Summary of Governor's May Revise

On May 9th, the Governor released the May Revise, his revised budget proposal for the 2019-2020 fiscal year. The proposal continues to offer significant funding for affordable housing and to address homelessness. Key proposals include:

Low-Income Housing Tax Credits (LIHTC): The May Revise retains the $500 million in one-time funding for the state LIHTC program that was included in the Governor’s January budget proposal but with some changes. The new proposal allows for state credits to be used for preservation projects and also repeals the 2020 sunset date on the ability of developers to sell certificated credits to investors without required the investors to be part of the ownership group. The Governor also proposes making the directors of HCD and CalHFA voting members of the Tax Credit Allocation Committee.

Housing Planning: The May Revise retains the Governor’s proposed $250 million in one-time funds for planning and technical assistance grants to help local governments prepare to accommodate the much higher RHNA numbers that will be allocated in the 6th housing element cycle. Funds will be split evenly between councils of governments and local government entities. The one change over the January proposal is the addition of school districts and county offices of education as eligible recipients of funds to help plan to utilize surplus property for school employee housing.

Infill Infrastructure Grant Program: The Governor’s January budget proposed $500 million in one-time funds to go to city and county general funds as a reward for meeting certain planning and production targets. The May Revise instead proposes putting that $500 million into the Infill Infrastructure Grant Program, which funds new and rehabilitated infrastructure to support higher density affordable and mixed-income housing development in infill areas. This program also received $300 million in Proposition 1, bringing the total funding proposed to be available to $800 million

State Surplus Property for Affordable Housing: The May Revise includes $2.5 million in one-time funding for real estate consultants for HCD and the state Department of General Services to assist with the Governor’s effort to make surplus state property available for affordable housing development. The Governor also proposes $780,000 in ongoing funding for additional staff at HCD to help with developing RFPs, conducting site investigations, and evaluating and monitoring housing projects.

Homeless Emergency Aid: The Governor’s January budget included $500 million in one-time funds to assist local governments in addressing homelessness, split $300 million for planning purposes and $200 million in rewards for meeting certain milestones, which would go into local general funds. The May Revise shifts this proposal significantly, increasing the amount to $650 million to be split as follows: $275 million to the biggest 13 cities in the state, $275 million to counties, and $100 million to continuums of care (CoCs). Allocations in all three funding categories would be based on the 2019 point-in-time count, with allocations to cities and counties additionally requiring submission of a regional plan to the CoC showing collaboration among local entities. Such plans would also have to approved by the state. Funds could be used for a range of uses, including emergency shelters, navigation centers, hotel and motel conversions, supportive housing, rapid rehousing, and employment programs.

Legal Aid for Renters: The May Revise includes $20 million in one-time funding to provide grants to nonprofits for eviction prevention, counseling in landlord-tenant disputes, and renter education programs.