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 Trump administration is seeking to challenge state laws regulating the artificial intelligence industry, according to an executive order the president signed Thursday.

The order directs the Justice Department to set up an "AI Litigation Task Force" to sue states over their AI-related laws and also directs the the Federal Trade Commission and the Federal Communications Commission to work with the DOJ to follow the White House's AI action plan to circumvent "onerous" state and local regulations.

The order also directs Commerce Secretary Howard Lutnick to study whether the department can withhold federal rural broadband funding from states with unfavorable AI laws.

"We have to be unified," said President Donald Trump. "China is unified because they have one vote, that's President Xi. He says do it, and that's the end of that."

Trump's AI advisor, venture capitalist David Sacks, said the administration will not push back on all state laws.

"Kid safety, we're going to protect," Sacks said. "We're not pushing back on that, but we're going to push back on the most onerous examples of state regulations"

The executive order is almost certain to be challenged in court and tech policy researchers say the Trump administration cannot restrict state regulation in this way without Congress passing a law. The order also directs Sacks to work with Congress to help draft legislation.

Trump's executive order drew criticism from some of his supporters, including organizations that are part of a bipartisan effort to pass laws protecting children from AI harms.

"This is a huge lost opportunity by the Trump administration to lead the Republican Party into a broadly consultative process," said Michael Toscano, director of the Family First Technology Initiative at the Institute for Family Studies, a conservative think tank. "It doesn't make sense for a populist movement to cut out the people on the most critical issue of our day. But nonetheless, that is what they are vigorously trying to do."

"Even if everything is overturned in the executive order, the chilling effect on states' willingness to protect their residents is going to be huge because they're all now going to fear getting attacked directly by the Trump administration," said Adam Billen, vice president of Encode, a nonprofit focused on child safety and threats posed by AI. "That is the point of all of this — it is to create massive legal uncertainty and gray areas and give the companies the chance to do whatever they want."

Sacks can recommend some state laws, such as around child safety, to not be challenged if Congress does come up with a national policy for AI.

While Congress has stalled on passing AI regulation, dozens of states have passed laws related to AI, which include banning creating nonconsensual nude images using AI technology, mandating government agencies and businesses to disclose AI usage, requiring checks for algorithmic discrimination and protecting whistleblowers.

The Trump administration has pushed for less regulation of the AI industry, citing competitive pressure with China. But Trump has also recently allowed chipmaker Nvidia to sell its second-most advanced AI chips to China. Depending on the quantity, said Michael Sobolik, a senior fellow at Hudson Institute who studies U.S.-China competition, the export could end up "diluting what is our most significant advantage in the AI race."

Trump and some of his allies have attempted multiple times this year to halt state-level AI regulation. Earlier this month, GOP lawmakers tried and failed to insert AI preemption into the annual defense spending bill. An earlier version of the executive order signed Thursday leaked last month, sparked a round of opposition from across the political spectrum. In July, the Senate dropped an AI moratorium from the reconciliation bill it was debating.

While Democrats broadly support more AI regulation, the issue has divided Republicans. A faction of the party, including the president, welcome the support of tech billionaires, though others continue to view them with distrust.

Sen. Ted Cruz of Texas, an industry ally, introduced the failed AI moratorium during the reconciliation bill debate and stood next to Trump at a signing ceremony for the order on Thursday. After the effort to slip a similar measure in the defense spending bill failed last week, Sen. Josh Hawley of Missouri posted on X, "This is a terrible provision and should remain OUT."

Many Republican governors are also opposed to the move. Earlier in the day, Utah Gov. Spencer Cox posted on X that he preferred an alternative executive order that did not include barring state laws. "States must help protect children and families while America accelerates its leadership in AI," he wrote.

"An executive order doesn't/can't preempt state legislative action," posted Florida Gov. Ron DeSantis on X Monday in response to Trump's Truth Social post announcing the upcoming order, "Congress could, theoretically, preempt states through legislation." DeSantis has recently proposed a series of AI-related measures.

John Bergmayer, the legal director of the nonprofit advocacy group Public Knowledge, agreed. "They're trying to find a way to bypass Congress with these various theories in the executive order. Legally, I don't think they work very well."

In a post on X on Tuesday, Sacks suggested that the federal government can override state AI laws because it has the power to regulate interstate commerce.

Bergmayer disagreed, "States are, in fact, allowed to regulate interstate commerce. They do it all the time. And the Supreme Court just recently said it was fine."

Bergmayer cited a 2023 Supreme Court decision where the court supported California's power to regulate its pork industry even though the regulations affected farmers in other states.

NPR's Bobby Allyn contributed reporting.

Hundreds of people gathered at a cemetery in Boyle Heights Thursday to honor more than 2,300 Angelenos whose bodies have not been claimed by loved ones.

Officials say it was the highest number of people laid to rest during the annual Ceremony of the Unclaimed Dead over the past 45 years.

The remains were those of adults and children, some of whom had experienced homelessness, and who were immigrants far from home. Several of the people had struggled with physical and mental illnesses.

All of them died in 2022, about two years into the COVID-19 pandemic. The bodies were cremated and placed in a communal grave ahead of the ceremony, which has been a county tradition since 1896.

Los Angeles County Supervisor Janice Hahn said the unclaimed Angelenos may be strangers to those observing the ceremony, but they were our neighbors, too.

“They may have walked the same streets we did, waited at the same bus stops, enjoyed the same warm sunny days, even ones in mid-December like today,” Hahn said during the ceremony. “Like all of us, they hoped, they hurt, they dreamed — and too many endured more suffering and loneliness than anyone should.”

Inside the ceremony

Local faith leaders presided over the roughly hour-long event, sharing prayers and blessings to reflect the cultural and religious diversity of the region.

They included a Native American sage ceremony, as well as Buddhist, Islamic, Jewish and Christian prayers in five languages.

About 250 community members came to pay their respects, including Naha Armady of East Hollywood, who told LAist the experience was moving and emotional, especially after losing a family member and a pet earlier this year.

“It felt like it was totally meant to be for me to be able to come and hold space for these souls,” Armady said. “It's just an opportunity to have time and space and kind of honor the dead, and also maybe get a little bit of closure.”

Members of the community, along with county officials and faith leaders, placed white roses and bouquets of flowers they brought from home on the communal grave. One man sprinkled a few drops of whiskey over the petals from a black coffee cup.

Local faith leaders presided over the roughly hour-long event, including Jerry Arvayo, who performed a Native American sage ceremony.

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Makenna Sievertson

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LAist

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Paying respects 

Officials say the ceremony is designed to make sure every person in L.A. County, regardless of their means, is remembered with respect, dignity and compassion.

Justin Szlasa, a commissioner for the regional Los Angeles Homeless Services Authority, told LAist the ceremony is an opportunity to honor fellow Angelenos who may have been overlooked or lonely in life.

“These are people who are not connected to the community in a way that I wish they would be,” Szlasa said. “And I think it's really wrapped up in the work that we do related to trying to solve the homelessness problem here in Los Angeles.”

A video of this year’s Ceremony of the Unclaimed Dead is available here.

L.A. Mayor Karen Bass has asked the City Council to increase the Los Angeles Police Department’s budget by $4.4 million to hire 410 more officers before July.

In a letter to council members yesterday, Bass wrote that the city needs to have enough officers to keep Angelenos safe in coming years, including during major events like the 2026 FIFA World Cup and the 2028 Olympic Games.

LAPD Chief Jim McDonnell made a similar argument at a Budget and Finance Commission meeting Tuesday, where he said that despite the city’s budget problems, he worries about whether L.A. will be prepared for the Olympics in 2028 under currently approved staffing.

Several City Council members have already been pushing back against the proposal, arguing that the budget for those positions was negotiated and signed by Bass in June.

“The council and the mayor signed a budget that included 240 new hires,” Councilmember Katy Yaroslavsky said at the Budget and Finance Commission meeting on Tuesday. “The department chose to hire that full 240 in the first six months of this year.”

“Our job is to keep the city safe. We also have a responsibility to keep it solvent,” Yaroslavsky told LAist in an emailed statement. “I want to grow the police department, but I have yet to see a proposal that identifies an ongoing funding source to pay for more officers.”

LAPD Officers line up in preparation to form a skirmish line in front of protesters near the federal detention facility in downtown L.A. on June 7, 2025.

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Jordan Rynning

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LAist

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LAPD hiring goals twice as high as current budget

Mayor Bass initially proposed a budget back in April recommending funding to support 480 new LAPD officers.

The final budget was a compromise reached by the City Council that approved hiring 240 new recruits in the midst of a budget crisis and attempts to reduce layoffs across the city. According to a press release on June 7, the day after she signed the final budget, Bass announced a plan to find additional funding within 90 days to bring the total LAPD hires to 480.

The funding never materialized and no additional positions have yet been approved.

LAPD has already hit its hiring cap of 240 new officers, according to a letter from the city personnel department.

The city’s most recent financial status report filed on Dec. 5 by City Administrative Officer Matt Szabo says if LAPD continues hiring at its current pace, the department would add 410 new sworn officers and exceed the plan previously budgeted.

The report shows that costs of the additional 410 officers would be expected to exceed $4.4 million through June, then about $23.7 million in the next fiscal year.

Chief McDonnell spoke to council members at the Budget and Finance Committee about the pace of hiring, and said that the department did what it was “told to do.”

“Our understanding was . . . that we would be able to hire an additional 240 if we hired 240 in the first six months,” McDonnell said, “we did that.”

The department cannot continue hiring without the additional positions requested by Bass.

Show me the money

At Tuesday’s Budget and Finance meeting, Councilmember Tim McOsker asked Szabo whether any funds had ever been identified to fill those positions.

“There has not been a formal report issued to this body identifying funds for additional hiring above what is in the budget,” Szabo replied.

“Is there any proposal — any sort of competent, grown up, adult proposal — for how we pay for this?” McOsker, who also chairs the Personnel and Hiring Committee, asked in a follow up question to Szabo.

“Not that I'm aware of,” Szabo replied. He said his office would be happy to identify reductions to fund additional hiring, but had not been instructed to do so.

That means the proposed hires would need to come from the city’s reserve funds, which Szabo’s office cautioned against.

“The impact of this overspending in 2025-26 and 2026-27 cannot be overlooked,” his office’s financial status report states, “as it represents a departure from the approved plan with likely repercussions to the City’s Reserve Fund.”

The reserve fund currently sits at 5.06 percent of the total general fund budget, according to the report, but overspending — primarily driven by LAPD and liability payments — could bring the reserve fund below emergency levels of 5 percent.

“We should never, as a practice, assume the use of the reserve fund for hiring police officers,” Szabo told the Budget and Finance Committee. “The reserve fund is there for unexpected circumstances.”

In an emailed statement provided to LAist, McOsker said he agrees with the mayor that public safety is the highest priority.

“I agreed with the Mayor six months ago when she originally proposed this saying she would work with Council Leadership to find the money to fund more officers.” McOsker said, “But six months later, this remains a proposal with no funding identification.”

Bass told Larry Mantle on AirTalk that the city is looking at “every account possible” to find money for more officers, and that not approving more hiring will also have a financial cost.

“ Either we hire new officers or we continue to spend millions and millions of dollars in overtime,” she said.

Listen to the interview

Hermon just got its first sit-down restaurant.

If you've never heard of the Northeast Los Angeles neighborhood tucked between Highland Park and El Sereno, you're not alone. Unless you live there or regularly navigate the Arroyo Seco, Hermon tends to fly under the radar.

While its hip neighbors have seen wave after wave of restaurant openings, this 3,500-resident community has remained untouched. Until now.

Opened Dec. 3, Hermon's sits on the main stretch of Monterey Road, the latest venture from Last Word Hospitality — the restaurant group behind Found Oyster, Barra Santos, Queen's Raw Bar & Grill and Rasarumah. Founded in 2014 by Holly Fox and Adam Weisblatt, the group partners with chefs and hospitality professionals, helping them become restaurant owners.

The neighborhood of Hermon was founded in 1903 by a Free Methodist Church group and named after the biblical Mount Hermon. Annexed into Los Angeles in 1912, Hermon has grown quietly as a primarily residential area. But it remains one of Northeast LA's last underserved neighborhoods, with limited amenities and stores. Anyone interested in dining out was restricted to takeout spots at the Fresco Community Market shopping center.

From banquet hall to bar seats

The 89-seat restaurant occupies a former banquet hall that belonged to the Free Methodist Church, with Art Deco bones in a decidedly Craftsman neighborhood. The all-booth dining room features a U-shaped bar, handmade California tilework, hickory floors and vintage artwork spanning centuries.

Fox spent five years pursuing the building, drawn to its corner location and architectural details. The landlord initially resisted, citing risk, but came around after detailed presentations and tours of Barra Santos and Queen's. The next stop was the Hermon Neighborhood Council. Fox's team pitched in the space itself, emphasizing architectural restoration. The clincher? The name.

"The first thing she said to me was, 'The smartest thing you've done is name it Hermon,'" Fox recalled of the council president's reaction. "'You saw a community and you said, "Let's build a reflection of who they are."'"

Inside Hermon’s: a softly lit, wood-lined dining room that nods to classic L.A. dining rooms while feeling firmly rooted in the Hermon community.

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Courtesy Hermon's

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Community goal

Gentrification concerns — common at Last Word's other openings — never surfaced. Instead, Fox said the community seemed eager to be recognized.

Nicole Mihalka, president of the Hermon Neighborhood Council, said the name itself was significant for the small community.

"Not a lot of people know what Hermon is, but now if there's this great restaurant that's a destination with Hermon in the name, they're going to have to find out," she said.

The opening fulfills a long-standing community goal. In 2018, when the Hermon Neighborhood Council asked residents what they wanted to see more of in the neighborhood, the answer was clear: walkable retail and amenities, including restaurants and cafes.

The story illustrates Last Word Hospitality's intentional approach to developing "in-between" neighborhoods rather than adding to already-saturated dining corridors.

Opening with a happy hour was non-negotiable for Fox — a signal from day one that Hermon's is built for locals. Running daily until 6 p.m., there are $10 martinis and food specials priced between $6-8 that include garlic bread, marinated olives and loaded potato fritters. Fox said happy hour sales already match the next two hours combined, proving the pricing strategy is working for neighborhood regulars.

The menu

Chef/partner DK Kolender, whose résumé includes Tartine and Dudley's Market, leads the kitchen with a New American bar and grill menu, offering polished crowd-pleasers with an edge.

Kolender is most excited about the two-sheet lasagna vongole ($36) — clams, cream, guanciale, parmesan and breadcrumbs layered between fresh pasta made daily. The dish evolved from a clam toast he made at Dudley's Market, after weeks of developing a verde lasagna that never quite landed.

A closer look at the Ode to Chez burger — char, melt and a little sauce drip for good measure.

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Jim Sullivan

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Courtesy Hermon's

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Hermon’s two-sheet lasagna vongole, layering clams, cream, guanciale, parmesan and breadcrumbs into a rich, flat-sheet presentation.

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Courtesy Hermon's

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The Ode to Chez cheeseburger ($24) — originally created for a Malibu project lost in the Palisades fires — features soubise fondue studded with green peppercorns, bordelaise onions, Dijon and a sesame milk bun developed with Kolender's former team at Tartine. Skip the $6 fries and opt instead for the loaded potato fritters ($16), topped with cream cheese, bacon and parmesan. It's the kind of indulgence that doesn't leave you weighed down.

Hermon’s loaded potato fritter: golden, layered potatoes crowned with a snowfall of grated cheese.

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Jim Sullivan

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Courtesy Hermon's

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Since the opening, Kolender says the response has been overwhelming.

"We've had people who live down the street here two, three times already," he said. "We know them by name."

For Fox, it's unprecedented.

"I have never opened a restaurant with this much support," she said. "It's an unbelievable feeling."