Budget Sub4 — 2026-04-30 (partial)

Thank you. Thank you. The Senate Budget and Fiscal Review Subcommittee 4 will come to order. We are holding our subcommittee hearing here at State Capitol Room 113. I ask all members of the subcommittee to be present in Room 113 so we can establish our quorum. The focus of today's hearing is affordable housing and civil rights. Both are incredibly important topics. Not so surprisingly, we have a lengthy and a dense agenda to work through today. Much of the agenda involves review of budget proposals brought to us by the administration back in January. As you are hopefully aware, however, the Senate recently put out its own plan for the 2026 budget foundation for the future. While sharing many goals with the governor, the Senate budget plan diverges from the governor's proposal in several ways. One of those differences is with the respect to state funding for the production of affordable housing. Since that is one of the topics of today's hearing, I wanted to take a moment here at the outset to highlight key components of the Senate's plan as they relate to affordable housing and combating homelessness. First, the Senate's plan calls for $2 billion of investment in lowering the cost of housing. That includes $1 billion to fund the construction of multifamily apartment complexes with rental rates that are typically no more than 30% of a household's income through initiatives like the multifamily housing programs, the enhanced state low-income housing tax credits, and $1 billion to help more Californians purchase their own home with a particular emphasis on first-time and first-generation homebuyers who have not been able to access the wealth-generating power of home ownership before. Through programs like CalHome and California Dream for All. I am proud of these proposals. For thousands of California families, they will lead directly to real and tangible reductions in their housing cost. Exactly the kind of concrete affordability solutions my constituents and Californians across are demanding and deserve. Second, the Senate plan offers a path forward on homelessness. Over the past several years the state has poured significant resources into getting people off of the streets and into permanent housing It has been a long and frustrating slog but at last we are seeing clear indications that our efforts and our investments are making a difference As homelessness numbers in other states have exploded, the growth of homelessness in California slowed to a trickle in 2024. and in 2025, we saw our first overall outright reductions in unsheltered homelessness in over a decade. The worst thing we could do now is to walk away and squander that momentum. So the Senate plan fully funds round seven of the Homeless Housing Assistance and Prevention Program and commits to full funding of round eight, giving our local partners across the state, including my partners in Fresno, Bakersfield, Kings, and Kern counties, the resources and the assurance they need to keep moving forward. We will not be taking votes on these Senate plan proposals today, but I wanted to highlight them here at the outset. We welcome your thoughts on them as part of today's public comment. And before we turn to the rest of our agenda for the day, I want to invite my colleagues on the dais to offer any opening remarks that they may have. And since our vice chair is not with us just yet, we'll begin with Senator Cabaldon. No comments? Okay. All right. We cannot establish a quorum just yet, but we'll go ahead and move on and begin with agenda item number one. Item number one on our agenda involves a proposal from the administration to significantly restructure the state's affordable housing funding system. There are several different state government entities involved and we are honored to have staff and leadership from all of them here to present. If you would all come forward please at this moment. Thank you for being here. And when you're ready, feel free to begin. Thank you.

Good morning. Good microphone on. Great.

Good morning. Buenos dias, Chairwoman Hurtado, committee members. I want to echo the comments from Secretary Moss, and thank you for the opportunity to present to this group, which has been instrumental in delivering the investments needed to address California's housing and homelessness crisis. Last year alone, ACD announced nearly $2.8 billion in funding despite the current economic conditions. Homekey, from rounds one through three, has delivered more than $4 billion in funds to open 16,000 new homes supporting up to 175,000 Californians during the life cycle of the program. Home Key Plus, the new iteration, which is funded through Proposition One, has awarded already $600 million supporting an additional 1,800 homes serving veterans and unhoused individuals with significant health needs. More than $100 million to support recovery and rebuilding efforts after the Southern California LA fires and federal funded programs under which HCD has awarded $600 million to nearly 300 projects. This is very important. These investments are critical. Thank you for supporting all of that. But Beyond Investments, HCD has also helped turn policies into progress through housing accountability and enforcement. We are beginning to see the results of this work. In 2024, homelessness increased nationally by over 18%. California limited its overall increase to 3%, a rate lower than 40 other states. California saw the largest decrease in veteran homelessness nationwide in 2025, and yearly residential construction grew by nearly 60% from 2018 to 2024, and the time it takes to entitle new housing today has been cut in half. These results are the product of sustained, targeted, and accountable investments in collaboration with local governments, local developers, service providers, and of course the state legislature. As the Secretary mentioned, in July we will transition this further centralized our finance programs, one aspect of all of the reforms here in the state that has left undone, and This will reduce duplication, bureaucratic delays, something developers, advocates, experts has been asking for decades. I remember my time back at the Urban Institute, a national policy research think time where these reforms were being published and we are here talking about these reforms right now integrating competitive programs into one application center under this new committee is critical to providing certainty, predictability, and transparency that have not been fully addressed until now. And if I may add, without integrating the housing portion of the CAPEN Invest Program, the affordable housing and sustainable communities, this vision could not be fully realized. The one stop, one application. We are here today in full support of that vision and

The transformation of the current agency, BCSH, is really working to shift our approach to consumer protection, business regulations, civil rights, housing, and homelessness. And Chair Hurtado, I think you led with this. It is our responsibility as government to figure out how we can deliver our programs and services in the most effective way that we can, and this is really our attempt to do so. It's more than just an organizational shift. It's a strategic shift designed to improve how we as government provide better access to housing and civil rights protections, consumer protections to our communities and industries that we work with. And we are on track to meet our deadlines, which I'm super excited about. Since the reorganization became effective, our teams have been hard at work. We've established work groups to implement changes necessary for both agencies, as well as the new Housing Development Finance Committee. We've partnered with GovOps, Department of Finance, and the State Controller's Office to stand up all the necessary fiscal and administrative infrastructure. We've developed operational plans with the Department of Consumer Affairs and HCD to ensure that personnel and fiscal services have transferred smoothly. And one of the things I'm really proud of is the robust engagement that we've done with our stakeholders, local governments, our tribal partners, all folks who are integrated in the success of this effort have been at the table to help that these agencies will build the kind of system that works best for them. And we are actively recruiting our new staff that is going to be required for the new reorganization, so I'm excited about that. We've started that process in May. We hope to have those positions filled as soon as we can. And then lastly, we are working toward establishing draft guidelines and a charter for the new committee for HDFC. The governor's budget proposal utilizes this new organizational structure to really streamline California's housing finance system so that projects can move from a ward to construction much faster than we're used to. Through HDFC, which I think is the innovation of this reorganization, we are implementing, as Director Velasquez talked about, long-standing calls from legislators, from our housing partners, from many stakeholders about a more coordinated and streamlined housing funding system. Just to provide a little bit of context of what we experience now, in our current system we know that every additional funding source adds about four months in additional time and $20,000 per unit when we have delays in our funding system. The HDFC executive committee which are the three of us represented here will ensure that the committee brings about the increased transparency, consistency, and predictability that is necessary for our affordable housing finance programs. We also talked a bit about the one-stop shop. This will be really incorporated into the design of HDFC, all of the work that AB 519 working group has been leading in implementing a single application with a single review and award process, creating a more streamlined post-award process, increased and more effective coordination with our partners on the asset management side of the house as well as compliance, and identifying new tools and ideas to continue to increase our program's efficiency and impact. This budget builds on the work that you all have been committed to for a really long time and that the administration has been putting forward for the last seven and a half years. And I'm really excited about its potential. And I know that there are a lot of questions about how we will realize the transformational aspects of this plan, but I think this is really our first step. So that concludes my remarks, Chair. I'm happy to take any questions that you all might have for the three of us. We also have my colleagues, Christina Moon and Megan Kirkaby, who can provide more details on our trailer bills when that time is right.

Blair Huxman, Department of Finance. No comments at this time.

Paul Steenhausen with the Legislative Analyst's Office. We will have comments after the subcommittee hears the trailer bill proposals We comment then Okay Questions from committee members Senator Smallwood

Yes.

Absolutely. Thank you. I didn't know if y'all wanted to interlude for this moment or if you are ready to hear from my colleagues.

Thank you.

Do we have any further testimony on the trailer bill? Okay. Going back, Department of Finance, any comments?

Thank you. Questions from committee members? We'll go with Senator Kabbaldi. Thank you, Madam Chair. Thanks, Secretary Moss and our other administration colleagues. First, we obviously spent a lot of time on this issue last year as well, the reorganization in particular, and it's encouraging to see the progress that's happening. I have a question. I'm trying to make sense of the trailer bills and the language reasoning. So the trailer bill describes the HDFC executive committee as going into the committee on July 1st, but the trailer bill only refers to the executive committee in every other way. Is there are these two distinct committees or is there is the executive committee the committee at this stage?

OK, so why do we have another name for the same for the same thing?

transition phase that happening Will we start just calling it one thing at that point And it just like we have so many housing That part of our existing problem we don need more boxes and but it also raises for me and the raises question last year both here in a little hoover and it kind of is highlighted a little bit by the by the apa issues and other things that are in here is like why are we doing this as a committee i mean the it's an odd committee so you know we all serve together on this one um but i don't work for Senator Hurtado. We are all peers in the Senate, and she just happens to chair the committee. But on this committee, there's the secretary, at least on the org chart. There's the secretary, and then reporting to the secretary is the HCD director. And then within the secretary's world, and I don't know, reporting to is the right word or not, is the CalHFA director. But it's not three peers just happen to sit together. Hey, what do you think? What do you think? What do you think? it's it's what do you think boss so I'm trying to understand why are we organizing it this way and then having Bagley Keene and and APA and all these other stuff apply when it could just feed up the administrative ladder and have the secretary make the decision rather than the what seems a bit theatrical maybe but I'm probably missing something maybe you can enlighten us on why

All right. I mean, for me, it's still an open question because those things then induce time, time delays, costs, what have you. I surround it. Yesterday, we had the state allocation board meeting. We did the same thing for school facilities, and that's the same concept. and other than folks who are applicants, it's not like the public is participating in any sort of broad way. And there are a lot of other ways for stakeholders, for folks who are appealing a decision and what have you to get a gift. So I don't have a hard opinion here, but it seems like if, because I'm going to get to my very profound reservations about the ASIC piece in a moment, but we're sort of to every possible thing we're saying, streamline, streamline, streamline, let's go as fast as possible, as possible and then in this situation we're creating a structure that is not really does it is not designed to do that it's designed for this public accountability but is that really what's going to happen in this space more than a secretary who was also accountable to the to the people as well so it's just an open question it's not a I don't have a hard objection but I hope we continue to think about that whether that structure is real also that if I go and testify at that one of that, you know, at an executive committee meeting. And I'm, you know, I'm, I'm, I'm, I'm directing my comments to the whole committee, but in my head, I'm like, am I really only talking to the secretary who making this decision So we should be real about these procedures that we create for public engagement so that they authentic and not theatric But I wanted to get to the ASIC piece because I think we partly in this situation where we looking at ASIC as how do we get this affordable housing program that seemed to find its way somewhere else

Partly we're in this situation because there's no other money here. So we're doing a lot of good work here to try to streamline, to integrate to all of that for programs that have no funding proposed for them. And we have to do both of those things at the same time. And I know there's broad agreement in the room about this. But I mean, that's, you know, as I get to ASIC in just a second, I think that's the reason why this feels like it's a big deal is because we're not investing directly in MHP and the other programs that we absolutely must be doing at a large scale. And so when we don't do that, when we zero the whole thing out, as is in the governor's budget, we don't do what's in the Foundation for the Future plan that the chair raised, then we're looking around. Okay, what's left? Oh, there's this, what's not a huge amount of money in ASIC. Let's capture that, and that'll be the center of our entire streamlining and, quote, unquote, modernization proposal. So just for context, not a question, but we have to fund these programs, both in a bond and also in the budget. That's why the Senate plan is so important. I think the other, but, you know, I was here, you know, I was around the world when ASIC was created, and it was not an affordable housing program that happened to be in another budget. It was, look, we've done cap and trade, we've got GGRF and affordable housing folks and others, and mayors like me at the time said, hey, you know, one way that we can achieve breakthroughs on transportation and land use-based climate emissions, breakthroughs, like we're going to lead the world in this space, is through creating a program that integrates transportation, land use, and housing together and recognizes the important contribution that housing has to play in concert with transportation and other sustainability elements. And that was a fight to win that. And it was a fight within the world of sustainability and climate emissions. and the climate and sustainability policy folks, you know, to their great credit, were magnanimous and they recognized the reality and they said, okay, we agree and ASIC was created. But it wasn't an affordable housing program that just happened to have sustainability features. And it wasn't two programs that happened to be married together that now should be decomposed or probably more appropriately said disintegrated. It wasn't, that was the core of that program. And so when we talk about modernizing and streamlining, this is not one of those programs. I still feel lucky that we have this money from the GGR fund. It feels a lot, this proposal feels a lot like the administration's prior efforts to use the GGR funds for high-speed rail, for CAL FIRE. Very important things, also not necessarily core to what the sustainability environmental and climate program is. And I think I'm fully committed to both things. So I am very worried about this proposal because it does seem like this mindset that we have now that this is our money, it always has been, it's our right, we're entitled to it, and we want to make this just an extension of MHP is not correct. and we There has to be more attention to pay to it. So that's appearing in a couple ways. So one is the two pieces are not connected at all now in this proposal. So, you know, the housing component, and I'm being charitable to use the component word because I don't see it that way, but the housing dollars would pretty much be purely based on location efficiency, which almost by most affordable housing projects are going to accomplish that. So, yes, you say, well, we're modernizing. is still going to account for the goals of GHG reductions. That's mostly going to be accomplished by most affordable housing developers saying, look, we happen to be in a location-efficient place that will make transit work or walking or whatever, or it's just near jobs and other housing. But that's not breakthrough work. And then there's a separate pot of money that has been in the SGC space where the statute currently lays out, like, here's what it's for, like, in detail. And it's mostly transportation investments and some ag land preservation. But they're very specific investments. The trailer bill proposes to erase all of that and just say, you know, it's for GHD rejections and planning and efforts and activities, not the kind of capital investments in transit and biking and walking and other stuff that is in the existing statute. So that's a substantial watering down of even a divided program. But there's also no linkage between them. So, you know, the very first ASIC project to come out of the ground, to break ground, was in my own community. And it was very tightly a connection between the streetcar line on the sustainability side, if it had been split, and the housing project together. It made no sense to build a streetcar line if you weren't going to build the housing. And it made no sense to build the housing if you didn't have the transit connection. They made each other work. And so when we say to it, now we're going to split that decision up, two different agencies are going to do it. They will never talk to each other, and the projects, even if LAO gets its way, and we say, well, you can voluntarily submit an integrated proposal. We've lost the entire point of this program, which was to find at this nexus point, and instead focus on location efficiency, which will heavily advantage San Francisco and places where location is everything, But in places where actual investments have to be made in transportation and transit and walking and biking at a serious scale to enable this at all, they're going to be at a significant disadvantage. That's rural places. That's places that aren't in the center, downtown L.A., but other parts of L.A. And so I'm very concerned about that aspect of this proposal. I understand the why, but I think part of the why is because we're not making enough. We should be spending a billion dollars on the core affordable housing programs. I think the other piece of it I would just add, and then I will stop, Madam Chair, and thanks for the indulgence here, is that these are infrastructure, again, having been a mayor, and I know affordable housing project developers are very focused on their building, But Bridge Housing or whoever, they're not capable of being able to integrate the full infrastructure plan that makes these communities work. It's not possible. And so IIG, the ASIC investments like this, they are not just about that project. The reason why these investments make sense is they reduce the infrastructure cost for other projects that are not on the applicant list. And if we simply say we going to allocate we going to do it 730 and we going to allocate it on a location efficiency basis we not going to make those investments And if we don do those things that what driving up the cost of impact fees and connection fees and everything else We have to use these kind of dollars for investments that don't just advance a single project, but also reduce the cost burden, the infrastructure cost burden on all projects that are in that district. So, you know, I'm very appreciative of the Secretary and I have talked about this offline as well. And I know she's committed to all these same things. So, you know, notionally we're in the same direction. I think there are paths here. But I just want to, you know, because ASIC is, because it straddles two lines, I think sometimes we don't put the pieces together. And it's just such an important program. It is, by definition, hard. That was the point, is like, can folks come up with breakthroughs? And so it's not supposed to be something that just every single project has a lane into. It's supposed to be folks that are going to, like, be on the leading edge of innovation and infrastructure and transit. So I don't think just hard is necessarily a bad thing. And I'm very supportive of maximizing the streamlining and the connections. but keeping at the center the core purpose of the program and particularly the communities that are otherwise left behind. Thanks, Madam Chair, for the vote. Thank you, Megan Kirkby, Chief Deputy Director for HCD. I mean, I think obviously you have a lot of heart in this and I think we're probably aligned on a lot of the things you're talking about in terms of the types of future we're trying to build. But I think a few things that might be worth talking about are in caring about those climate goals, one of the things that's happening right now under the Affordable Housing Sustainable Communities Program is you are building those partnerships between affordable housing as well as broader strategies. But one of the things that's most important to me about this HDFC proposal and really bringing seven full multifamily programs together with bonds and tax credits for an effectively simultaneous award is right now, today, when we make an Affordable Housing Sustainable Communities Award on the state side, we do not control our own destiny. So that project actually cannot move forward until it has its complete financing. And so when we make that award, we're building on trust, right? We're hoping that it goes and it gets its next piece of the pie, that it can move forward towards readiness. And it makes it extremely difficult for us to hold that awardee accountable for the readiness milestones that they commit to. Because to a certain degree, their destiny is wrapped up in their next funding award. The only way we can truly be sure that we're awarding the best projects possible is to be looking at all the resources we have and be looking at all the projects at the same time and to be able to make complete financing awards that allow us to say that project now is leaving our door fully financed and it is moving to readiness. And if it does not hit those readiness dollars, we as the state get our funding back. Does not meet its readiness deadlines, then we as the state get our funding back. And absolutely there should be pathways for those projects that are ready to do their active transportation investments at exactly the same time as they trying to move forward on their housing side But I think a lot of the affordable housing sustainable communities awardees that we see we are talking about different actors with different timelines. And so I think that accountability piece is also really important in the sustainable community side of the equation as well, because you might be ready to move forward with part of the project or the bike lanes or, to your point, the really critical pre-development work that helps make additional density possible in the infrastructure work, that might be at a totally different timeline and a different actor than the dense transit-oriented development that's trying to move forward on the affordable housing side. And so I think this gives us a lot more control of our state dollars to ensure that we meet, not only meet our GHG reduction goals that are envisioned through the Affordable Housing Sustainables Communities Program, but ensure that we're able to hold our awardees accountable for those climate goals in a much more concrete way. How is accountability towards the GH goals advanced? If we fund a project and it's not able to move forward for years and years at a time, We're not getting any greenhouse gas reduction during that time. And that's a lot of lost climate benefit to the state. So I guess this is the fundamental disagreement I have, which is the notion that the housing, by its mere existence, is GGRF advancing. It's mere existence with no other. And that's why they're like striking out every single line about infrastructure investments and putting in plans and activities. And is the project meeting its GHQ goals or not? Or did it add 82 units of parking the day after it opened? And I'm sure we could talk further about this as well. But I do want to make sure that I wasn't misunderstood on that point. is in no way would the project be less greenhouse gas reducing by putting it through a one-stop shop. What we're guaranteeing is that whatever we fund, whether it's the sustainable community side or on the housing side, that it's moving right away after award, and that does not happen today because we are not able to fund that project to its completion with that award. So we sit in limbo. So no matter how great that like even if you use exactly the same criteria we use today, we don't get to start the moment that we pick that project. We have to wait for another constitutional office to make the same decision as us and say that they agree that that's the right project to fund. Under this, we are saying we are controlling our destiny. And so that great GHG project that we want to fund and we want to rank it to be the best GHG project in the world, we're saying we're giving you this award. Now you need to go. And right now we can't do that. And similarly on any other complementary investments, right now because of them being tied to each other, they're on similar timelines. And so that is a way to reduce our risk and meet our climate goals faster. Senator I also just want to add I sit on SGC and have been a part of the awards for the last two cycles And I don disagree that this is not a housing program I actually think that the combination of its intent is what makes it special and what makes it difficult for a lot of our applicants to move through the process. For example, we have not had tribal partners be able to actually access our ASIC program in the way that we want to because it requires so much complexity. We are working at it, and I think that that is another goal of integrating these programs together so that we can actually make sure that all communities who need these kinds of resources get access to them and that we are easing difficulty where we can but not diluting impact where we can. And I think that is our ultimate goal. And the other thing you were talking about in terms of our urban communities, you are right. ASIC advantages urban communities because it's often near transit. It's aligned with our climate goals. We want to make sure our rural communities are accessing ASIC. And right now, that is not as easy for our rural communities to access these kinds of programs. And so when they're coming in, securing funding in our subsidy programs, and there's an opportunity for them to access ASIC with all of its program requirements, we want to make sure that that's a streamlined process. You did make, I think, three recent awards to rural communities in my district. So look, I get this, the rationale here. The challenge, and I'm actually more concerned than I started because the, like folks that take on the complexity and that have a shot at it, If our entire mindset is everything is about how fast and how certain it is, like that's the only metric that we care about, or it's so overwhelming, then that's going to cause an affordable housing developer to say, we're proposing to meet our GHG targets by both location, and we're going to make sure that the common cooking area has a notice about how to access van pools because that's easy and nobody at the HDFC is going to say, well, we're concerned you're not going to be able to implement that. Another project that says, you know, we're going to close the gap in the bike lane network that connects this project to the major employment center, you know, a mile and a half away, they will get, but they don't control the bike lane and the funding's not fully secured for the bike lane. And so they will then not do as well in this process. That's how this sounds, is that we are putting speed and certainty uber alis without really paying attention to the stuff that makes a difference in that sustainability stuff, which is not the most, if it were the cheapest and the most certain, we wouldn't be getting there in any way. So I look forward to continuing the conversation here. I think this is a big deal, and the governor's proposal is a big one. But I think, just to reinforce one more time, if the governor would come back and say, hey, we're funding these larger programs, this would not be so high stakes that ASIC was the only money that we have. I appreciate that. I know that we should move on, but I cannot help but emphasize, I don't think that's what we're trying to communicate, that absolutely you can put GHG as a priority here. I think nothing we're trying to say communicates that that be a diminished priority. What we're asking is that all across seven different programs that have lots of unique goals, that we are asking those seven different programs to be able to look at where there's university, where there is university out universality, uh, and to, to not force, uh, the same development to go through the same process over and over again, but to maintain the spirit of each of those unique funding sources, those funding sources must go to meet the goals of those programs. We are only trying to make the goals of those program, we are trying to meet those goals faster. We are not trying to erase those goals. And so I do wanna make sure that that's clear in the goals we're trying to meet here. And just one last comment, Senator. I really believe that this is the starting point. This is gonna be an iterative process. And in my mind, currently, we have housing and homelessness dollars across 16 different departments and agencies in the state of California. This is just beginning the process to say, can we do the ones that we know are going to be consequential to making sure the construction from award to construction moves faster and cheaper? This does not mean that we don't want our HHS colleagues, we don't want our CDCR colleagues, all of the others who have much more resource, frankly, around the other places where this could be important. We want to build the table to invite those resources to be consolidated over time. So I just want to be very clear, this is not the end game. This is just the beginning of the conversation. Thanks. Okay, Senator Smallwood, questions.

The first is when I agreed to come and do this job with the governor, it was really because I've spent more than two decades in community trying to figure out how do we address our homelessness and housing crisis now. And the reason I said yes was because we actually need cabinet-level leadership in infrastructure to make sure that housing and homelessness is not an optional policy investment, that no matter who sits in the seat of governor or in the seats of legislature, that it can change depending on their interest or political interest. And so part of the design of what we're proposing is to create that permanent infrastructure so that we can think about policy over a long period of time. We can imagine what it would look like to actually fund and resource 2.5 million homes over the next decade. We've spent years trying to figure out how to help streamline those processes locally, right, so that local communities can move their developments forward. And we are not impediments to that. We're now introducing opportunities to streamline our financing system, right, that then allows those local projects to come to us and get funded in one swoop so that they are not going to multiple doors. So I offer that the infrastructure that we are trying to build with the new committee, with the new agency, seeds the opportunity for resources when they come. We know that we are in a lean budget time, and that is not a permanent fix for California. We know resources ebb and flow, but I want our state departments, our teams to be ready for if it's a dollar or a billion dollars a year. We need to make sure we are responsive to taxpayers and how we are spending those resources. I don't want to be able to tell my neighbor it's going to take you five years to get into your temporary housing unit. I want to be able to say call this number, figure out how to get connected with the assessment center, and there's a home waiting for you. And I think that's what this gives us the opportunity to do, and it costs money. So we are doing our internal advocacy. I have had this conversation with many of you that the administration has maintained its prioritization around housing and homelessness, and we know that resources inform where your priorities are. And so we are in spirit and acknowledgement that those resources are critical, but we're not waiting for them to do the work that is our job to ready the system for efficiency.

Sure. And I might have Christina give you some more detail on that. But I would be remiss not to say, you know, the governor did propose $500 million for HAP in the January budget. We recognize that there are many jurisdictions across the state who are still spending rounds three and four of HAP. We are now proposing round seven. So there are resources still. I don't want to say that the tank is completely empty. I think your point is well taken that we need ongoing supports to really realize the potential of what we're trying to do together. And I would also be remiss not to say that we are, you know, actively in partnership with our human services agency in administering our Prop 1 resources. We have $2.6 billion of those resources still being allocated and implemented. Our Home Key Plus program is still active. And so we have a new NOFA program through our MHP program. So we are not at zero. So I just want to be clear that your point is well taken that we need ongoing investment, but we also have resources still in community that need to benefit from a much more efficient and effective process. And then, Christina, if you could talk a little bit about the senator's other question. Sure, thank you.

Just to add something. So right now in the proposed trailer bill language from January, It states that if funds of private activity bonds have not been claimed by these HDFC-awarded projects by November of each year, if they haven't been claimed by November, then they can go to this general pool. And so what we're suggesting is either not say something about a 50% minimum amount every year or just move that date earlier. It could be, for example, October, August even, by August, if those monies haven't been allocated as HDFC-funded projects, then they can go to the general pool. Otherwise, you have developers waiting for these private activity bonds for projects that haven't gotten an award, and they're just waiting when everyone knows that that money's not going to be claimed in November. Thank you.

that the legislature is a wonderful body that has given us many bills before us to kind of like lead us down the path toward this single door. So the Joe Cerna Farm Worker Housing Program is one of a number of programs that under prior legislation, AB 434, was already part of this sort of pilot of being able to blend programs together, identify those sort of places where they are similar and then where they have unique attributes. And so when we refer to the multifamily super NOFA, the Joe Cerna Farmworker Housing Grant Program is one of those. The multifamily piece runs through our multifamily super NOFA programs, again, so that it can be one application and actually helps us. It really helps us actually fund better farmworker program projects that way because we're able to make the process so much easier And so that already has been blended into our multifamily supernova. It would be all of the multifamily supernova is being blended into this full complement and complete financing. So it'd be a huge benefit for that program because, again, it'll have that certainty of receiving its state funding at the same time. same time as its bonds and effectively simultaneously receiving its funds at the same time through the set aside. But TCAC and SIDLAC would still be doing the administration of those bonds and tax credits.

Sure. You know, we may want to invite our colleague from SGC to answer that. Good morning. Is this on?

my understanding is that homes have a certain lifespan, right? Like you build a home, a new home, and they could probably hold strong for about 100 years, maybe 120 years. It's also my understanding that California, the majority of homes in California were built prior to the 1970s, 1980s. Is that something that you're also kind of thinking about as some of these homes, many of these homes are becoming a lot older in terms of funding? And yeah, okay, perfect. Sorry about that. My mind is everywhere.

And you know I represent the Southern Central Valley and I see that many homes are falling apart Some don even have central heat and air Some, you know, I know in my former home, we relied on it. We relied on a swamp cooler for a very long time. And so those are real stories that people are facing across the Central Valley and other parts of California, I assume, but our region is a bit warmer, as you know, during the summer and when we talk about climate change and the impacts, I mean, it's those communities also that are being left behind and it's something I'm hoping that we don't continue to do that as we're considering this proposal and others when it comes to funding because I think they're an important piece to housing and keeping the, not only just adding, but maintaining what we already have as well. So thank you. I appreciate your answers. And I don't know if there's any additional.

Just a follow-up on the chair's question with respect to the Joe Cerna program as an example. And this is on the trailer bill itself. So the trailer bill includes new language. It's the intent of the legislature to designate the multifamily housing program as the state's primary omnibus affordable housing subsidy program to fundamentally simplify access to state housing resources, replacing today's patchwork of overlapping programs with a clearer pathway to complete financing. The administration doesn't usually care that much about intent language in the world. So what are your intentions with this language? Since it's not self-executing by itself, it doesn't do anything. Is this a placeholder for something we should be expecting and may revise? Or what is the meaning of this?

So this is purely a letter to the future? Please don't add any more?

It's not a signal that we should expect our proposal to eliminate the Jocerna program?

All right. Thanks, Madam Chair.

And we going to establish a quorum in the process Consultant can you please call the roll

Senator Smallwood-Cuevas? Present. Senator Smallville, this is present.

Great, thank you. Good morning, Chair and members. Marina Wyant. I'm the executive director of the California Debt Limit Allocation Committee, SIDLAC, and the California Tax Credit Allocation Committee, TCAC. Between those two committees, we allocate a significant amount of federal and state resources. At TCAC, we run the federal 4% and 9% tax credit program. The state, back in 1986 or 1987, augmented our federal tax credit program to add the state low-income housing tax credit program, which allows us to provide additional equity into each of the affordable housing projects that we finance each year. Just to give a little bit of context, the federal 9% tax credit provides more equity in each project, but that is limited by a formula from the federal government. So each year, based on per capita, we get a certain amount of resources to allocate. in 2025, we allocated $115 million of federal 9% LITEX. That seems like a very small number, but each project takes, each investor takes that amount over 10 years. So it's really by tenfold the amount of resources that we're leveraging of federal dollars. The 9% program, so for that $115 million, we awarded 58 projects or nearly 3,000 units using that program. HR 1 augmented the 9% tax credit program by 12% in perpetuity. What that means is for 20, by comparison, for 2026, we'll have $136 million in federal 9% LITEX available compared to that 115 that we had in 2025. But the scale is still so small when you compare it to what we can do with the 4% tax credit program. The 4% program, as was mentioned earlier, is reliant on projects receiving federal financing from our tax-exempt bond financing program. This is really just lower cost debt for projects to take on. Sometimes bonds get confused with general obligation bonds and other types of bonds. And so HR1 so prior to July 1st July 5th of last year a project needed to finance at least half of its total costs using tax bond financing provided by SIDLAC in order to access the 4 tax credit program After H 1 was passed this threshold which was referred to earlier was reduced to 25 It was important to us, as we've talked about, the program's been highly competitive since 2020 with a large pipeline of projects that have been seeking bonds and not able to move forward. So it was important to us to implement that change as quickly as possible. And we took emergency regulations in August, adopted August 5th, so just one month after the federal legislation, to implement the 25% test and also encourage awardees that had received bonds that would be able to take advantage of that 25% test to return some of their bonds that they were allocated. As a result of that program, we were able to award 195 projects, nearly over 25,000 units last year in the 4% program. That totals over $630 million of federal 4% credits. So in comparison to the 9% program, we're talking five and a half times more units produced with the 4%. And that was a result of just sort of us implementing about half of a year's worth of increase volume. In 2026, we are likely to do far more. So we, in comparison to 2024, last year we awarded 10,000 more units. So that 25,000 was 15,000 in 2024. And this year we expect to do yet another 10,000 by being able to use the 25% test over the entirety of the year. So it's a really significant change for the country, but also in particular for us in California. That being said, the 4% program provides a smaller amount of equity for each project. Many of these projects rely on additional state subsidy or local subsidy in order to be able to access the program. This is why between 2010 and 2020, the 4% or private activity bond program was undersubscribed because there was far less local resources and state resources to be able to pair with those projects. We talked a lot in the previous panel about projects that are stuck in the pipeline. Many of those projects, as Ms. Kirkabee had talked about too, they come in, they get financing from the state, and they still need more subsidy. They either need it from, if they get an ASIC award, they need additional MHP funds, or they get resources from the supernova and then are still reliant on either 9% tax credits to help fill that additional gap, or they need state tax credits to also help fill that gap. And that's where a lot of those, you know, the 44 projects that were referenced that are still waiting to get through, many of them are still, what they really need are not just the bonds and credits, but also need the state credits or other additional subsidy. Last year, with the change of the 50% test, we were able to fund every project, every new construction project that came in for an allocation that did not request state credits, right? So the pinching point now that we have far more bonds available and therefore more 4% tax credits available comes down to the subsidy that's available. And I'll just finish with, you know, we in our program, we use set asides and pools and geographic apportionments in both the 9% tax credit program and at SIDLAC. In order to lift up state priorities, it's very common. In our 9% program, we use set-asides to support rural projects. 20% of all 9% credits go to rural areas. We use it to support at-risk projects. Those are projects at risk of losing affordability. And we use them for homeless priority projects in the 9%. On the 4% side, we similarly have instituted set-asides for the last five years in our scoring system to ensure that, again, we're lifting up projects that meet top priorities. At SIDLAC, we have a set-aside for homeless assistance projects. We have a set-aside for projects that are serving extremely low-income and very low-income households, as well as a set-aside for mixed-income projects. So much of what was being discussed as part of the trailer bill is very consistent with the way we've been administering our program. We would just now, I'm jumping in, just answering some of the questions that were in the agenda. The proposal from the administration to create a set-aside for HDFC is very consistent with many of the ways we've been running our programs historically, period. And that concludes my presentation, but I'm happy to answer any questions.

No, other than just kudos to SIDLAC and TCAC for moving so fast, you know, after H.R. 1 passed to be able to adopt regulations so that the state could take advantage of all this new federal money coming down.

If I may, I actually wanted to address your question about projects at the end that was about rehabilitation projects. So mindful of sort of the focus on new construction the last few years, we've really prioritized new construction at SIDLAC. But with the 25% test this year, we set aside 20% of all of our taxes and bonds that are for multifamily projects to support the acquisition and rehabilitation of existing affordable housing projects, to give a real path for those projects to be able to remain in the system. But that's only if there's an acquisition, right? It's not if... If they're already affordable, we call it act rehab, but it's a part of that project. Okay. Yeah.

The administration has proposed nothing for the state tax credit program.

It's hard to quantify exactly sort of what that pipeline exists. Last year we had well over a million dollars of state credit requests. The year before that, two million in state credit requests for projects. So comparatively I don have a note Last year we funded 43 projects with 4 tax credits plus the state enhanced LITEX So it helps move another 40 projects that need subsidy forward.

It really ranges. So some projects come in and they only need a small amount of gap. they compete better the less gap that they need filled with the state credits. And so it really depends. We have some projects that come in and need $20 million of the $500 that's available, right? And so that can use up those resources quickly.

Thank you, Chair. Thank you, Senators. I'm Kevin Kish, Director of the Civil Rights Department. I'm joined today by our Chief Deputy Director, Jamie Gillette. The Civil Rights Department, as you know, enforces a wide range of civil rights protections in our state. We do that by investigating thousands of complaints filed with us each year, mediating and resolving as many of those disputes as we can, and litigating cases in court as a public prosecutor. We have a robust education and outreach program. We have regulatory authority. we support the Civil Rights Council and the Commission on the State of Hate and a number of other special projects. As you mentioned, Chair, we have a number of BCPs on the vote-only agenda, part of the agenda. I won't be summarizing those, but happy to answer any questions that you all may have. Instead, I will move directly to the agenda item number three and address, in broad terms, the question posed by the committee, which are changes to the federal approach to civil rights enforcement and the impact of those changes on California. I would say two major things. One is decreased or stopped funding for a number of civil rights functions at the federal level. HUD offices have closed. The Community Relations Service of the Federal Department of Justice, which is the federal counterpart of our Community Conflict Resolution Unit is shuttered And the federal government has withdrawn support from for example nonprofit fair housing organizations that help people in our communities understand their rights and enforce them I also point to changes in legal interpretations and enforcement focuses So this means that some claims are not being heard at all by our federal agencies like HUD and the EEOC. and it means that some claims are not being pursued by those agencies. So what is the impact on California? I think there are impacts to every single Californian. We all have civil rights. For our department, one major impact is caseloads. We have seen for many years the number of cases, complaints filed with us go up. What we've seen in the last year is something different. As I sat in this room at this time last year, we had 8,700 open matters. As I sit here today, we have more than 12,000. So we went over 10,000 open matters for the first time in our department's history since 1959. In the fall, we hit 11,000 at the end of last calendar year, and as I sit here today, it's over 12,000. That is an immediate direct impact that we are trying to manage in the best way we can. We have teams working overtime to process these complaints. The other impact on our department, I would say, is confusion and uncertainty in terms of our relationship with our federal partners. We are processing all of these complaints without contracts that we have historically had with EEOC and with HUD for the past 45 years. And we don't know. When it comes to the HUD contract, the state of California has sued HUD over terms that we find unacceptable in that proposed contract. We are negotiating with the EEOC. What this means for complainants is they don't know if their cases will be dual filed or not with the federal government. And what it means for us is that we don't know if we will be reimbursed for processing these cases in the way that we historically have been, again, for the past 45 years. So those are the changes and impacts that I'll focus on. Happy to take questions on this agenda item now or move on to the next one up to you all.

Thank you.

This is because, no doubt, the federal counterpart is shuttered. So we have now conducted more than 424 community engagement sessions since the launch of the program three and a half years ago. And in the first calendar year of the program, we had about 28 community meetings at the request of community members. And in the last year of the program, we've had 154. So the numbers, the requests for this type of service have gone up. The third program is our enforcement BCP from four years ago, Investigations and Conciliation Enhancement. This limited-term funding allowed us to hire 12 limited-term investigators with the goal of reducing wait times and increasing conciliations. We were able to do that, as the agenda points out. this number of positions I will say has been somewhat overwhelmed by the increase in filings as I sit here talking to you today. Our wait time to interview somebody who files a complaint with us asking for our investigation is six months. That is for us too long but that's what the numbers are looking like today. So those are my overviews of those programs. Happy to take questions from any of you about any of it.

Isabel Faircliffe, Department of Finance. Nothing to add but here to take questions.

Same with LAO, nothing to add.

Senator Smallwood-Cuevas. Thank you, and thank you for that update. And I wanna say there's no surprises there. I think when we started two years ago, 18 months ago, we anticipated that this administration, which had signaled that attacking the civil rights infrastructure of this country was priority number one, that Californians would be hurting. And the question at the time, I think we were pushing for some investment and the ways that we invested in legal services for those who are being most brutally attacked on the streets of Los Angeles to have legal support. We also felt our state civil rights agency and their partners in our counties and cities needed additional resources to deal with what we knew would be a flood of complaints. And if you're showing that these numbers are skyrocketing, those are the complaints we know about. So for every one complaint, they say there are a thousand discriminatory actions behind them. So that means our people are catching hell all over the place, whether it be on the job, in the workplace, contracting, etc. So, you know, I'm not anything to be severely disappointed, but not anything to be surprised about. And so my question, I have a couple of questions on both sides. of these on an item, you know, number three, I just wanted to get a sense of you mentioned folks working overtime. And so if you could say more about what that means and then what steps has CRD taken in response to these federal changes? What additional departmental capacities shifting? What have you done to sort of address it to make it work given the funding? and then also in these actions, and then also how does it impact the sort of elephant in the room, which we always talk about, which is our backlog. If you could just talk a little bit more about that. And then my second question on that, local fair housing organizations, other nonprofit partners who have less capacity, and I'm hearing from them in my office about their challenges. In fact, City of L.A. Civil Rights Office is, in this moment, are fighting some pretty big cases because there is an anti-civil rights tone that is emboldening very large employers as well as small employers to discriminate in massive ways. And so the city is trying to consolidate its resources to deal with the big ones. And so I'm curious, where then are Californians being directed for help if the cities are trying to consolidate to deal with the big actors and we are trying to capture all the overflow? So those are my questions there. And then, of course, I cannot understand how we would, at a time of this gross attack on civil rights and this overwhelming need in our community, be questioning whether we continue to have programs that help people report and resolve hate in California. These are not abstract programs. These programs actually tackle the problem where it happens. If someone is experiencing discrimination, there's a timely response. You know, the hate incidents, you know, we are looking at the support services that are there. We're trying to usher those services to people and making sure that we deal with any conflicts that may escalate. And so it is, what is the alternative if we get rid of our programs that tackle hate directly? What would be an alternative to that, given the scale of what the department is already dealing with? So, you know, in closing, I will just say without continued funding, Californians will be asking CRD to do more with less. And the federal government is becoming more and more escalated and sophisticated in its forms of attack on civil rights, on people of color, on all of the protected classes that we hold dear. I just we can never do this administration's work for them. And unfortunately, it's the fiscal challenges that we're facing that forces California to begin to do the work that this administration is doing which is cutting communities off from the rights of their constitution of the Civil Rights Act that protect them And I do not want to participate in that And I find it very hard to support any budget action that further threatens and enables, threatens our citizens, our residents, but also enables this kind of racist, targeted dismantling of the protections for our communities of color. for our vulnerable and protected classes. So I just, you know, there are some questions embedded in there, but it's more of a statement. And again, we're not surprised, but we also know that it's not over. And so if we're anticipating now, then when does, you know, Project 2025, Phase 2, 3, and 4, because we're only 500 days in, how do we stem this tide at the Civil Rights Department level? Thank you. A couple of responses, and I'll start with the most concrete and direct, which is how do you make this work given the increase in filings? One thing that I want to say on a broad level is a lot of what we see going on at the federal level is intended not just to remove federal protections that have existed for people for a long time, but also to make people frightened of coming forward at all. And so there is a sense in which I am heartened by the fact that Californians are turning to our state government in increasing numbers. It means that some people at least have not been cowed or deterred, and they are looking for a place to go to resolve disputes that arise in their lives, right? Everything that's happening in the world and in our country plays out in our workplaces. It plays out in our housing developments. It plays out in businesses and on the sidewalks. And a lot of people are not being cowed, and a lot of people are bringing their complaints forward more than we have ever seen. So in that sense, you know, I think we would all like to live in a world where none of these structures are necessary. But that's not the world that we live in. It's not the world that we will live in. And I am heartened by the fact that people are coming forward. I think it's also a testament to the work of our education and outreach unit in making sure that people understand that they can still come to California. One of the things that's happening at the federal level with the funding is that our local fair housing nonprofits are not permitted under new funding terms to do language access, language outreach. We are in California and we continue to do that. And so that is another way in which we're stepping in to try to fill this void or step into this breach. In terms of processing the complaints, we are doing continuous process reengineering, but our system is pretty nimble and pretty effective. We are a cloud-based filing system. Of course, we accept complaints. However, they come to us by phone, by mail. Most people file online. They are provided with an interview date. Our interview dates are connected in the cloud to our investigators calendars It is automated and the first available dates come up So in terms of technology and process re there is not a lot more for us to do than what we have done over the past years We have done some new things in response to this surge in complaints. We have for a long time been triaging at the intake level cases that appear to involve situations that really require expediting. So someone is caring for a sick or dying family member and they have been denied leave. Someone who is facing an eviction where evidence suggests that the eviction might be retaliatory. We already have been going in and pulling out those cases and prioritizing them because of the time sensitivities involved. We also now have a team of investigators. These are the ones who are doing this on overtime who are triaging cases that we don't actually think are going to result in investigations. The complaint alleges a violation of wage and hour laws or health and safety laws, or the complaint raises a dispute that doesn't appear to implicate the civil rights laws that we enforce. So a landlord-tenant dispute, for example, that doesn't implicate discrimination. So we have people going in and actually pooling these cases and talking to folks and closing out cases early that are unlikely to result in investigation if the person waits six months for an interview. So we'd rather tell these people today that they are not going to have an investigation at the Civil Rights Department, and then that in turn opens up more interview slots that those people's cases have vacated. So triaging on two levels, one cases that we think at the intake phase, which, you know, it can always change, have strong evidence of priority, that there are time or severity considerations that mean that we pull them forward and then also cases on the other end that are unlikely to result in complaints and we're trying to move those out. The six months is with that triaging, right? So if we did not have teams working overtime to pull out cases early, it would be longer, given the volumes that we're seeing. Where are Californians being directed? This is a really good question. Again, our education and outreach team has been doing really incredible work with community partners and also with other state agencies to get people to the right place. Right, to get people not just to the civil rights department, but to local perhaps city or municipal organizations or nonprofit organizations that can help them in what they have. This is kind of the point of California versus hate too when it comes to anti-hate work is getting people connected to the services that they identify as being useful to them, whether those are legal services or housing assistance or mental health counseling services or whatever it is that they decide. So we view ourselves as playing this role of connecting people to the services. One of those services is the Civil Rights Department and our complaint investigation process and our public prosecutorial role in our mediation division. But there are, as you know, hundreds and hundreds of services all around the state that we're trying to get people to. But I think that this is the crisis, right? There are increasingly few places where people can turn. And so we are trying to be the place where they can come and receive some meaningful engagement, some meaningful support. And when there are civil rights violations involved some meaningful conflict resolution and public prosecutorial action Yeah, thanks, Madam Chair. I just had a couple of, maybe just one quick question following my colleagues' excellent exposition and exploration of some of the fundamentals that we're experiencing here. And just to go to California versus hate specifically and picking up on the conversation that you were just having. So I understand in 2025 there were just under 4,000 contacts to the line, is that? In 2025 there were about 1,000 reports of hate. there were more contacts of people contacting the line who did not report a hate incident. Okay, so 4,000 contacts of which a quarter were reports of hate incidents. I'm not sure about the 4,000 number. I don't have that number. But yes, there was some number of contacts that is larger than the number of the 1,000 that were hate incidents. And then 3,000 referrals to law enforcement, to the department or elsewhere? I don't have that number. Right now I'm looking at the, I was trying to figure out from the stock background, but then 211 LA provided more. Oh, yes. 211 LA might have provided more numbers than I have sitting here today, but yes. Okay, so to your point about the triage elements, that's three times as many referrals that we're providing compared to the number of hate incidents that have been reported. And every agency that interfaces with the public, if it's any good, does its best to try to make sure everybody gets everything that they need. Of course, the tradeoff then is six months. And so are there, like, what's the level of effort or resources or investment that's required for the 2,000 non-hate incident referrals to get it? I see. So I think that, let me clarify that California versus hate is a hotline that is administered through contracts with the statewide 211. That is a separate stream from complaints that are filed with our department requesting investigations of civil rights disputes. So when it comes to the California versus hate hotline, people are connected within three minutes when they call that hotline. And then they choose whether they want to be connected with a care coordinator. This is what they're called. And then they work with that person. So that's really an immediate service. Typically, I will point out that the care coordination relationship, on average, lasts a month and a half, two months. It's not just one call, somebody reporting. It's repeated follow-up to ensure that the person is being actually connected with the services that they've identified as needing. So I don't have the two-on-one information in front of me, but the three referrals per call, what that makes me think is that people are asking for multiple different types of help, right? So somebody experiences racist flyering at a housing development. They might look for assistance in moving. They might look for mental health counseling, they might be looking for some support for their kids. And so that would be referrals made through that process. Separate and apart from that is our CRD, civil rights complaint filing process. That's the six-month timeline. So somebody says, I was discriminated at work on the basis of my disability. I want you to investigate. And we are getting to them six months from the time they make that filing. Does that clarify your question? It does. Yes, I think, and you noted the 3,000 referrals aren't 3,000 unique individuals necessarily. So it could be the, I'm just using the 211 numbers, it could be the roughly 1,000 hate cases, which then results in 3,000 referrals. Is it that, or is it, I mean, if there are, if the overall number is 4,000 contacts, I guess the question is, through the contracts, are we spending a couple months on the care coordination, even for cases that aren't determined at the outset to be hate-related? I see. I understand the question, and I don't have the answer for you, but I can take a look at that. Okay. Yeah, I mean, it's clear that the referrals alone, even to the department, without adequate resources to follow up and investigate and do all that work, that's a false promise, too. And so between fully funding the line or adding additional capacity in the department or just finding money for both or what have you, I think part of our job is trying to figure out if we're able to secure more resources for this overall effort, along the lines of what my colleague was saying, where is that best spent in terms of getting actual resolution? I appreciate that question, and it gives me the opportunity to talk briefly about our mediation program, which is where a majority of the cases that come to us resolve when they resolve. This is a very successful program. And we consistently see settlement rates over 60, 70% each month. Historically, there have been times in the department's past when cases are kind of randomly sent to mediation, right? If we have 12,000 open matters, we can only refer maybe 1,000 to mediation each year. We have 14 mediators in the state of California. That is no longer what we are doing. So to Senator Smallwood Cuevas's question and to yours, this is part of the triage, right? We're trying to identify those cases that involve the most serious civil rights violations, cases with evidence of civil rights violations, not cases that have weak or little evidence of civil rights violations, to get them into that dispute resolution process, as opposed to a case where, you know, clearly there's a dispute, but it might be a landlord-tenant dispute without elements of discrimination. So in addition to the triage at the investigation phase of the cases filed with us, we're also exercising this kind of executive function to move cases that raise weighty questions of discrimination and unfairness into dispute resolution. And then, of course, at the end of all of this, there is the decision about which cases to move forward into court, into state or federal court as lawsuits. And I just want to reiterate a point that you made and it just reminded me. I so grateful that our residents are taking advantage of the laws that we have to protect them But it is such a disservice if we don have the adequate investment and scale of response to meet that So I think we have to recognize that as the California versus hate conversation, the increase in folks accessing the agency. And we're still one of the most underfunded civil rights departments given the scale of the problem. and particularly now in the midst of this federal assault. So I just, you know, I want to say I'm glad to hear that Californians are exercising and utilizing our protections, but at the same time, if it's not funded where we can actually respond, then is it helping? And so I just want to say I appreciate that point and I wanted to reiterate. We've got to make sure that we're funding to meet the scale of the problem.

We appreciate your time. Thank you.

Good afternoon, Madam Chair and members. My name is Kyle Krause. I'm the Deputy Director of HCD's Division of Codes and Standards. Before I get into the details of the proposal, I would like to take a little bit of time to tell you a bit about HCD codes and standards, what we do, and the importance of our work. Many years ago, the legislature declared that manufactured housing both inside and outside of mobile home parks provides a safe and affordable housing option for many Californians and therefore charged charged HCD with protecting these communities and residents. The Division of Codes and Standards is responsible for enforcing a broad range of health and safety laws, regulations, and building standards across several program areas that are critically important to protect Californians. Codes and Standards acts as a statewide enforcement agency, title and registration agency, code enforcement agency, and consumer protection agency focused on ensuring minimum health and safety for mobile home parks, special occupancy parks, employee housing, factory built housing, manufactured housing, commercial modular and special purpose commercial modular units. Codes and Standards is also called upon by state and local agencies to support post disaster efforts related to mobile home units and park permits as well as registration and titling needs Okay HCD mobile home parks and special occupancy parks programs enforce statewide health and safety standards for the hundreds of thousands of residents who live in these over 4,300 mobile home park communities under HCD enforcement responsibility. HCD performs mobile home park maintenance inspections, including over 800 park-wide inspections and re-inspections, and orders correction of approximately 10,000 health and safety violations every year. Identified violations are health and safety issues, such as accumulation of rubbish, trash, and combustibles that can pose fire risk to the community. Additionally, HCD issues approximately 30,000 construction and alteration permit applications each year, and as a statewide building department for all manufactured homes, HCD protects public safety by ensuring that the structures are installed, altered, and maintained to meet established health, safety, and habitability standards. HCD's Mobile Home Assistance Center, or the MAC, as we call it, provides direct assistance to the public in handling and coordinating the resolution of complaints. In 2025, the MAC processed over 3,600 complaints, 2,000 of which were mobile home park complaints, and handled over 9,000 phone calls, intaking complaints, providing customer resources and information. Many of these complaints and investigations result in HCD issuing notices of violation that require correction of health and safety violations. HCD secures home ownership and monitors manufactured housing sales. HCD maintains ownership documents for over 690,000 mobile homes, manufactured homes, and commercial modulars. The program establishes or modifies titles of approximately 60,000 applications annually. Further, HCD promotes fair and accountable manufactured home practices by licensing 1,400 dealers and salespersons, investigating complaints and conducting place of business inspections to protect consumers throughout the home buying process. Slide three. The employee housing program ensures that privately operated housing for five or more employees is constructed, maintained, and occupied in a manner that protects residents' health, safety, and general welfare. HCD helps ensure healthy, safe, and dignified living conditions for workers by permitting and conducting 1,000 employee housing facility inspections each year. HCD also supports the production of safe, affordable homes by certifying and overseeing 230 third-party agencies and inspectors for manufactured and factory-built housing, ensuring consistent monitoring and quality control to help lower housing costs and speed construction. Slide four. To do all of this important work, HCD's funding mechanisms need to be updated. HCD's codes and standards division is funded by fees for services. However, the fee structure is outdated and many of the fees set in statute are no longer adequate to cover expenses as they have not been updated in decades HCD is requesting authority to make reasonable and incremental increases to statutory and regulatory fees to meet the expenses of providing these services I will now turn the microphone over to my colleague Matt Shuler to discuss the request and how we begin to address the projected deficit Good afternoon, Chair and members. My name is Matt Shuler. I'm the Chief Operating Officer with Housing and Community Development. As my colleague Kyle noted, codes and standards is projected to have a fiscal deficit due to the current fee structure no longer being adequate to cover expenses. Without fee increases, the fiscal deficit is approximately $3.2 million starting in fiscal year 2930, growing to $13.2 million in the following year and increasing. There is an average gap of approximately $6 million per year between revenue and expenditures, and that figure is projected to grow over time. The increase of fees proposed needs to begin in the budget year and only partially mitigates the fiscal deficit issue. The fiscal condition of deficit would move out to the fiscal year 2030-31. Without the statutory authority necessary to adjust fees, codes and standards will need to reduce the level of services that are essential to properly monitor conditions in mobile home parks to ensure that they meet minimum health and safety standards, to investigate reports of unsafe conditions, and take enforcement action as needed to correct conditions. These services play a key role in maintaining manufactured housing as a safe and affordable housing option for many Californians. This proposal would provide the following flexibility. The annual fee adjustments proposed will not be automatic. The HCD budget office and the codes and standards division will annually evaluate revenue and expenditures. HCD will only increase fees by CPI to provide adequate revenue to cover the costs of providing required services and to align with existing statutory guardrails limiting the collection of revenue. For fees set in statute, the proposal will allow HCD to make administrative fee adjustments consistent with Consumer Price Index, or CPI, starting July 1, 2026 and each year thereafter. CPI generally runs between 2 and 4%. For fees established in regulations, the proposal would allow HCD to adjust fees by CPI starting July 1, 2026 and each year thereafter using a streamlined regulatory process from the Office of Administrative Law. The proposal would increase some smaller fees up to the next whole dollar. Currently, statutory and regulatory fees are fixed whole dollar amounts and cash is accepted for fee collection. CPI increases are small enough that they would prevent HCD from increasing smaller fees, approximately $16.60 or less if CPI is at 3%, if the fees are increased only to the nearest whole dollar. Increasing fees up to the next dollar will allow HCD to make incremental increases to fees such as the $4 per lot park maintenance fee that has remained unchanged since being established in 1990. These lower dollar fees are few in number and largely non-recurring to homeowners. This would apply to seven of the 15 statutory fees that you saw on the prior slide, of which only the $4 per lot park fee is a recurring cost where 50% of the cost can be passed on to the homeowner. There are two other statutory fees under $17 paid by homeowners, but these are either one-time or infrequent fees such as permanent Foundation or the annual registration penalty. HCD has estimated the impact of CPI to increase annual recurring fees for an average size mobile home park in California, which is approximately 85 lots. The increase in recurring fees to park owners is estimated to be $217.50 per year for the average size park. and the increase in recurring fees to homeowners is estimated to be an additional $1.50 to $2.50 per year, depending on the size of the home. And again, this estimate includes the specific statutory annual mobile home park maintenance fee, currently $4 a lot, that can currently be passed in part from the mobile home park owner to the homeowner. Current statute provides that one half of that cost, up to $2 per lot, can be passed on to the homeowner. Other statutory fees affected by this proposal are generally not passed on to residents by mobile home park owners. We do actually have a copy of that example that we would like to discuss during the question and answer section, if it is helpful. But in closing, we realize that even though small, the proposed CPI increases will be impactful to mobile home park owners and mobile homeowners. This proposal was aimed at striking a balance, addressing urgent fiscal needs while keeping costs as low as possible to owners, allowing HCD to continue providing the vital services that Californians rely on and protecting manufactured housing as a stable and affordable housing resource into the future. And with that concludes our presentation. Happy to take any questions.

Yes, Blair Huxman, Department of Finance. I would just add that HCD's codes and standards division provides the necessary services to monitor conditions in mobile home parks to ensure that they meet minimum health and safety standards, investigate reports of unsafe conditions, and take enforcement action as needed to correct conditions. We at Finance reviewed the projected deficit, and we concur that this proposal is necessary to help address the fund's structural deficiencies. as many of HCD's statutory fees are no longer adequate to cover expenses. Thank you.

Thank you. We have several comments and issues for legislative consideration. On its face, the concept of pegging a fee increase to inflation seems reasonable, but some things for the legislature to be aware of. proposed trailer bill language would authorize the department to round up to the nearest whole dollar. So, for example, under the administration's proposal, a $4 mobile home park maintenance fee would increase to $5 next year, which is a 25% hike, certainly much greater than inflation. Also, as the agenda notes, it's not just one or two fees here. The proposal would give the department the power to increase dozens of fees each year, some recurring, others one time or more intermittent, but it could have this cumulative effect on park owners, mobile homeowners, mobile homeowners, manufacturers, and others. And then using that park maintenance inspection fee example again park owners could pass on some of that fee increase to the mobile home owners So that extra burden on the mobile home owners many of whom are already struggling with affordability issues Also just add that as you just heard these proposed fee increases would only partially solve these special fund, projected special fund deficits. So the legislature will want to know what other alternatives has the department thought of, kind of longer term. Are there other proposals to increase fees? What about on the expenditure side? Are there any ideas to have maybe program efficiencies or other ways, more creative ways, to try to address these fiscal deficit projections? Thank you.

So, and I appreciate the LAO's comments, and I'm just curious, for the Department of Finance, do you have any response to this question of an alternative method or structure that could be used to fund the resolve of solvency issue? especially when rounding up is actually going to probably take us above the rate of inflation. In a lot of cases, just wondering what the Department of Finance has to say about that. Yes, Blair Huxman, Department of Finance. So the proposal before you today is the result of collaboration between the Department of Finance and HCD. The proposal is being presented with a few years' notice. Without the proposal, we would project a deficit in 2029-2030. An alternative would be to do a one-time catch-up fee increase based on the last time the fees were last updated, which the administration did not pursue given the significant jump in fees from one year to the next. So this proposal solves the near-term issue while long-term solutions can be considered or discussed. And has there been any evaluation? Because, you know, in my district, when we have the mobile home communities, they are some of the most vulnerable communities in our city, in our county, and in the countries. When you look at the overall income of the residents there, has the administration evaluated what impact this increase in fees will have on those economically disadvantaged and vulnerable Californians? Yeah, thank you, Senator. Obviously, HCD is very concerned about any impact to some of our most disadvantaged community members living in some of the most affordable housing left in the state. So we have considered the overall impact and believe that the proposal that we're presenting is a step in the right direction to help balance the sensitivity of the impact with the need for increased revenue to meet operating expenses. What's the impact assessment? Because, you know, the cost of food has gone up. The cost of transportation gas has gone up. the cost of every utility, all of it has gone up. So what kind of impact assessment did you make to say that this is a hit that these residents can absorb, essentially? Well what I would say is we wanted to make sure that we were looking at what we could do minimally right in order to be able to change the financial condition So, again, right, this only pushes it out one year, right, in order to be able to continue to pursue other options, right, and based on that goal of trying to get an additional year of relief, we estimated the annual impact for the average park owner and homeowner. And again, for an average 85-lot park, it would be $217.50 in the first year of an increase. And to the average owner, it would be $1.50 to $2.50 for that year. So that's the assessment. We didn't do an assessment relative to other costs. that people have to pay because those situations are different for different individuals. But we, again, really wanted to make sure that we were, you know, able to move the needle on the financial condition, but again while, you know, being very respectful of trying to minimize that cost, that downstream cost. And for the LAO, and I would say case-by-case basis, 217, it could make the difference between I eat or I need gas in my car or whatever. And I want to say sometimes it's down to a few dollars and cents a month. That keeps a loaf of bread and some mayo can take me, but if I don't have enough for that. So I just want to say I do think, you know, I appreciate the assessment being made, But I think that we have to know that the impact is, that's a relative term, and some folks can and many cannot weather that. I will just, a question for the LAO, in terms of the risk, is acting too broadly, I'm thinking here, is acting too broadly and the risk of not acting at all if the codes and standards accounts are projected to become insolvent? And I hear the alternatives, but what is the recommendation here? Is it that we really need to go back to the drawing board and not go too broad with this? Or can we wait and not do anything right now? So I think the issue here for the legislature fundamentally is all the legislature has is trailer bill language. In February, there was proposed trailer bill language to increase these fees. That's all the legislature has. And there's no, normally, oftentimes you'd see a budget change proposal, a document that would lay out the problem, how we got here, how the state got here. What are some alternatives that are there that the administration might have considered and decided not to go forward with. But the legislature doesn't have any of that, just this trail of the language. And there's no fiscal analysis, fund analysis, that would be part of a budget change proposal. So it's really hard for the legislature to know kind of this big picture with just this trail of the language to really understand, well, what about on the spending side? And how has that grown? And why has it grown? How has that increased, you know, compared with inflation, for example, The legislature just doesn have that kind of key information All it has is this proposal that again is hard to know what are the alternatives that the legislature can really analytically look at I appreciate that, and I would also add that there wasn't data on the impact assessment, and so I agree with that and appreciate the conversation, but I think we have to be very careful about pushing folks over the brink. We know homelessness is a real thing in my county, and we know that these are communities that are so close to the brink. So I just, you know, I think this is something we have to be very careful about and have all the information that we need to make the right decision. Senator Smallwood Cuevas, can I make a point of clarification? You mentioned that the impact of $217 per year was going to impact residents. I want to make sure that you understand that was our estimated impact to the park owners per year, whereas the impact to the individual homeowners would be the $1.50 to $2.50 range per year.

And also just to clarify from my reading of the slides, we're just talking here about recurring fees, the $217. So are there other fees that are not recurring that are not part of that $217? And again, you know, just this idea about are there, is that just kind of phase one of the fee increase? And might the department have to come back in a future year to this subcommittee perhaps to ask for additional authority to raise fees even more? knowing that there's a deficit even with this fee increase in the proposed fee increase in the trailer bill language. So just a lot of questions to the legislature really to get a handle on it and understand all the different pieces to it.

Well, it's an average gap. So, right, we're projecting increased expenditures over time while revenue stays flat. So the gap grows from year to year, right, as you go further out to the right on the projection. Currently, right now, we are utilizing reserves and spending those reserves down, right? And then ultimately we arrive at a situation where we have a fiscal deficit. And then that fiscal deficit increases. So I referred to an average, but that changes. Right now, what we're looking at is smaller differences between revenue and expenditures, again, that grow over time.

Correct. So, you know, as we, you know, are in this fiscal year, right, we're anticipating total expenses of approximately 48 million with just over 44 and a half million of revenue. So that's three and a half million dollars. Yet overall, our fund balance, our fund condition is still in a position to continue to support operations. As we get to fiscal year 2930, the difference is 8.3 million, and that's where we You see that $3.1 million deficit in two of the funds that make up the budget for the division.

Because we have increases to salary and wages. We have increases to benefits. We have increases to operating expense like the fuel and electricity that is used in order for the inspectors to go out in the field and conduct the inspections. So, and again, revenue stays flat, expenditures increase. So that's why it's not just a specific dollar number for the gap. That gap is projected to increase over time.

No, it's more the latter, right? It's a lower number, right? And again, it is a projection, right, that gets adjusted, right, to actuals over time. So that was that point I was trying to make about the increases not necessarily being automatic, but rather right over time we're going to analyze those, right, and adjust accordingly. And the real intent behind the increasing to the next highest dollar is really to be able to affect change for those lower dollar fees. So a $4 fee, if we raise it 3%, that's 12 cents, right? And we don't want to be dealing with partial increments for the fees, for those low dollar fees. So again, the intent is for those fees that are currently under $17, right? Not the fees that are larger where we would be able to effectively make the CPI increase. The CPI is rarely negative and it's rarely 100%, 200%.

Well, I think it's really, again, to that point of, you know, we would be, you know, in essence, you know, unable to raise those smaller dollar fees if we didn't take that approach. And it's clear that the intent and the language really maybe aren't lining up, right? So I think, you know, it would be, I would say we would be open to discussing, like, how we might be able to refine that in order to make that more clear, right, so that everybody is aligned on, you know, ultimately the intent and the outcome.

Chair, if I may, Megan Tokenaga-Block, Department of Finance.

And just to clarify that for fees that are above the 16 and change dollar threshold, the CPI provisions would apply. As you're describing, it's for the lower dollar fees that this rounding up mechanism, the concern that you're raising applies to. And of the 24 different fees noted in the agenda, only eight of those fees are below that $16 and change threshold. So the bulk are following that normal CPI kind of pattern that you're referring to. Madam Chair, I have a very unscientific question, but you raised something that made me think about this in terms of consumer protections. Is there provisions if the $217 or so is assessed, you said, to the park owner, do they pass that cost on to?

Yes, Senator, I think that's very possible that park owners can pass any increase in operating expenses through the park. Is there language, because you were sort of making the distinction earlier, so I just want to be clear, is there language to say that that cannot happen as these proposed increases, formulas that you're putting before us? Yeah, there's only one guardrail on the fees that can be passed to the homeowners and it is that $4 per lot park maintenance fee. And the statute says that only one half of that fee can be passed on to the residents But in addition to the fees that the park owner can charge half of the MPM fee there may be other fees that impact operation of a park that can legally be passed on to tenants or those with tenancy in a mobile home park And that's another, you know, we're tying it to inflation. And this is just going to keep going. I think we would need more guardrails, too, to understand, to lay out who is actually paying these fees, especially if we're saying, you know, we're going to keep it to $1.50 to protect the renters who we know are some of the most vulnerable. and then we know we're creating another track that we know it will just be passed right on to those renters. I have some challenge, so there really isn't a distinction unless we put guardrails in, and so that's another concern that I have about this. And to take this point even further, I have many, many, many parks and communities in my district, of all kinds, different kind of ownership structures. In a lot of these communities, there are big problems with the park owners. But also in many others, the park owners themselves, they're evaluating other, they're deciding should I stay in this business or not. So even layering on fees just on park owners and think that we'll stock it to them. Those fees do get passed on, as my colleague has been saying, but also we need to be careful about the economics of these parks in the first place to make sure that we're not inadvertently saying, hey, okay, I'm going to close my park down or I'm going to sell it to some big private equity firm. We want to make sure that we're accounting for the cost structure on both. Anyway, thanks, Madam Chair.

Do you have a discrete unit that handles these responsibilities, or is it just handled by the department generally? Thank you, Senator Nilo. Yes, there are several program areas that protect the consumers, protect park residents, ensure that complaints are investigated in a timely manner. We have a specific code enforcement unit that responds to complaints as required by law. And otherwise, we have different program areas that touch mobile home park residents and park owners and operators from issuing permits to operate to the parks and monitoring the conditions within those parks and taking enforcement action against bad actors that don't take care of their parks and put residents at risk from even resident violations that we investigate during our park maintenance inspections or complaint investigations. So it's a broad approach with several program areas. And is that area within your department growing? I think I can safely say we've seen increase in workload year over year in many program areas since the recession. And why is that? I don't know if I can answer that, Senator. It's just we've seen that increase workload, especially during the pandemic. We saw an increase in the number of alteration permits that were coming into our department, our division. and who knows why but the numbers keep going up year over year At what rate are your expenses in this area increasing We've been able to add some new employee positions over the last 10 years. I think in the neighborhood of 10 positions that we didn't seek additional funding for because they're largely paid by fee for services, especially in the employee housing area, which increased 300% in that same time frame. And those permit to operate fees and fees per employee that the operator pays to HCD covers that expense. But overall, we've seen just more and more workload. We've built in efficiencies to try to mitigate that workload but by focusing on specialized program areas, I mentioned the code enforcement unit to help mitigate that. So you've had an increase of, I think you said, 10 positions in the last several years in this functional area. How many total positions do you have? We have approximately 235 positions, Senator. That's a little bit less than 5, maybe 3%. Of those, only 70 of those employees are inspectors that are out in the field statewide. So, again, in this functional area, what is the percentage increase in your overall overhead? Matt, I don't know if I can... So, in terms of... In terms of money, what's the total overhead of this particular functional area and at what percentage has it been increasing in recent years? I don't have that information off the top of my head. I have for the whole of the division, for all of the 235 employees, but we'd have to get back with you with respect to what the particular function looks like. How could we assess the effectiveness of a fee increase to cover your costs if we don't know the ability to increase fees over time if we don't know at what percentage your overhead is increasing? Well, again, we're looking at that as the entire division. So, again, I think I referenced, you know, the fact that, you know, the costs of the division are approximately $50 million a year. Again, that's variable because we are including inflation in for the projection against revenues of approximately $44.5 million a year. Perhaps that explains to LAO why the budget trailer language is just language without being specific. You're coming to us with a specific proposal to collect money from citizens and businesses without any rational justification for it other than I think I need that. So if we don't know what your overhead is, particularly the amount to which it is increasing, it's very difficult for us to acquiesce to any methodology with regard to increasing the fees that are supposed to cover that, if you understand what I'm saying. I do. So that projection does include an assumption of an increase over time. We used a 5% as the assumption for increased costs based on what we've seen on our prior experience. We did actually share the projection with staff, both the status quo and what the projection would look like, you know, should we implement this proposal and the effect that that would have, you know, on the bottom line. So...

I'm the Executive Director of 211LA. And every day we hear from Californians who are experiencing hate and don't know where to turn. A woman forced out of her home after repeated harassment, a street vendor afraid to report, a senior targeted and left unsupported. They're not alone. There was a recent study done this year that 3.1 million Californians experienced hate last year and 31% said that they couldn't get help when they needed it. That is the gap that California versus hate was built to fill. California versus hate provides safe, confidential way for people to support, to report hate and connect with real support. Through a simple call or through the online forum, individuals are connected to trained care coordinators across the state who help them access legal support, counseling and trusted community services. And it's working. In 2025 alone, nearly 4,000 people reached out for help. Over 1,000 hate incidents were reported, and 85% of those individuals who reported hate asked for ongoing care and support. This is not just reporting. This is recovery. This is trust being built in communities that have long been left out of the systems of care. But today that lifeline is at risk, and without funding California v. Hate, will end on June 30th And with it thousands of Californians will lose a safe place to turn We seen what we can do in three years imagine what we can do in six We respectfully urge you to restore funding and keep this Lifeline program in place. And Senator Cabaldon, in response to your question about referrals, there typically is multiple referrals per call, and we give referrals to anyone who calls, whether it's a hate incident or not. but most of our referrals are happening over a course of time as the care coordinators provide support over multiple weeks or months. Thank you so much.

Yes, my name is David Berry, and I'm a mobile home resident, and I'm here to urge you to vote no on this fee increase. We cannot afford it. We can't afford any fee increase. Now, how can you justify an automatic rounding up of fees on people living on fixed and modest incomes. We're already stretched to the breaking point. Our bills are, gas bills are up, our water bills are up. It's not just an administrative tweak, not to us. It's a direct hit to our livelihoods. We need relief, not more financial burdens from the state. Vote no. Thank you.

Hello, I'm Diane Pimentel, and I am a manufactured home owner, also known as mobile homes, seldomly known as trailers, but I'm here to say please vote no on the trailer bill. Well, there's more than one trailer bill, so I guess there's multiple terms for trailer, but nonetheless, I do have a question. Is there another example of a state agency raising fees and then rounding those fees up? It's a very unusual recommendation. And so I just, you've heard all the rest, so please vote no. Thank you.

Hi, my name is Susan Mills. I am here to ask you to vote no on the HCD fee increase. I live in a manufactured home too, and I am disabled and on a fixed income. When the state decides to round up or charge fees every year and adjust those fees to meet your numbers, it hurts real people, and I'm one of those. It feels like we are being targeted because we are an easy target. We are asking you to be our voice and protect our communities from this overreach. Please vote no. Thank you. Good afternoon. My name is Jennifer Boyle. I live in a senior mobile home park. Today's very important. I'm glad all of us could be here to talk to you about how we feel. I strongly oppose this autopilot fee increase. When our expenses go up, we have to cut back. We don't just get to round up our income. Why should a state agency get to do this to us? We are not a piggy bank for the HCD. We are seniors and hardworking people. We are on fixed budgets. Every dollar matters to us. It might mean a meal or prescription. Do the right thing please. Vote no. Good afternoon Madam Chair Senators My name is Sylvia I am a new mobile home owner and I am asking you to stop the HCD fee increase I chose mobile home because it was supposed to be affordable. Now the state wants to nickel and dime me with fees that round up automatically? Where does it end? I don't have the luxury of rounding up my bank account. Don't let a state agency balance its budget on the backs of seniors. Vote no, please. Thank you. Hello, my name is Lorraine and I'm a mobile home owner and a resident and this proposed fee is completely unacceptable. You cannot place fee increases on autopilot without any guardrails and expect us to pay them quietly. We are facing rising costs at every corner, and you understand that. And this proposal lacks basic fairness and HCD accountability. If you truly care about California homeowners, you will reject this proposal, and please vote no. Thank you. Hello, Chair and members of the committee. My name is Tran Nguyen with Family Resource Center and 211 San Joaquin. We provide care coordination services to victims of hate through the California vs. Hate hotline. The people we serve through California vs. Hate are traumatized by the experience of being targeted with hate and deserve a safe place to call and get help. For example, Sarah, who called to report that she was attacked because of her race, She was struggling with mental health, firing a police report, victim assistance, and legal counseling. She worked with a care coordinator for 14 weeks that connected her with the district attorney and the Civil Rights Department. But before calling the hotline, she had nowhere to call for help. There are so many people like Sarah that need a place to call for trauma-informed support and care coordination. I ask the committee to restore funding for reporting hate and supporting victims of hate acts in the Civil Rights Department budget. Thank you. Kasha Hunt here with Political Solutions on behalf of 211 California. We also are here to ask the committee to restore funding for the California vs. Hate program. through the network of 211 providers, people who have experienced acts of hate, have a safe place to call, report the hate, and then be connected to any type of support they need. This support is unique because California versus hate care coordinators receive extensive cultural competency and trauma-informed care training so that they can be effective and to sensitively serve their members. With 211 referral and service navigation expertise, they're able to assess comprehensive needs and connect them to appropriate resources and also to collaborate on cases with partner organizations. This program is a critical front door to restorative justice and victim supports for people who have experienced hate and we ask that you restore the funding. Thank you. Hello, Yuval Berenstein here on behalf of the Anti-Defamation League here in strong support for the California vs. Hate hotline. We are a century-old anti-hate organization and we work closely with this organization to make sure that people understand what is the rise of hate that we are seeing and help respond to that hate. Please restore the name of the Funding, thank you. Good afternoon, Chair. Rebecca Marcus on behalf of American Farmland Trust and the California Climate and Ag Network speaking on item one. While we are neutral on the proposal to move the affordable housing portion of ASIC out of the purview of the SGC, we are concerned that the Sustainable Ag Lands Conservation or Salk program will become a victim of this transfer. Since the inception of ASIC, Salk has received an average of $100 million annually and consistently delivered strong returns. It is the third most cost-effective greenhouse gas reduction program funded through GGRF and accounts for approximately 15% of total GGRF emissions reductions, despite historically receiving only about 2% of total funding. Salk supports farmers of all types, including multi-generational operations, beginning and veteran farmers, and tribal producers. We urge the committee to ensure that Salk continues to receive at least $90 million annually, whether the affordable housing appropriation gets moved or not. Thank you.

Chair, Senators, my name is Tim Porteous. I am from Petaluma, California. I am in a mobile home. I am 68. I am disabled. My rent and my mortgage are higher than what I get with Social Security every month. this is bad I strongly oppose the HCD's plan to raise our fees and put them in an autopilot system many of my neighbors and myself are elderly and terrified of losing their homes a few dollars here now this is a million and a half people and there might seem insignificant to a state agency but to us it's devastating We rely on you to protect us from the unfair policies that come at us from these kinds of things. We should not even be here today appealing, unbegging, hoping that this part of our government is not going to hurt us by supporting them. but we are here. Some of us hurt for it. Please vote no. I don't know how I can tell you strong enough but I thought I heard this fellow say that there were 24 fees and they won them up at $17. They're talking about one of them. Thank you.

Good afternoon, Chair and Senators. I'm Carol Kahn, Executive Director of Project Sentinel. We're a 50-year-old fair housing agency operating in the Bay Area, Sacramento, and the Central Valley. I'm here to support the budget requests for CRD, as well as Senator Weiner's budget requests of $10 million for fair housing. I want to highlight our vital partnership with CRD to fight housing discrimination in California. Our trusted advocacy at the local level is critical. Collectively, our agencies investigate discrimination complaints, gather evidence through testing and refer cases to the CRD for fair housing enforcement. I'm also here representing 13 fair housing agencies statewide who have experienced enormous impediments because of recent changes in federal policy My colleagues will echo their support because without state funding discrimination complaints under California law will go uninvestigated and critical fair housing outreach and education will be lost especially for non speakers immigrants the LGBT community housing voucher holders and vulnerable communities at heightened risk of homelessness Thank you Thank you. Hello, I'm Carolyn Petey with Fair Housing Advocates of Northern California and San Rafael. My colleague Carol spoke of our critical partnership with CRD. They offer strong mediation and support enforcement, while local fair housing agencies like ours conduct investigations, vet discrimination complaints, so CRD is not overrun. Despite our state's strong fair housing laws, There's no state funding for our fair housing. Within the past year, the federal government has canceled our contracts, delayed our funding, and most recently forbidden us from conducting any work enforcing California's expanded fair housing laws. So that means no fair housing counseling or enforcement for LGBTQ plus folks, immigrants, or housing choice voucher holders. HUD also prohibits us from doing any work related to disparate impact, systemic investigations, or appraisal discrimination and redlining investigations. The fair housing infrastructure across the state and the country is crumbling. Senator Wiener's budget request for $10 million is coming in just in time, so I hope you will support both CRD and the senator's ask. Thank you very much for your time.

Hello, I'm Dulce Perez with California Rural Legal Assistance. We serve communities across the state from the border, through the Central Valley, Central Coast, Northern California, and the Imperial Valley. Many of whom are among the most vulnerable, farm workers, indigenous populations, LGBTQ individuals, seniors, veterans, unhoused individuals, and families relying on Section 8. These are folks that do not trust the government. They trust their local fair housing centers. Our ability to provide fair housing services is limited by HUD's restrictions that prevent us from offering materials in languages other than English. This creates real barriers for the communities we serve, especially when they face discrimination based on language, immigration status, or source of income. Just as critical is our ability to conduct fair housing testing, one of the most effective tools to investigate and identify and prove housing discrimination. Over 8,000 complaints were filed in 2024. That's the highest in the nation. Those most impacted are the communities we serve, and they're at the greatest risk of housing stability and homelessness. I respectfully ask for your support of both CRDs for housing work and Senator Scott Wiener's budget request. Thank you.

Good afternoon. Prevention saves costs and stabilizes communities. I am Janice Roots with the Fair Housing Council of Riverside County. I would like to underscore how important the fair housing investigations and testings that organizations like ours provide. It's a cost-effective prevention strategy. There are 13 fair housing councils across the state that provide testing, investigation, education, and dispute resolution that stops discrimination early, stabilizes tenancies, and prevents eviction. The evidence we provide through fair housing testing is often the only way to prove discrimination has occurred. This work directly supports the state's goals by reducing displacement and easing pressure on California already stressed infrastructure for the unhoused Every prevented eviction or resolved housing discrimination case represents both a human and fiscal win General estimates show that each dollar of funding provided yields two to five dollars in outcomes that otherwise would cost the state and homelessness and related services. I hope you'll support both CRD's fair housing work and Senator Wiener's $10 million budget request. Thank you.

Good afternoon. My name is Gonzalo Miscua. I'm a housing attorney at Bay Area Legal Aid. I'm also a fair housing project coordinator at Bay Area Legal Aid in our NAPA office. We are here to support CRD's budget and Senator Wiener's budget ask of $10 million. This will allow us to advocate for our clients. organizations that support fair housing efforts, including Bay Area Legal Aid, are all potentially facing severe financial challenges due to the delays in federal funding. These disruptions can lead to the staff layoffs and can raise serious concerns about the ability to meet upcoming payroll obligations. Without timely and reliable funding, the capacity of these fair housing organizations to serve communities is at risk. California is making historic investments to expand housing and address homelessness. But without sustained funding for fair housing enforcement, those investments are undermined. Discrimination continues to block access and push people out of housing. At a time of federal uncertainty, it is crucial that the state fully integrate fair housing into its strategy. This is how we ensure equity. This is how we ensure maximizing impact and how we make the housing system work for everyone. Thank you, and please support Fair Housing. Good afternoon. My name is Audrey Perreault. I'm a resident of Stockton, and I'm also the co-executive director of Fair Housing Advocates of Northern California. I, too, support Senator Weiner's requests for $10 million for Fair Housing and the CRD budget. I have brought with me today testimonials from clients as well as the organizations that we represent with this funding request. And I hope that you will support fair housing. Thank you.

Hello. Good afternoon. My name is Akilah Williams. I'm a fair housing coordinator with Project Sentinel. I live in Woodland, California, and I personally serve both the greater Sacramento region and Yolo County. Fair housing work is essential to keeping people housed, protected, and stable. When fair housing is underfunded, discrimination goes unchecked, and housing stability becomes a privilege, not a right. I support Senator Weiner's budget proposal and urge you to continue investing in fair housing. Thank you. Good afternoon. I'm Savannah Wheeler. I'm a resident of San Francisco and an attorney with Fair Housing Advocates of Northern California. I, too, support Senator Weiner's request for fair housing funding. It will allow us to help clients like mine, who is fleeing domestic violence and denied housing due to using emergency rental assistance, and she experienced homelessness as a result. We won't be able to help many clients like her if we have to continue to rely on federal funding. Thank you. Good afternoon, my name is Joanna Navarro, and I'm a fair housing attorney with Project Sentinel and a Sacramento resident. I fully support Senator Wiener's budget proposal and I respectfully request your support for fair housing Thank you Thank you Good afternoon My name is Brian Williams I the Executive Director for the Fair Housing Council of Central California I drove up from Fresno today. Thank you for having me. I, too, support Senator Weiner's request for fair housing funding. The delays in federal funding have had a devastating effect on our office, particularly. I represent a large constituent of folks of 35 counties, and there are five of us servicing that county representing the Fair Housing Council. I had to lay off all four of my team members, so I alone, until the funding kicks in, am representing 35 counties as it pertains to fair housing. So please, please do your part. Thank you.

Good afternoon, A.J. Johnson with John Burton Advocates for Youth. Thank you to the Senate for your plan that would include both revenue generation and two rounds of HAP. We appreciate that. We are here to support an $80 million ongoing request that would be a youth homelessness funding guarantee in the budget and would appreciate the Senate's support with that. Thank you.

Good afternoon. and Kim Lewis representing the California Coalition for Youth and appreciate your chair's comments this morning around the framework that the Senate has put forward. We are very grateful for the HAP funding to bring it up to a billion dollars in the round seven and for round eight. We'd love to get to a place where we can have ongoing dollars for this so we don't have to continue to fight for this and support increasing every amount of investment towards our young people because we know this is the best way to really solve the problem in the long run. And as we're talking about housing and building affordable housing, we need housing for our young people. We need transitional housing And so any sort of housing bond or discussion on that needs to have resources dedicated for our youth and those service providers who are working directly with our young people to be able to create that housing as well. Thank you.

Good afternoon. Craig Pulser on behalf of Equality California. Here today in support of continued funding for the California vs. Hate program. Over the past three years, this program has become a critical lifeline, not only helping people report hate crimes and hate incidents, but also connecting them with critical support and resources. and this is especially important for LGBTQ folks, especially members of the transgender community who are facing increasing violence and hate across the country. And without action from the legislature, this program will expire at the end of June. So respectfully urge the legislature to restore funding for this critical program. Thank you.

Good afternoon, Madam Chair and members. Raymond Contreras with Lighthouse Public Affairs. I have two. versus on behalf of SPUR, a public policy think tank out of the Bay Area in support of the governor's housing proposal. This proposal is about making California financing system actually work so projects can move forward to construction faster. Right now, the fragmentation across programs creates slow delivery and drives up costs. We know that the current system is inefficient and tens of thousands of dollars per unit are spent annually when these projects are halted. The proposal aligns with bonds, tax credits, and programs like AHSC so deeply affordable projects can actually move forward. Bottom line, this is practical proven approach to reduce delays, cut costs, and deliver more housing faster to California. And my second one is on behalf of San Diego Housing Commission and Los Angeles County Housing Solutions Agency. We respectfully request the support of the 32 million one time investment in California's regional housing financing authorities. by Senator Araguin to help build regional capacity to innovate and better deliver renter protections and homeless prevention programs. This targeted investment will maximize impacts and deliver results across Southern California. We respectfully urge your support on this budget. Thank you. First of all, thank you for hanging in there. I know it's been a long day for you all and I will be brief. My name is Jenna Abbott. I'm the executive director for the California Council for affordable housing and I'm here to comment on item number one this morning. Our organization represents the full ecosystem of affordable housing industry, including lenders, developers, syndicators, everything that goes with it. First and foremost, I want you to know that we support...

I want you to know that our association supports the long-term goal of creating a true one-stop shop. We appreciate the time that the LAO spent preparing the analysis. they have raised some excellent questions about proposed exemptions from open meeting requirements and the composition of the HDFC, among others, that really deserve your answers. While there are several components of the trailer bill that we find promising, the proposal to allocate no less than 50% of the state's bond cap to be available only to HDFC projects represents a substantial departure from the existing process that affordable houses depend upon to assemble the capital stack. Redirecting such a large share of the bond authority to a new and untested entity introduces uncertainty and risk. From our perspective, HDFC should be afforded time to become fully operational and demonstrate readiness before assuming any share, let alone a significant share of the bond cap authority. We urge consideration of an alternative approach that preserves the certainty and predictability that currently exists with SEDLAC and TCAC. Developers depend upon this to move projects forward. Like the LAO, we recommend a needs-based framework to guide any future allocation of bond cap between SEDLAC and HDFC rather than establishing a fixed minimum allocation at the outset. We also strongly recommend a reporting requirement to assess how any changes that might be adopted work over time with the option to tweak as necessary. We have submitted a letter for the record for outlining our concerns and offering these recommended alternatives, and we look forward to working with you and continuing engagement with the administration. Thank you so much.

Good afternoon, Madam Chair. Clifton Wilson on behalf of the San Francisco Mayor's Office of Housing and Community Development in support of the budget trailer bill provisions relating to allocating at a minimum 50% of tax-exempt private activity bond to the HDFC as well as streamlining the AHSC program. Thank you.

Good afternoon. My name is Michelle Moaning. I'm a mobile homeowner at a nice park in Roseville. I'm here in opposition to HCD's increased proposals. My park was 42 years as a private owned. It was sold five years ago to a predatory investment company out of state. And in those five years, my space rent has increased 30%, 3-0%. It's not affordable anymore, and any increase, it hurts the bottom line. Thank you. Thank you so much. Good afternoon. My name is Roger Johnson. I'm the chairman of the Sacramento Area Coalition of Mobile Home Associations. And we're all homeowners, and we're all feeling the pinch, and we are all opposed to the fee increases suggested by HCD. And as you had mentioned, Madam Chair, the audit that was done had nothing to do with budgets, and it certainly could use one. Secondarily all those fees find their way down to us and our affordable housing our seniors our veterans our immigrants people living on fixed incomes are seriously in harm today And as the nation has noticed, the newest group of homeless people are seniors and veterans like myself. We need your help. We will feel those fees one way or the other directly or indirectly. And lastly, discussing with other folks, wondering how and why a budget subcommittee got to listen to fees that would directly affect us and the park owners who would pass them on to us when they're not affecting the state budget. Thank you so much for listening. We appreciate your time. Thank you. Good afternoon. Blackburn here on behalf of the San Diego Association of Governments or SANDAG as well as MTC-ABAG and SCAG, the three largest MPOs in the state, here in support of efforts to modernize affordable housing and sustainable communities program, including the creation of a sustainable communities implementation program to provide formal funding to MPOs on an annual basis for projects and programs that accelerate progress towards SES GHG targets consistent with the successful REAP1 and REAP2 programs. MPOs are best positioned to use this funding to help the state deliver on its ambitious climate, housing, and transportation infrastructure goals. Thank you. Good afternoon, Chair. Natalie Spivak with Housing California. On behalf of our budget coalition of 103 affordable housing, homelessness, and tenant protection organizations, I want to say thank you for the Senate's budget framework, which recognizes that when it comes to housing low-income Californians, Californians, there's no substitute for investing in proven programs. We encourage the Senate to hold the line on the named programs and also fund the Portfolio Reinvestment Program, the CERNA Farmworker Program, and the Homeless Housing Rescue Fund. Funding these programs is even more important given CARB's recent proposals that would significantly cut or zero out the ASIC program, which is the state's only ongoing and largest source of funding for affordable housing. On behalf of Just Housing California, we support the trailer bill proposal to automatically allocate at least half of bonds to HDFC projects, which will reduce the time and cost of building affordable housing and ensure that future political shifts won't lead us back to a fragmented system. But it's critical that state tax credits and 9% credits can be paired with HDFC projects. Otherwise, there will be a net loss of funding for deeply affordable projects. We also support splitting the ASIC program, which will reduce time and cost and ensure that ASIC projects can benefit from HDFC streamlining. Thank you. Thank you. Good afternoon, Chair. Thank you so much for allowing us the opportunity to speak. My name is Tysha Watts on behalf of the California Housing Partnership. We echo the sentiments of Housing California and really want to give thanks to the Senate for course correcting a lot of the funding that we were unable to see and the governor's proposed budget. Specifically, we're asking to maintain funding for the multifamily housing program and ensuring that we also invest funding for the portfolio reinvestment program and our state LIHTC program. And in regards to the trailer bill language, we are supportive of the trailer bill language to allocate 50% of bonds to the new HDFC. We think this is a great direction for us to be able to get to a one-stop shop where we're able to ensure that projects who are in the pipeline are able to finally come to fruition so that we have enough affordable housing for many Californians. We are also encouraged by the split for the ASIC program. The ASIC program is one of our flagship programs for how we able to produce affordable housing So we wanna ensure that that program is intact and that we recommend maintaining geographic equity cap and investing in priorities like GHG emission reductions and the program But lastly, as we move forward to this one-stop shop, we need to ensure that we have the resources to sustain it. So the trailer bill did not mention 9% tax credits. We are recommending that a portion of those tax credits go to the new HDFC so that those who need subsidy can go through the door of HDFC and those who don't can still be able to receive tax credits due to sit lack. Thank you so much. Thank you. Good afternoon. Debbie Aracel with Habitat for Humanity California, and I'm here representing our Habitat statewide that make affordable homeownership possible in 42 counties. And first, on behalf of Habitat, I want to express our appreciation for the Senate leadership's priorities, investments including CalHome for affordable homeownership, production and home preservation, We applaud the Senate's vision to maintain effective housing investments across the continuum from homelessness services to affordable home ownership, including CalHOME. Recognizing that affordable home ownership supply must be part of California's comprehensive housing solution. Investing in CalHOME also serves as a preventative measure securing long-term stability and housing justice for California families. We urge the Senate to continue to prioritize the CalHome program because it works. It's the number one financial tool that Habitat for Humanity uses in rural and urban communities statewide. It comes with accountability and it is highly leveraged with private dollars. And we're able to use this to build and preserve entry-level ownership homes. And the funding is gone. I know there was discussion this morning about funding being in the community and building, and that is true. However, all of the funding from the last round of CalHOME is gone. So without an inclusion in the budget, there will not be another round of funding for CalHOME, which leaves hundreds of homes in the pipeline. Thank you for prioritizing CalHOME, the primary program that builds homes, providing permanent solution for housing affordability for California families. Thank you. Thank you. Good afternoon. My name is Holden Weisman. I'm Director of Policy and Advocacy for Habitat for Humanity Greater San Francisco. So our service area covers the counties of Marin, San Francisco, and San Mateo, three of the most expensive counties in the state. And you may wonder how we're even able to build habitat homes in such expensive environments, and that is CalHome. It is a huge subsidy to us to be able to not only build, produce new homes, but participate in home preservation programs. and we also get a significant amount of funds that help us help our families through mortgage assistance programs that brings down the per unit cost of our homes and makes it possible for us to continue to sell our homes to homeowners and keep their mortgage rates at or below 30% of their monthly incomes. Just an example of it, CalHome also is a great, as the previous speaker mentioned, Cal Home is a great way for us to leverage other dollars as well. We had one project in San Francisco itself that produced eight units of ownership housing. We received $4 million in Cal Home that also unlocked $4 million in philanthropy to help us produce those eight units of housing in a very expensive and very nice area of San Francisco. So we really do appreciate the funds that we have. Cal Home is currently out of funds we need to be able to rely on these kinds of funds to make it possible for us to even consider whether or not some of our projects can move forward So I currently I encourage you to please make sure that $500 million for Calhoun stays in the budget. Thank you. Thank you. Good afternoon, committee members. My name is Pat Rickett. I am here representing Habitat for Humanity East Bay, Silicon Valley. I'd like to start by echoing the sentiments of my fellow Habitat colleagues for including CalHOME in the budget discussions. I am here to strongly urge the committee to commit a $500 million allocation for CalHOME in the upcoming state budget. CalHOME has a significant and direct impact in our service area of Alameda, Contra Costa, and Santa Clara counties. Right now, CalHOME funding is building 10 new affordable homes in Hayward and will soon build 19 in Walnut Creek and another 15 in Santa Clara, all while repairing and preserving homes throughout our region. CalHome funding is incredibly important to our work and allows our affiliate to increase the number of Bay Area families that we can serve. Please ensure that CalHome can continue opening doors of opportunity for your constituents as well. Thank you. Thank you so much. Good afternoon. My name is Alex Regala. I'm with Midpen Housing. We're a nonprofit affordable housing developer, property manager, services provider working in the Greater Bay Area and Central Coast. I want to echo my colleagues in expressing our appreciation for the Senate's budget proposal, the reverse proposed cuts to housing and homelessness programs, urge our support for the housing bond on the November ballot, and also express our support for the trailer bills. As a developer, we're constantly strategizing to choose the best financing pathways for our projects and assessing the risk that each path poses. This system currently is unpredictable, it's costly, full of unexpected delays, and it ultimately leads to fewer homes created. For example, we had a project in East Palo Alto that took nearly four years to secure all eight sources of public funding and big infrastructure construction. During these four years, which included the high inflation we saw during COVID, project costs increased 28%. This is why we're excited about this once-in-a-generation opportunity to rationalize the system and get us closer to a coordinated one-stop-shop model. For this new model to be successful, it's critical that HDFC have adequate resources to work with so we don't introduce new bottlenecks to the system and slow projects down in our pipeline that have high public benefits. Thank you so much. Good afternoon. I'm Becky Flores with Mercy Housing California. We are a nonprofit developer with offices in San Francisco, LA, and Sacramento. We've developed nearly 13,000 affordable homes in California. And I just wanted to express our support for setting a maximum possible allocation of tax-exempt bonds to affordable rental housing. We're also supportive of a predictable HDSC set-aside of 4% and state credits, which still allows a meaningful pathway for non-HDFC and locally funded projects. We believe that an earlier reallocation date of August 1st versus November 1st would be helpful to ensuring an effective process. We would also like to see the 9% program remain under TCAC at least until we can gain some experience with this new organizational structure. In addition, we're supportive of the proposal to bifurcate the housing and sustainable communities components of the AHSC program. In addition, we urge you to also pursue steps to maximize resources for affordable housing by reversing the proposed cuts to housing programs in the budget and voting to place the housing bond on November's ballot as soon as possible. Thank you. Good afternoon. My name is Benjamin Henderson, and I am a housing policy advocate with the Western Center on Law and Poverty. And in my work with communities across California, I constantly see affordable housing developments that are ready to move forward but are stalled simply because of the financing gap has not been filled. Programs like the state low-income housing tax credit are essential tools that make these developments financially viable. So I encourage the Senate to also fund the portfolio reinvestment program, the CERNAL farm worker program, and the homelessness housing rescue fund because it's not just about building housing, it's about preventing homelessness, stabilizing communities, and ensuring that California works for everyone. Thank you. Thank you. Good afternoon, Marina Espinoza with the California Housing Consortium. I'd like to echo my colleagues' comments about the need for funding for housing programs, including the low income housing tax credit program and the multi-family housing program. We appreciate the Senate's budget plan. On issue number one, we support the concept of a one stop shop and there's a lot that we like in the trailer bill. However, we have some concerns and suggested changes to it to ensure that maximum flexibility can be retained under the new system. And those suggestions are detailed in the letter that we submitted to the committee. I think it's also important to note that CARB's proposed regulations for cap and invest would reduce the amount of funding available for AHSC and funding for that program is critical for the success of the new system that has been proposed by the administration. We look forward to continuing discussions with you as budget discussions continue. Thank you. Thank you. Good afternoon, Madam Chair. Graciela Castillo-Krengs here on behalf of Enterprise Community Partners. First of all, I wanted to say thank you so much for the Senate for upholding kind of one of the priorities in funding housing in your proposed budget framework. On item one, we want to express our strong support for the state's effort to streamline and better coordinate the way affordable housing and homelessness prevention and intervention is funded through the new California Housing and Homelessness Agency. This one stop shop will efficiently help us deal more holistically with how the programs are integrated, how the funding is braided, and will produce additional housing. I'd also like to echo a lot of the comments that my colleagues before me have mentioned about how resources is a critical ensuring that we continue to fund the pipeline for housing. And we want to make sure that that is something that the Senate continues to prioritize. We look forward to working with you and your staff to achieve some of the program details and kind of finalizing some of the conversations that are going on. And lastly, I also want to just bring up that the proposal that the CARB is currently considering on how cap and invest funding would actually be allocated is very problematic And we have concerns about how tier three would not be funding it in particularly some of the housing dollars that are critical Thank you so much Good afternoon chair members Chris Lee here on behalf of the Sacramento Area Council of Governments. On issue one is related to the governor's proposed affordable housing and sustainable communities trailer bill. We support the proposal to align that sustainable communities funding with regional projects that implement the sustainable community strategy. We think that housing and transportation integration is one of the core parts of the sustainable community strategy planning process, and we can leverage that work to direct those projects to priorities that will really get funding into communities and get housing that helps achieve our climate and equity goals. And so we join with our colleagues from other metropolitan and planning organizations in encouraging that funding to be tied tighter to the SCS through an SCS implementation program. And a way to ensure geographic equity would be to formulaically allocate that out through MPOs across the state to ensure that rural and urban regions also benefit. So thank you. Good afternoon. Harrison Linder with Leading Age California. I want to start by thanking the Senate for its strong plan for funding housing and homelessness programs. and encourage it to not waver in its negotiations with the governor on these. In particular, the Low-Income Housing Tax Credit Program, the Multifamily Housing Program, and HAP, these are essential tools for addressing California's housing and homelessness crisis, which disproportionately impacts older Californians. State LIHTC investments continue to drive affordable housing production as well as preservation and leverage significant federal resources. The multifamily housing program provides critical gap financing to reach extremely low income older adults who, as we've heard throughout testimony, often do not have the opportunity to increase their income like younger households. And consistent funding for HAP is essential to support local homelessness responses and avoid service disruptions. While the most recent point in time count does show an overall decrease in homelessness, the number for older adults does continue to go up. So we just urge that the Senate continue to focus on this vulnerable population. Thank you. Good afternoon. J.T. Herchmack with the Nonprofit Housing Association of Northern California. We represent nonprofit developers across the nine counties of the San Francisco Bay Area. I want to make three points. First, I wanted to express my support for the first item up today, the trailer bills and the governor's proposal for the new agency. We are in strong support of the changes to ASIC and to move the private activity bonds over to the HDFC. We're in support of a technical and objective measure to redistribute those bonds if there is ever insufficient funding at HDFC to ensure that the pipeline continues moving. And my second point, I would like to thank the Senate for all of the support that they have already given on funding housing in the budget this year. This new agency will not be successful without robust funding in the budget, and as well as support for the housing bond. Third I like to support the comments previously about our concerns about the CARD proposal affecting the ASIC program and how that might cascade through the overall housing landscape Thank you Good afternoon I Emily Weinstein Director of Housing and Community Development for the City of Oakland I'm speaking today on behalf of the City of Oakland and carrying a message from our Mayor, Barbara Lee. We want to thank the Senate for their budget proposal, specifically for the support for HAP and affordable housing. We also strongly support the governor's trailer bill that streamlines housing finance through the Housing Development and Finance Committee and urge you to provide the funding resources that will make it a true one-stop funding shop. The City of Oakland has been a committed partner with the state on creating housing for all income levels. Currently, we have 1,600 affordable units in construction or about to break ground, over half of which are for homeless exits. But we have seen up front the impact of a fragmented state financing system. Oakland still has over 15 projects in our budget pipeline waiting to build their capital stack and many of them circling year after year. I'm here to say that the proposed HDFC has the potential to be transformative for cities like Oakland. In particular, we support the proposed 90% tax-exempt bond set-aside for affordable housing and ensuring that at least 50% of this set-aside is administered through HDFC. HDFC must also receive award authority for at least 50% of 9% tax credits and 70% of ASIC. Resources must be streamlined and unapproved for the HDFC. Otherwise, the one-stop funding shop will be in name only. The potential for the HDFC is huge. This is about speed, certainty, and scale. If California is serious about addressing its housing crisis, we need both the reorganization and the funding resources to make it work. Thank you very much for your time. Thank you. Good afternoon. I was just remembering our conversation from like 15 years ago in the Starbucks in Selma or Sanger. I can't remember which city. It's always stayed with me. So good afternoon, Senator. It's really nice to see you again. I am Preston Prince with the Santa Clara County Housing Authority. I'm here on behalf of the California Association of Housing Authorities and our strong support for the proposal to streamline California's housing finance system. The approximately 90 housing authorities who make up Caja are the backbone of affordable housing delivery in our respective communities, engaging across the housing ecosystem with a holistic view of community development. CAHAS supports the one-stop-shop alignment, including the 90% floor for bonds designated for affordable housing development and at least 50% of those bonds allocated to the new HDFC. Bringing HSC's affordable housing funds under the new HDFC will allow the state to focus on effective housing strategies and deliver affordable housing in ways that meet environmental transportation and community development goals. Thank you. Thank you. Good to see you. Good afternoon, Louis Brown with the Corporation for Supportive Housing. As a lender for the development of supportive housing, we'd like to express support for streamlining affordable housing financing through HDFC. We also like to express support for the trailer bill proposal to set aside 50 at least half of private activity bonds for two HDFC projects We'd also like to thank the Senate for proposing significant investments in affordable housing programs, as well as the Homeless Housing Assistance and Prevention Program. While we know there's a long way to go in the budget process, We have heard from homeless service providers already that they're relieved to see a billion dollars in this year's budget for HAP 7 and a promise of more funding for HAP 8 in next year's budget. So we'd just like to appreciate the Senate for proposing those investments and look forward to educating the public about the Foundation for the Future plan. Thank you. Thank you so much. Good afternoon. Danielle Bradley on behalf of the California State Association of Counties. CSAC is in strong support of the Senate budget plan to fund the HAP program at $1 billion for the next two years and want to thank the subcommittee for prioritizing this funding. This program is an essential component of our collective efforts to address homelessness and as well as the recent successes made. Counties are committed to using HAP funding urgently, effectively, and with accountability to meet the needs of our communities, and CSAC continues to advocate for Round 7 to be implemented in a simplified manner that will allow funding to be distributed by the September 1st, 2026 state. Thank you. Thank you. Good afternoon, Chair and Staff. Vincenzo Caporelli here on behalf of the California Association of Councils of Governments, whose membership includes the 18 MPOs in the state. Like many of our MPO members who spoke previously, I'm here to express our support for the governor's effort to modernize the ASIC program through his proposed split. We especially appreciate that the proposal includes requirements to incorporate regional priorities in the sustainable communities allocation of the program. As we have seen in success of REAP2, regional governments and the sustainable community strategies they produce are key to making progress towards states' climate, housing, and transportation goals. Thank you. Thank you.

And with that, the Senate Committee on State Administration General Government is now adjourned.