In a significant move to address California’s housing crisis, Governor Gavin Newsom has signed Assembly Bill 179, a landmark legislation aimed at modernizing the state’s affordable housing finance system. This reform is part of the 2026-27 budget, which boasts a $0 deficit, ensuring financial stability while protecting key state programs.

The new legislation is designed to streamline project delivery, reduce duplicative reviews, and accelerate the production of affordable housing. It also includes provisions to reduce the cost of building affordable housing by an estimated $60,000 to $70,000 per unit, making it easier to finance and construct more homes.

Key Reforms and Their Impact

The legislation introduces several key reforms that are set to transform California’s housing landscape. One of the most notable is the creation of a One-Stop Shop system, which aims to streamline the approval process for housing projects. This system is expected to reduce bureaucratic hurdles and speed up the construction of affordable homes.

Additionally, the bill establishes a Disaster Rebuilding Fund with $100 million in funding. This fund will help homeowners affected by disasters to rebuild their homes more quickly and affordably. The legislation also extends the Housing Homeless Assistance and Prevention (HHAP) program, providing $900 million in funding for another round of state homelessness block grants.

Addressing the Housing Shortage

Since taking office in 2019, Governor Newsom has been focused on reversing decades of inaction on housing and homelessness. His administration has implemented unprecedented policy and structural changes to better address these crises. These efforts have resulted in a 59% increase in residential construction since 2019 and a 57% reduction in average housing entitlement timelines.

The reforms have also led to significant reductions in homelessness. California has seen the largest statewide reduction in unsheltered homelessness in 16 years, with a 9% decrease in 2026. The state also reduced unsheltered homelessness by 8,391 people, or 6.8%, more than any other state. 8%, marking the largest statewide decline since 2009.

Expanding Affordable Housing Resources

The legislation includes provisions to provide multifamily affordable housing resources. It allocates $500 million for enhanced state low-income housing tax credits (LIHTC) and $200 million for the Multifamily Housing Program. These funds will support the construction and preservation of affordable multifamily housing for low-income Californians.

Governor Newsom’s housing strategy also includes groundbreaking reforms like the legislative changes signed last year, which deliver foundational changes to break down systemic barriers. These changes have helped connect hundreds of thousands of people at risk of or experiencing homelessness with vital supports.

As California continues to grapple with its housing crisis, these reforms represent a significant step forward. By reducing costs, streamlining the approval process, and providing additional funding for affordable housing, the state is taking concrete actions to ensure that every Californian has a place to call home.