As part of his proposed budget for California, Gov. Gavin Newsom has proposed distributing $750 million to cities and counties to accelerate their production of affordable housing. This figure would be broken into two portions: $250 million to update local zoning codes to more accurately reflect the needs of municipal and regional populations, and $500 million in incentives for jurisdictions that meet certain housing goals. The funding is part of a larger $1.75 billion economic package to meet the state’s housing crisis.

Russ Heimerich, deputy secretary of communications at the state’s business, consumer services and housing agency, told the Business Journal that the $250 million component could be used to adjust regional housing needs allocations (RHNA) to make them more equitable for the jurisdictions they encompass.

“So, when a regional council of governments divvies up who should build what, I think we’ll have more of a review and approval process going forward,” he said, referring to the process of creating RHNA allocations. These figures denote housing production goals by region. The $500 million component would be dedicated to jurisdictions that show progress in their planning and production efforts. “That would come with fewer strings and go towards general purpose funds,” Heimerich said.

Heimerich added that the $750 million would be granted in addition to a proposed $1 billion in tax credits and funding to help middle-income Californians. The deputy secretary noted that the full details of the proposal, which Newsom’s office announced in mid-March, have not been determined yet. The budget may be revised by the state legislature, which has until June 15 to pass it.

Rebecca Clark, president and CEO of LINC Housing Corporation, a nonprofit developer of affordable housing, said that she was “thrilled” by Newsom’s budget proposal. “We finally have state leaders recognizing that there’s an affordable housing crisis in California, understanding it’s very complicated, but taking concrete steps to do something,” she commented.

California’s housing crisis affects people at multiple income levels, Clark continued, from the homeless to what she called the “general affordable population,” which is made up of people that are working but not making enough to support their housing. “Much of the service population in Long Beach, for example, might qualify for general affordable housing,” she said.

LINC Housing has worked closely with the City of Long Beach to develop affordable housing projects. The most recent is The Spark, a 95-unit apartment community for the formerly homeless and families earning up to 60% of the city’s median income. Groundbreaking for the property was held on March 20 at 1900 Long Beach Blvd. (See Page 1 story). “Long Beach has been very progressive and great to work with,” Clark said. “They were the ones who really responded enthusiastically when we proposed The Spark project.”

Long Beach Mayor Robert Garcia, along with 12 mayors from the state’s largest cities, met with Newsom on March 20 to discuss his budget and offer their recommendations for changes. “We’re very supportive of the governor and his housing plans, and I think heartened by the conversations we had today,” Garcia told the Business Journal in an interview on the same day. “We are supportive of building more affordable housing. We need it.”

Garcia added that he and his fellow mayors are even more concerned with the issue of homelessness. “The mayors were there today to advocate for more funding to go directly into homelessness and programs that get people directly from homelessness into housing,” he said.

In his January budget, Newsom set aside $500 million for homeless programs, transitional housing and subsidies – a comparable figure to what Gov. Jerry Brown set aside in his last budget. Garcia said that the mayors have asked Newsom to increase that figure by up to a billion dollars.