The Brief

After years of soaring rents, increasingly out-of-reach home prices and an enduring homelessness crisis that touches every corner of the state, California is finally creating a state agency exclusively focused on housing issues.

You might wonder what took so long.

Earlier this year, Gov. Gavin Newsom introduced a proposal to split up the Business, Consumer Services and Housing Agency — an awkward grabbag of disparate bureaucratic operations — into two fresh agencies: One just for housing and homelessness-related departments and one for everything else.

The Legislature had until July 4 to veto the plan. It didn’t (though some Republicans tried). Now the work of standing up California’s first housing agency begins.

Supporters of the bureaucratic reshuffle say the move is long overdue. In surveys, Californians regularly name housing costs and homelessness as among the state’s top concerns. That alone warrants the creation of a new cabinet-level adviser to the governor, said Ray Pearl, executive director of the California Housing Consortium, which advocates for affordable housing development.

“A cabinet-level secretary who will sit with other cabinet secretaries, whose purview will be housing … that is elevating the agenda to the highest level,” he said.

Pearl, like virtually every expert interviewed for this article about the new agency, described the reorganization as “just the first step” in bringing much-needed order and efficiency to California’s network of funding programs for affordable housing.

“Simply moving people around and giving them a new business card doesn't change the system,” he said.

A spokesperson for the governor stressed that the creation of a new housing agency is part of a broader effort by Newsom to prioritize one of California’s most vexing issues. Since taking the helm of state government in 2018, the governor has ramped up pressure on local governments to plan for more housing, urged them to clear encampments of unhoused Californians and pushed for legislation aimed at ramping up construction.

“This is the first administration to make this a part of our everyday conversation — putting a magnifying glass on the issue of homelessness and finding ways to effectively address it. These structural and policy changes are going to create a generational impact,” said spokesperson Tara Gallegos.

Among the seven cabinet-level agencies, the BCSH has always seemed like the “everything else” wing of state government. Affordable housing grantmakers, lenders and urban planning regulators share agency letterhead with cannabis and alcohol industry overseers, professional licensors, car mechanic watchdogs and everyone at the California Horse Racing Board.

“We used to call it ‘The Island of Misfit Toys,’” said Claudia Cappio, who ran both the California Housing Finance Agency and the Department of Housing and Community Development in the years immediately before and after 2012 when both were packed into the newly created BCSH. “Imagine a staff meeting of all those things … I learned a lot about horse racing.”

How many financing systems is too many?

Aside from giving housing and homelessness its own box atop Newsom’s organizational chart, the chief selling point of the reorganization has been to simplify the state’s hydra of affordable housing financing systems.

Currently, there is one state organization where affordable housing developers apply for loans, another where they go for most grants, a third where they apply for the federal tax credits that builders use to entice private investors to back their projects and a fourth for the bonds needed to secure many of those credits. This doesn’t include one-off programs for veterans, transit-oriented development and short-term housing for homeless people, which are sprinkled across state government.

Complicating things further, the tax credit and bond funding programs — the backbone of funding for affordable housing development across the country — aren’t even under the governor’s control. Those programs are run by the state’s independently elected treasurer.

“Many, many states have what is essentially a housing finance agency that controls the majority of affordable housing funds,” said Sarah Karlinsky, who directs research at UC Berkeley’s Terner Center for Housing Innovation. California’s programs are split up, which is unusual.

Beyond that, “what makes California so unique,” said Karlinksy, “is the fact that the resources are spread across two different constitutional officers.”

That fragmentation appears to be adding to the cost of construction in California. A Terner Center analysis this spring estimated that each additional public funding source delays a project by, on average, four months, and adds an additional $20,460 in costs per unit.

Affordable housing construction is already distinctly expensive here. Building a publicly funded project in California costs more than 2.5 times more per square foot than in both Texas and Colorado, a recent report from the Rand Institute found.

The dance of secretaries

Will the new housing agency solve that problem? Not everyone is convinced.

Of the many ways in which the scarcity of affordable housing affects most people, “the lines on the org chart” don’t crack the “top 100 list,” Sen. Christopher Cabaldon, a Napa Democrat, said about the governor’s proposal at a hearing in March.

Cabaldon noted that executive reorganizations are a semi-regular feature of California governance. The Business, Consumer Services and Housing Agency is itself the product of a reorganization which spun off California’s independent transportation agency.

“The dance of the secretaries we do constantly, always with grand ambitions,” said Cabaldon. “Simply saying that it's going to cause more focus, that it will be streamlined, that it will cause leadership level action — but how?”

As written, the new housing agency will consist of the current agency’s housing-related entities along with a new Affordable Housing Finance Committee, which will be tasked with coordinating the housing subsidy programs currently under the governor’s control.

But the major funding sources managed by the treasurer’s office will remain where they are. The California constitution wouldn’t have allowed Newsom to commandeer those functions from the independent treasurer even had he wanted to.

That’s a significant shortcoming, according to the Little Hoover Commission, the state government’s independent oversight agency, which reviewed the governor’s plan before it was passed along to the Legislature. In its final report, the commission recommended that the governor and treasurer strike a formal deal to “create a unified application and review process” for all the affordable finance programs under their respective purviews.

Neither the governor’s office nor the office of state Treasurer Fiona Ma would say if or how they are pursuing that goal.

A single, unified application for every one of California’s public affordable housing funding programs has been the bureaucratic holy grail of California affordable developers and policy wonks since at least the mid-1990s. Though the reorganization stops short of requiring that, it set up both constitutional offices to better coordinate in the future, said Matt Schwartz, president of the California Housing Partnership, a nonprofit that advocates for affordable housing.

“There’s going to be a bit of diplomacy” between the two executive branches to work out a joint application, said Schwartz, who spoke to CalMatters earlier this year after the governor first introduced the proposal. “That’s the longer-term prize that many of us will be pushing to come out of this process.”

Some affordable housing advocates have urged lawmakers to be cautious in mushing the various bureaucracies together.

In a letter to four powerful Democratic legislators, the California Housing Consortium stressed that the application systems administered by the treasurer’s office already “function extremely well.”

That process “is not broken and doesn't need fixing,” said Pearl, the consortium’s director. Before monkeying with it, he said, “let’s get the agency set up.”

Pearl and the consortium also noted that past legislation has already mandated the creation of a working group to propose a consolidated application. The findings of that group are due on July 1, 2026. That’s the same day the current BCSH is set to officially dissolve and the two new agencies will take its place.

That’s also just five months before statewide elections will be held to replace Newsom and Ma, giving voters a chance to decide who will shape the future of affordable housing policy in California.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

The Los Angeles County Board of Supervisors voted unanimously Tuesday to approve an $843 million homelessness spending plan that includes nearly $200 million in reductions to programs and services in the next budget year.

Among those programs is Pathway Home, which helps move people from encampments into temporary housing. The county reduced funding for that program by $92 million, which will shrink it from 20 project sites to seven, officials said.

Supervisors also approved $105 million in reductions to other programs, including large cuts to street outreach teams, homelessness prevention programs and other supportive services.

County officials said they had to reduce spending in order to cover the rising costs of operating shelter beds and the loss of tens of millions in temporary state and federal funding, including some COVID-19 relief dollars.

“With federal neglect and state cuts, we have to do more with less,” Supervisor Lindsey Horvath told LAist. “And we will.”

The county’s new Department of Homeless Services and Housing has been warning about the looming shortfall since July. County officials solicited input on how to fill an initial $303 million gap.

Since then, the department adjusted the county’s homelessness spending plan, after finding some one-time state grants and cost-saving measures.

The budget year starts July 1.

Some funding restored

Last month, local homeless service providers urged county officials to restore all of the more than $200 million in proposed reductions to programs and services. Some supervisors raised concerns about specific cuts.

Since then, new revenue projections show the county stands to bring in $21 million more through Measure A than originally anticipated.

Measure A is a sales tax ordinance, approved by L.A. County voters in 2024, that funds homeless services and affordable housing initiatives. It is expected to generate about $1 billion annually, but exact revenues fluctuate with consumer spending.

The county’s slightly rosier revenue projections allowed the homeless department to roll back a fraction of the proposed reductions.

“It’s not a windfall and it doesn’t solve every challenge, but it does give us the ability to restore important programs that were on the chopping block,” Supervisor Janice Hahn said.

The board voted to use much of that $21 million to restore funding for two dozen full-time outreach workers and about 100 shelter beds that were previously on the chopping block.

The plan approved Tuesday also calls for $5 million in Measure A revenue to partially restore funding for interim housing in Long Beach, Pasadena and Glendale. It restored more than $1 million to operate family solution centers — hubs to connect unhoused families with services — and about $500,000 for a program that helps military veterans access government benefits.

Supervisor Holly Mitchell said she wishes Pathway Home funding could be maintained. She said it’s been crucial for helping people living in RV encampments in her district, which spans from Koreatown to much of the South Bay.

"These restorations don't expand encampment resolution operations,” Mitchell said Tuesday. “The services with the greatest impact in the Second District remain reduced, and the current plan does not replace what was cut."

County homelessness officials told supervisors the 100 shelter beds they saved will be prioritized for people living in encampments and will help make up for cuts to Pathway Home.

"The reduction to Pathway Home is not a reduced commitment to encampment resolution,” L.A. County Department of Homeless Services and Housing director Sarah Mahin said Tuesday. “It’s a recognition that it was built on one-time funding and we need to expand strategies to include more cost-effective resolution solutions."

New oversight push

The supervisors also voted 5-0 Tuesday to approve a new motion focused on accountability in homeless service contracting. The motion by Horvath and Kathryn Barger directs the homelessness department to work with the county auditor-controller to create strict oversight procedures for contracts, including random site visits, performance monitoring and provisions for termination.

They said the goal is to prevent the mismanagement that has plagued the Los Angeles Homeless Services Authority, and the fraud that has resulted in recent arrests. Last month, federal authorities arrested Alex Soofer, director of a nonprofit called Abundant Blessings, on suspicion of embezzling tens of millions in dollars meant to serve unhoused Angelenos. Soofer pleaded not guilty to the charges this week.

"Public dollars intended to address homelessness have gone unaccounted for under LAHSA," Horvath said. “That is unacceptable and it ends now with the county.”

Last year, the board voted to divert more than $300 million in county homelessness dollars away from LAHSA and administer the funds itself with a new homelessness department.

“As the department launches, every contract, every dollar, and every outcome must withstand scrutiny,” Horvath told LAist in a statement. “We don’t have resources to waste or time to lose in addressing the homelessness crisis.”

Barger described instances of fraud within the homeless services sector as “moral failures” that cannot be tolerated.

“They represent theft from the most vulnerable people in our community,” she said.

She also argued that ethical service providers “should not have their reputations destroyed by the criminal actions of a few bad actors.”

Barger told fellow supervisors at Tuesday’s meeting it’s their responsibility to monitor how county homelessness dollars are being spent — and to defund programs that aren’t generating results.

“Setting the budget is the easy part,” Barger said. “We have to see results. And if we don’t, we have to have a debate at this board: is that the best use of these resources?”

The department must report back to the board in 60 days with their full plan for monitoring contractors and preventing fraud and misuse of public funds.

Auditor-Controller Oscar Valdez told supervisors his office would submit a plan to county homelessness officials Tuesday.

A crew of four moon-bound astronauts will remain on the ground for at least a month after NASA delayed the launch of the Artemis II mission. During critical pre-launch testing Monday, mission managers uncovered a number of issues that prevented the completion of the test.

NASA is now planning a March launch date for the four astronauts — three from the U.S. and one from Canada — on a ten-day mission to circle the moon and return to Earth, traveling farther than any humans have ventured into deep space.

Issues leading to that delay began about an hour into Monday's test, known as the wet dress rehearsal. As the team began fueling the rocket at the Kennedy Space Center in Florida, sensors picked up a hydrogen leak. Super-chilled hydrogen is used as the fuel for the massive Space Launch System (SLS) rocket.

Hydrogen is an efficient propellant for rockets — but its molecules are so tiny and light they can escape even the tightest of seals. Launch director Charlie Blackwell-Thompson said they had troubleshooted the initial leak, but when they began to pressurize the tank, another leak surfaced.

"And so as we began that pressurization, we did see that the leak within the cavity came up pretty quick," said Blackwell-Thompson.

(L/R) NASA Associate Administrator Amit Kshatriya, NASA Associate Administrator Lori Glaze, launch director Charlie Blackwell-Thompson, and manager of NASA's Space Launch System Program, John Honeycutt, hold a news conference on the Artemis II mission at Kennedy Space Center in Cape Canaveral, Fla., on Tuesday.

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Miguel J. Rodriguez Carrillo

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AFP via Getty Images

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Hydrogen leaks plagued testing of NASA's Artemis I mission in 2022. Blackwell-Thompson said lessons learned from that uncrewed flight were utilized for Artemis II, but there's more investigation is needed.

The wet dress rehearsal uncovered other issues — including a problem with the Orion capsule, which will carry the crew to the moon. While no one was on board Monday, teams practiced preparing the spacecraft for its passengers. A valve that pressurizes the vehicle required additional attention and took more time to close the hatch than anticipated.

Teams also uncovered issues with cameras due to cold weather and audio dropouts across communication channels. "As always, safety remains our top priority, for our astronauts, our workforce, our systems and the public," said NASA administrator Jared Isaacman in a post on X, and that NASA will only launch when the agency is ready.

Work now begins to fix the issues. NASA will require another wet dress rehearsal before giving the "GO" to put astronauts on board. "All in all, a very successful day for us on many fronts," said Blackwell-Thompson. "Then, on many others, we got some work we've got to go do."

The earliest launch window for another attempt is March 6. NASA has additional launch opportunities on March 7, 8, 9 and 11.

The crew of NASA astronauts Reid Wiseman, Victor Glover, Christina Koch, and Canadian Space Agency astronaut Jeremy Hansen were released from quarantine and will remain in Houston, Texas. They'll re-enter quarantine about 14 days ahead of the next launch attempt and make the trip to the Kennedy Space Center six days before liftoff.

Artemis II is testing key systems of the Orion spacecraft, like its maneuverability and life support systems, ahead of the planned Artemis III mission that will take humans to the lunar surface. The Artemis II will mark the first time humans have returned to the moon since the final Apollo lunar mission in 1972.
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A trial got underway Tuesday in a case alleging that Huntington Beach illegally dilutes the power of Latino voters with its at-large election system.

Cities across Orange County and elsewhere in California have faced similar challenges over the past decade. Most have settled out of court by adopting by-district elections, where voters only vote on a city council representative from their area, rather than requiring candidates to run citywide. A notable exception is Santa Monica — the city has been fighting a challenge to its at-large election system in court for nearly 10 years.

Now, Huntington Beach is following suit.

The case was brought by the nonprofit group Southwest Voter Registration Education Project and Victor Valladares, a Huntington Beach resident and Democratic Party activist. It’s being heard by Orange County Superior Court Judge Craig L. Griffin.

The argument against at-large city elections

The plaintiffs allege Latino voters can’t elect a candidate of their choice under the current system, in violation of the California Voting Rights Act. This alleged dilution of Latino voting power, they say, leads to poor representation and negative consequences for the city’s majority-Latino Oak View neighborhood.

“Their needs get ignored,” Kevin Shenkman, the plaintiffs’ lawyer, said during his opening statement Tuesday. “It is a natural result of the at-large election system.”

Latinos make up about 20% of the population in Huntington Beach. Under a draft map of electoral districts drawn up by demographer David Ely, a witness for the plaintiffs, the district that includes the Oak View neighborhood would be 40% Latino. Plaintiffs argued this would give residents more power to elect a city councilmember who represents their interests.

The city’s defense of at-large elections

In their opening argument, lawyers representing Huntington Beach argued that Latinos in Huntington Beach are spread across the city and politically diverse.

The city’s lawyers also argued that recent elections of Latino city council members, including MMA star Tito Ortiz in 2020 and Gracey Van Der Mark in 2022, prove the city’s current at-large election system doesn’t impede Latino residents’ ability to participate in the local political process.

“The system works, it’s not broken, and the evidence will show that at trial,” said Anthony Taylor, one of the attorneys representing Huntington Beach.

The trial is expected to last into next week.

Go deeper

• Why were AI-equipped police cameras installed in this majority Latino Huntington Beach neighborhood?
• Huntington Beach's controversial voter ID law is illegal
• Voting by district gives Latino candidates a boost in Orange County
• District elections mean big governing changes for many California cities