Program Enhancements and Other Budget Adjustments
Department of Housing and Community Development

The Department of Housing and Community Development (HCD) administers housing finance, rehabilitation, and community development programs, oversees the state's housing planning and code-setting processes, and regulates manufactured housing and mobile home parks. The Governor's Budget proposes $968.6 million ($15.6 million General Fund and $953 million other funds) and 597 positions for the HCD's activities. This represents an increase of $314.3 million and 79 positions from the revised 2006-07 budget and $476 million above the 2006 Budget Act, mainly due to Proposition 1C, the new housing bond.


PROPOSITION 1C IMPLEMENTATION
 In November 2006, the voters approved Proposition 1C, the Housing and Emergency Shelter Fund Act of 2006. HCD has begun the staff work to award funds from the proceeds of Proposition 1C to approved projects, expecting the first of these awards by the end of 2006-07. In 2007-08, HCD expects to make $373 million in awards to the following program areas authorized by Proposition 1C:

  • Affordable homeownership programs: $88 million to help families become or remain homeowners (this includes $30 million for California Housing Finance Agency (CalHFA) programs, $15 million for the California Downpayment Assistance Program, and $15 million for the Residential Development Loan Program).
  • Affordable rental housing construction programs: $140 million to provide affordable rental housing, including for the State's lower income workforce, the elderly, disabled, and veterans.
  • Housing for farmworkers: $40 million to produce rental and affordable ownership opportunities for farmworker families.
  • Homeless permanent housing construction: $95 million to build permanent housing for the homeless, those transitioning out of homeless, and foster care youth.
  • Homeless shelter housing construction: $10 million to construct and expand shelters of last resort and transitional housing for the homeless.
Proposition 1C authorizes HCD to make the above expenditures without additional legislative authorization. Proposition 1C provides funding for two other programs: Building Equity and Growth in Neighborhoods (BEGIN), which provides grants to cities and counties to make deferred-payment second mortgage loans to qualified buyers of new homes, and the Transit-Oriented Development program to develop and construct housing projects close to transit stations. Funding for these two programs is required to be annually appropriated by the Legislature. The 2007-08 Budget proposes $40 million and $95 million for awards through BEGIN and Transit -Oriented Development, respectively.

The Budget includes $145 million in awards for three programs that Proposition 1C requires be further specified through the adoption of additional subsequent legislation:

  • Infill Incentives Grants ($100 million): A competitive performance-based award program of grants for critical infrastructure projects that will (a) measurably increase the supply of infill housing produced as a direct result of the state's investment, (b) encourage efficient land use and development patterns, and (c) ensure a reasonable geographic distribution of infrastructure resources throughout the state.
  • Affordable Housing Innovation ($15 million): Competitive grants or loans for projects on programs that demonstrate innovative, cost-saving ways to create or preserve affordable housing.
  • Housing and Urban-Suburban and Rural Parks ($30 million): This new program would create incentives to increase housing production by rewarding local governments with grant funds to create or improve well designed parks. This program would be administered by HCD in conjunction with the Department of Parks and Recreation.
The Administration will propose budget trailer bills to successfully implement these programs and to incentivise the creation of more housing.


PROPOSITION 46
 Proposition 46 is the Housing and Emergency Shelter Trust Fund Act passed by voters in November 2002. Until the recent passage of Proposition 1C, Proposition 46 was the largest housing bond in the nation's history, providing $2.1 billion for affordable homes for California's neediest citizens. As of December 31, 2006, the state had awarded approximately $1.6 billion to create or provide incentives for more than 100,000 affordable rental or owner-occupied homes and shelter spaces. As a part of the Governor's Initiative on Homelessness, HCD has directed approximately $30 million in Proposition 46 funds which, together with California Housing Finance Agency funds and Proposition 63, will provide homes with supportive services for seriously mentally ill homeless individuals and their families. HCD programs have assisted more than 10,427 homeless families and individuals, including veterans, by utilizing $127.8 million in Proposition 46 funds to create homeless shelter and transitional housing facilities. Allocations are expected to decline in 2007-08, as HCD has been able to accelerate the award of funds and most categories of funding are fully allocated.
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CHAPTER HIGHLIGHTS for Business, Transportation, and Housing Back to Top

 Major Accomplishments in 2006-07
 Proposed Business, Transportation and Housing Spending in 2007-08
 Program Enhancements and Other Budget Adjustments
  Transportation Overview
  Transportation Funding Sources
  Transportation - Major Programs
  Highway Safety
  California Highway Patrol
  Department of Motor Vehicles
  Business and Housing
 image of black pointing arrowDepartment of Housing and Community Development
PRINTABLE BUDGET DOCUMENTS Back to Top
Budget Summary - Business, Transportation, and Housing (pdf * - 103K) -
Provides this entire Business, Transportation, and Housing Chapter in pdf format.
ADDITIONAL INFORMATION Back to Top
Proposed Budget Detail - Business, Transportation, and Housing
Displays Proposed Budget Detail information for Business, Transportation, and Housing.