Budget Cuts Threaten Critical Housing and Homelessness Programs Just as the Housing Affordability Crisis Peaks
Housing costs in California have become the state’s chief scourge, as roughly one in five renters spend half of their income on housing costs. Unfortunately, the situation may get worse as state spending on housing programs is projected to decline through the end of the decade.
A recent analysis from California’s Legislative Analyst’s Office shows that general fund spending on housing is expected to decline by 8.6%, or by about $62 million per year, through 2029. The state currently spends about $189 million per year on housing programs and is expected to spend about $127 million per year beginning in the 2026-2027 budget year, according to the analysis.
The decline in spending could impact programs like the state housing policy development program, a $1.19 billion program that provides guidance on affordable housing development and preservation. The state’s housing financial assistance program could also be impacted, as it was allocated more than $1.2 billion to provide loans and grants to housing developers last year.