Research and Policy

Key Advances Toward a One-Stop Shop for Affordable Housing in California

Sarah Karlinsky, Ben Metcalf, Carolina Reid

Published On April 11, 2026

California is on the cusp of a major transformation of its affordable housing delivery system. Beginning July 1, 2026, the state will launch its first standalone housing agency—the California Housing and Homelessness Agency (CHHA)—with the potential to significantly streamline a fragmented funding system. CHHA will include the creation of a Housing Development and Finance Committee (HDFC), which will administer all of the multifamily affordable housing subsidy programs under the governor’s control.

In tandem with these reforms, the state has created a legislatively enacted working group to determine how to implement a one-stop shop for affordable housing finance, where developers can apply and receive funding through a single application process. Terner Center research has shown that California’s system is more fragmented than other states’, and that states like Massachusetts and Minnesota benefit from having a one-stop shop process. The need to apply for funding from lots of different programs and agencies adds time and costs. Each additional funding source is associated with the addition of roughly four months to the development timeline and $20,460 per unit to the cost of developing affordable housing.

While the establishment of CHHA was an important first step to reducing this complexity, the governor’s budget proposal for fiscal year 2027 seeks to take two further steps toward addressing the challenges of fragmentation.

First, it would move affordable housing capital financing from the Affordable Housing and Sustainable Communities (AHSC) program, which has provided billions of dollars for affordable housing in recent years, to HDFC. Previously these affordable housing funds were overseen by the Strategic Growth Council.

Second, it proposes that 4 percent Low-Income Housing Tax Credits (LIHTC) and tax-exempt volume-capped bond debt—currently administered by the Treasury’s Office via its own competitive process—would be made automatically available to projects receiving an award from HDFC. The proposal contemplates creating a set-aside of 50 percent of volume-capped tax-exempt bond debt and 4 percent credits to support HDFC projects. Projects that receive an HDFC award would be able to rely on this set-aside of 4 percent credits in order to be fully funded.

The impact of this change would be significant. Analyzing data from the last two years of 4 percent applications, the Terner Center finds that 165 affordable housing projects were obligated to apply for state funding via a multi-step and uncertain process: first to state sources under the governor, and subsequently to state sources under the treasurer. Had this proposal been in place, these projects would have moved forward faster and at a significantly lower cost, giving California families much-needed housing sooner and freeing up resources, allowing additional affordable communities to be built.

There are a few implementation questions still to be addressed as this proposal works its way forward—such as the composition of the HDFC oversight committee and how best to ensure that setting aside HDFC 4 percent credits doesn’t limit the availability of LIHTC funding for projects that rely solely on local rather than state gap subsidies. Improving how the state funds affordable housing isn’t going to happen overnight. But the proposal now before the legislature marks a substantial advancement in making California’s affordable housing delivery more effective and efficient.

Key Advances Toward a One-Stop Shop for Affordable Housing in California

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