Gov. Gavin Newsom wants to dedicate billions of the 2021 budget toward addressing the state’s housing and homelessness crisis, he said Friday, laying out a proposal that includes funding to expand a successful pandemic housing program, increase housing for seniors and add beds in behavioral health facilities.

The budget proposes $1.75 billion in new investments for homeless housing, including $750 million to continue Project Homekey — the pandemic program that helps cities and counties buy hotels, apartments, dorms and other buildings and turn them into long-term homeless housing. Newsom also is asking the legislature for funding to stimulate affordable housing construction and augment the construction workforce.

“In these darkest moments of the COVID-19 pandemic, this budget will help Californians with urgent action to address our immediate challenges and build towards our recovery,” Newsom said in a written statement.

Last year, continuing efforts to temporarily get homeless Californians off the street and out of crowded shelters during the pandemic, the governor’s office allocated $846 million in federal, state and philanthropic funds toward Project Homekey. Using those funds, cities and counties purchased 94 buildings, creating more than 6,000 units of long-term homeless housing. The purchases were granted exemptions from certain permitting requirements, speeding up the process and allowing the deals to close in a matter of months instead of years.

“Because it worked, we might as well double-down on it,” Newsom said Friday. “And that’s what we’re proposing to do.”

Of the $750 million Newsom is requesting to continue the program this year, he’s asking the legislature to make $250 million available immediately. And under his proposal, all future Homekey acquisitions would be streamlined as past acquisitions have been.

Newsom also wants to make $750 million available for cities and counties to spend on expanding their behavioral health treatment centers. That money would be a one-time grant spent over three years. Another $250 million would go toward buying or rehabilitating long-term care facilities and housing for low-income seniors.

“In this pandemic year with federal aid to local governments being way below what it should be, I think what we’re seeing from the governor’s budget proposal is very positive — major new investments both to combat homelessness and to create more permanent supportive housing in partnership with local governments,” said Matt Schwartz, president and CEO of the California Housing Partnership.

But Schwartz was disappointed this year’s budget proposal doesn’t include a long-term plan for addressing the housing and homelessness crisis.

“We’re going to continue pressing the governor today to really come back after the announcement of these one-time investments and join us in saying it’s now time to make a 10-year plan,” he said, “because it will take 10 years to house 150,000 homeless and produce 1.2 million more homes.”

To ramp up housing production throughout the state, Newsom, as he did in 2019 and 2020, is proposing $500 million in low-income housing tax credits — a major source of funding developers rely on to build affordable housing. And the governor has asked for $8.5 million to fund a construction apprenticeship program with the goal of bringing more workers into the construction trades.

To make sure California cities comply with requirements to build enough housing for their populations, Newsom wants to create a Housing Accountability Unit to work with local governments.

“It’s all about accountability at all levels of government,” he said.


By Kelley Wheeler

Kelley Wheeler is a Metro reporter covering political issues and general assignments. A second-generation journalist, worked with all major news outlet, she holds a vast expeirience. Kelley is a graduate of USC with degrees in journalism and English literature. She is a recipient of Yale’s Poynter Fellowship in Journalism.

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