By Brian Hendershot, Cal Cities Advocate managing editor

The League of California Cities on Tuesday called on the state to not only honor previous funding commitments but create an ongoing, $3 billion funding stream to increase affordable housing and reduce homelessness. Expanding investments to prevent homelessness and increase the supply of affordable housing is one of Cal Cities’ top advocacy priorities for 2024.

The letter comes as Gov. Gavin Newsom prepares to unveil his January budget proposal. The state is staring down a $68 billion budget deficit — far more than anticipated. However, according to the Legislative Analyst’s Office, the Legislature has the tools to maintain most core services and a “substantial” financial cushion.

Protecting local revenues is also a key priority for Cal Cities. “We fully recognize the formidable task the state faces in crafting a budget this year and appreciate your pledge to protect vital services and public safety,” wrote Carolyn Coleman, Cal Cities executive director and CEO. “However, ... Cal Cities will oppose any efforts to reduce or eliminate funding for local services, as well as any attempt to tap into local revenue streams to balance the 2023-24 state budget.”

The state’s economic woes come amid several worrying reports. An annual federal study released last month found that California’s homeless population jumped by 6% from 2022 to 2023. Many were newly homeless, and over two-thirds were unsheltered. The estimates could be an undercount due to methodological flaws, differing definitions of homelessness, and lingering pandemic-era emergency orders.

Soaring housing costs and limited funding are also driving homelessness. CalMatters found that developers requested $3.5 billion from the state’s $576 million “Super NOFA” program. As noted by CalMatters and Cal Cities, funding is usually the last and largest hurdle for many affordable housing projects. One developer even compared it to “winning the lottery.”

Similarly, a new report from the Terner Center suggests policymakers need to “expand and sustain” homelessness and housing programs. Many of the highlighted practices in the report mirror Cal Cities’ policy and funding asks.   

Cal Cities is not alone in calling for ongoing funding to prevent and reduce homelessness. More lawmakers have expressed a willingness to back some sort of long-term funding solution. Asm. Sharon Quirk-Silva and a bipartisan group of lawmakers endorsed the idea last year. Legislators also passed a Nov. 2024 ballot measure that would allow voters to finance affordable housing, permanent supportive housing, and public infrastructure with a 55% voter threshold, just like schools.

The California Big City Mayors Coalition — a group of the largest cities in California — has urged the state to continue providing flexible funding through the Homeless Housing, Assistance and Prevention (HHAP) Program. The group noted that stopgap funding has created staffing challenges for cities and service providers alike, restricting their ability to negotiate multiyear contracts and services.

The group is calling for a minimum HHAP allocation of $2 billion per year through fiscal year 2026-27, for a total of $6 billion.

The 2024 state budget negotiations will kick off next week with the Governor’s budget proposal. Even in flush years, the process lasts until June 15, the constitutional deadline for the Legislature to pass a balanced budget.