Hi John,

I have great news: the 2025-26 state budget was released yesterday and it restores funding to many housing programs that are critical for the work of our members.

This budget has come a long way since the Governor’s January proposal (which contained no funding for housing) and the May Revise (which proposed only partial investments). NPH worked diligently over the last several months with close members and partners to advocate for housing in the budget, proving once again that our collective efforts win real change for our industry. 🌠

In a challenging budget season and economic environment, this is an important victory to celebrate. We’re grateful for the leadership from the Governor’s Office, Speaker Rivas, Pro Tempore McGuire, and budget chairs Senator Wiener and Assemblymember Gabriel. Thank you for doing the right thing for our neighbors and communities even during uncertain times. Overall, this was still a difficult budget year and where funding falls short, structural changes may lay the groundwork for bigger strides forward in the future.

📜 The 2025-26 state budget agreement contains:

✅ $500M for the state Low Income Housing Tax Credits (LIHTC)
✅ $120M for the Multifamily Housing Program (MHP)
✅ Increased funding for the Department of Housing and Community Development (HCD) to support the Housing and Homeless Accountability, Results and Partnership unit
✅ $500M for the Homeless Housing and Assistance Program (HHAP) in FY 2026-27

👉 This funding is contingent upon the passage of two pairs of housing trailer bills that have been or will be introduced: SB 130/AB 130 and SB 131/AB 131. In these bills, provisions of a few in-progress housing bills are being incorporated into the budget process. If they are intact when the budget is approved, they will go into effect immediately with the budget. The trailer bills include provisions from:

• AB 609 (Wicks) and SB 607 (Wiener) to reform the California Environmental Quality Act (CEQA)
• AB 1244 (Wicks) to create a fund to support infill with Vehicle Miles Traveled fees
• AB 306 (Schultz/Rivas) to freeze residential building codes for a few years
• SB 681 (Wahab) to limit Coastal Commission appeals on housing and apply the Surplus Land Act to more school-owned lands

📣 Stay in the Know & Work Closely on Our Budget/Policy Priorities! 

Want to help shape and inform our policy priorities? Join NPH’s Legislative Issues Working Group and help make preliminary recommendations to guide NPH’s position on legislative issues. (Working Groups are for NPH members only. Join/renew today. To confirm your membership status, or for any questions about your membership, please contact Oksana at [email protected].)

🏘️ The trailer bills also contain language to allow affordable developers funded by HCD to utilize equity in their affordable housing projects to finance further investments in affordable housing projects.

⛪ NPH has also secured updates to SB 4 (Wiener, 2023), our bill to streamline development on land owned by faith communities and non-profit colleges, making it easier to build affordable housing.

🏡 Discussions are ongoing to consider shifting some funds from the proposed $300M for the California Dream for All program, which supports first-time homebuyers with downpayment assistance, to the CalHOME program, which supports the construction of affordable units for homeownership. We have joined many of our partners in calling for this change.

🤝 Finally, the agreement also clears the way for the creation of the new Housing and Homelessness Agency by providing necessary funding for the reorganization of agencies. This is a major step forward in streamlining housing finance in the state of California. The Legislature has until July 4 to veto this proposal, but this budget allocation suggests the reorganization has enough support to pass.

What’s Next After the budget is signed by the Governor, NPH will turn our attention to building the power and support needed to place a housing bond on the statewide ballot in June 2026 and securing the funding our members need to keep building homes!