In 2026, California consolidated its housing and homelessness programs under the new California Housing and Homelessness Agency (CHHA), marking a major shift in the state’s housing policy. Tomiquia Moss took the role of Secretary for the agency, which now oversees the Department of Housing and Community Development, California Housing Finance Agency, and California Interagency Council on Homelessness under one cabinet-level leader. The Department of Housing and Community Development still manages key housing programs, including Homekey+.
The Housing and Development Finance Committee (HDFC) acts as the main point for multifamily affordable housing programs. AB 179 appears as an enacted or tracked 2026 measure in the California legislative database, confirming an official legislative record for this bill (California Legislative Information). Terner Center research found that each extra public funding source raised affordable housing development costs by $20,460 per unit and added four months to project timelines.
Budget Allocations and Program Adjustments
The 2026-2027 state budget set aside $200 million for the Multifamily Housing Program and $500 million for the state Low-Income Housing Tax Credit program. Homeowners hit by natural disasters could access $100 million in construction financing through the Disaster Rebuilding Assistance Program. The seventh round of the Homeless Housing, Assistance and Prevention (HHAP) program received about $890 million, up from the previous round’s $500 million. Local governments now face new requirements to tap these funds, including a local matching rule and policies for handling encampments.
California’s Homekey+ program, funded by voter-approved Proposition 1 and run by the Department of Housing and Community Development, reached a milestone in October 2026 with more than 2,900 permanent supportive homes in development or funded for vulnerable residents, including veterans. Governor Gavin Newsom announced another $115 million in Proposition 1 funding for five new projects totaling 329 homes, with 168 homes set aside for California veterans. The program aims to help Californians with behavioral-health challenges and is a core part of the state’s strategy to address housing affordability and homelessness (Governor of California).
Two recent developments may shrink available housing funds. The California Air Resources Board’s May amendments to the Cap-and-Invest Program led to lower revenues for the Greenhouse Gas Reduction Fund, leaving only $133 million for AHSC—less than a quarter of what was promised under the prior year’s deal. The administration also limited initial authorization for CalAIM’s Housing Tenancy and Sustaining Services to six months, restricting a key funding stream for permanent supportive housing providers.
Legislative Actions Targeting Costs and Innovation
Several 2026 bills aimed to cut development costs and back construction innovation. AB 2020 (Gabriel) lets affordable housing developers reinvest excess reserves from one state-funded rental project into another, helping stabilize financially troubled developments. SB 1091 (Caballero) created the Community Anti-Displacement and Preservation Program (CAPP) to preserve Naturally Occurring Affordable Housing (NOAH) for long-term affordability, addressing displacement risks highlighted in Terner Center research.
Factory-built housing became a legislative focus. AB 1815 (Wicks) blocks local jurisdictions from imposing building codes on factory-built housing that differ from state standards. AB 2058 (Harabedian) allows third-party quality assurance agencies to handle installation inspections and caps local permitting and inspection fees at half the cost of traditional stick-built housing. AB 2185 (Quirk-Silva) requires state affordable housing programs to review and amend rules that may hinder factory-built housing, clarifies eligibility for program funds, and allows funding for upfront deposits on materials and production. SB 996 (Padilla) updated the state’s definition of manufactured homes to match recent federal changes.
Efforts to Lower Fees and Streamline Development
Reducing development impact fees drew attention, with AB 179 encouraging local jurisdictions to waive or cut fees on state-funded affordable housing projects where the jurisdiction is a co-applicant. Terner Center research found that impact fees add about $20,000 per unit to new Low-Income Housing Tax Credit developments. SB 1036 (Grayson) requires jurisdictions to assess fees based on a project’s net new impact, and SB 1117 (Cervantes) limits impact fees on accessory dwelling units (ADUs) to the portion exceeding 750 square feet.
Streamlining steps included AB 1738 (Carrillo), which allows remote building inspections for certain home components, and AB 1621 (Wilson), which limits local governments to two plan-check reviews and shortens permit appeal timelines. AB 2074 (Haney) requires large cities to create regional transit-oriented development districts with ministerial approval for qualifying high-density projects. SB 1014 (Grayson) mandates that localities provide a list and cost estimates of required improvements within 30 days of a preliminary application. SB 1196 (McNerney) sets timelines for processing electrical service connections for ADUs and small projects. AB 1732 (Alvarez) expands and extends a CEQA exemption for certain public university and college housing projects.
Expanding Housing Options and Density
Lawmakers also addressed missing middle housing. AB 1751 (Quirk-Silva) requires ministerial approval for townhome projects and associated maps, exempting them from CEQA. SB 1116 (Caballero) streamlines the development of smaller starter homes by allowing smaller parcels in multifamily and single-family zones. SB 1169 (Grayson) extends the life of tentative maps from 24 to 48 months. AB 2601 (Lee) enables concurrent processing of housing and subdivision applications under SB 9 and related laws. AB 956 (Quirk-Silva) permits up to two detached ADUs on single-family lots.
Density Bonus and Housing Element Changes
Several bills changed density bonus law. SB 1383 (Arreguín) limits incentives and concessions that waive local labor standards for tall developments. AB 939 (Schultz) lets eligible nonprofits buy for-sale units created under density bonus law immediately, provided they are sold to lower-income households through qualifying programs and remain affordable for at least 45 years. AB 2433 (Alvarez) requires local agencies to inform developers if their project meets density bonus standards and provides extra concessions for deed-restricted, for-sale units for low- and moderate-income families. AB 2480 (Ávila Farías) grants an extra density bonus for student housing projects meeting specific affordability criteria. SB 457 (Becker) requires the Department of Housing and Community Development to develop modeling tools for estimating realistic capacity of Housing Element inventory sites. SB 1344 (Cabaldon) increases the maximum litigation bond for supportive housing projects to $1 million. AB 1924 (Gabriel and Quirk-Silva) directs the California Interagency Council on Homelessness to develop a statewide homelessness prevention strategy.
Upcoming Ballot Measures
Voters in November will decide on several measures that could affect housing and homelessness. Proposition 1 would authorize $11.25 billion for state affordable and veteran housing programs. Proposition 37 would allow up to $25 billion in revenue bonds to help middle-income Californians buy newly built homes. Proposition 43 would require local special taxes proposed through citizen initiatives to get two-thirds voter approval. Proposition 45 would change CEQA to speed up environmental review and set timelines for legal challenges to certain housing and infrastructure projects.
These legislative and administrative changes signal a shift in California’s housing policy, with new funding structures, streamlined processes, and expanded options for affordable and innovative housing development. The Homekey+ program, highlighted by Governor Newsom and Secretary Tomiquia Moss, shows the state’s push to produce permanent supportive homes for vulnerable Californians, including veterans and those with behavioral-health needs, with more than 2,900 homes funded or in development as of October 2026 and a recent $115 million expansion across five communities. For more details, see the official announcement from the Governor of California.
