CAR Responds to California State Budget 2022-23 – NMP
California state leaders reached a “near final” budget deal for 2022-23 proposed in early January by Governor Gavin Newsom; However, the California Association of Realtors (CAR) challenged the nearly finalized budget, saying homeownership development should be an integral part of other initiatives included in the budget.
CAR issued the following statement: “THE CALIFORNIAN ASSOCIATION OF REAL ESTATE AGENTS, while encouraged by Governor Newsom’s proposed budget to fund CalHFA’s efforts to help Californians become homeowners, we believe that the development of the Homeownership should be an integral part of the other initiatives included in the budget. For example, higher density residential development offers prospects for greater home ownership opportunities, as does adaptive reuse. California’s housing need exists at all levels and the allocation of funds to facilitate and expand homeownership housing should be more focused in this budget.
The governor’s 2022-23 budget proposed to spend $286.4 billion in total public funds, with just 1.7% going to business, customer services and housing.
Yet the proposed budget lends a helping hand to California’s overwhelming homeless population by committing an additional $2 billion to address homelessness over the next two years. A portion of those funds ($500 million) will go to homeless encampments, specifically “for jurisdictions to invest in short- and long-term rehousing strategies for people experiencing homelessness in encampments.”
The Governor also proposed $2 billion in new one-time resources to increase the supply of affordable housing. According to the budget report, 1 in 5 California adult renters with household incomes below $50,000 reported being in arrears with rent payments as of December 2021. A portion of $500 million will go to the Infill Infrastructure Grant program; $300 million for the Affordable Housing and Sustainable Communities program; $100 million for affordable housing development and adaptive reuse of surplus public land; $100 million for adaptive reuse incentive grants per unit; $200 million for loans to develop mixed-income rental housing; $200 million for the Portfolio Reinvestment Program to preserve at-risk affordable housing in inner cities; and $100 million for the Mobile Home Park Rehabilitation and Resident Home Ownership Program.
The proposed budget also allocates an additional $500 million for Low Income Housing Tax Credits (LIHTC).
However, the governor’s proposal does not include any funding for emergency housing assistance for struggling tenants. Meanwhile, requests for assistance from California’s COVID-19 Emergency Rental Assistance Program now total more than $5.2 billion in federal funds originally provided to the state. Although federal funding may arrive, but not enough to fill the gap, and many low-income renters are at risk of losing their homes.