Dear John,

Last week, Governor Gavin Newsom released his 2025-26 budget proposal, showing a slightly higher-than-expected balance due to a stock market and state economy that performed stronger than earlier predictions. 

👉 Our Key Takeaway The release of this proposal is the earliest stage of budget negotiations, offering a mix of questions and concerns with some real, promising signals. Despite slight gains in the state’s fiscal outlook, this first proposal to balance the state budget does not include many housing programs important to NPH members. However, it lays out a new vision for addressing California’s housing needs: a cabinet-level housing and homelessness agency that would enable our members to build more affordable housing more quickly for Californians.

🛣️ Looking Ahead It’s critical that state lawmakers offer recommendations and additional proposals for the affordable housing solutions that our neighbors and communities are counting on us for. In the legislature, Democratic leadership will have the opportunity to make their own proposals – with their concerns on affordability in mind and with a commitment to housing that matches Californians’ perennial concerns for housing affordability.

All of this comes as the state watches the devastation in Los Angeles unfold as whole neighborhoods burn in some of the worst fires we've seen in recent history. We don't know what the final impact of the fires will be, but we do know that with the as-yet-known scale of loss of life, home, and community, California’s pressing housing emergency is further compounded. The state will need to take decisive action to restore housing access and rebuild strong, healthy communities.

🌅 What's Next NPH, with our members, is committed to partnering with the Governor and Legislature through the state budget process as lawmakers balance the fiscal reality facing California with the critical housing affordability and homelessness needs across the state. The upcoming legislative session will be a crucial time to protect Californians and the progress we have made — and must continue making — for housing solutions.

💪 Ready to Join Us? Help us shape our policy priorities ahead, including state budget advocacy. Join our Legislative Issues Working Group. (NPH working groups are for members only. Become a member or renew your membership.)