A recent report from Rand College found that setting up a publicly funded program in California costs more than 2.5 times more than Texas and Colorado.

Will new housing institutions solve this problem? Not everyone believes it.

Senator Christopher Cabaldon, a Democratic Napa, said in a March hearing that “lines on the ORG chart” won’t crack the “top 100” in many ways in which the lack of affordable housing affects most people.

Cabalton points out that implementing reorganization is a semi-rule feature of California governance. Business, Consumer Services and Housing Bureau itself is the product of a restructuring that spans California’s independent transportation agency.

“We have always been dancing with grand ambitions as secretary,” Cabalton said. “Simply put, it will cause more emphasis, it will cause leadership action, but how? ”

As in writing, the new housing agency will consist of the current agency housing-related entities as well as a new Affordable Housing Finance Committee, which is tasked with coordinating the housing subsidy program currently controlled by the governor.

However, the main sources of funding managed by the Finance Minister’s Office will remain where they are. The California Constitution also does not allow news agencies to direct these functions of independent treasurers, even if he wants to.

Little Hoover Commission, the state’s independent oversight body, said it was a major drawback, which reviewed the governor’s plan before it was transferred to the legislature. In its final report, the Commission recommended that the governor and the treasurer reach a formal agreement to “create a unified application and review process for all affordable financial plans under their respective mandates.”

Neither the Governor’s Office nor the State Department’s Finance Secretary Fiona Ma will say whether they are achieving this goal.

Since at least the mid-1990s, the Holy Grail of California’s affordable developers and policies, Wonks, has made a unified application for every publicly affordable housing funding program in California. Matt Schwartz, president of California Housing Partnership, said that although the restructuring no longer requires the two constitutional offices to better coordinate the constitutional offices for better coordination.

“There will be some diplomacy between the two executives” to develop a joint application, Schwartz said. “This is a long-term reward that many of us will work to get out of this process.”

Some affordable housing advocates urge lawmakers to be cautious when making up for various bureaucracies.

The California Housing Consortium emphasized in a letter to four powerful Democratic lawmakers that the application system managed by the Treasurer’s Office has “operated very well.”

The alliance director Pearl said the process “has not broken and does not need to be repaired.” Before interacting with it, he said, “Let’s build the agency.”

Pearl and the consortium also pointed out that past legislation has authorized the creation of a working group to file a merger application. The team’s findings will expire on July 1, 2026. That is the same day that BCSH will be officially disbanded, and two new institutions will take their place.

It’s also five months in five months, with statewide elections set to replace News Ma and Jack Ma, which gives voters the opportunity to decide who will shape the future of affordable housing in California.

Christopher writes for Calmatters, which originally appeared here.