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What you need to know: California is continuing to advance Governor Newsom’s strategy to create more homes and boost affordability. Today, the state is awarding funding to create thousands of new affordable homes for California families.

September 22, 2025 - SACRAMENTO — Thousands of new homes are coming to cities throughout the state – leading to greater affordability and stronger communities. As part of the Governor’s statewide strategy to reduce homelessness by increasing housing availability, the California Department of Housing and Community Development today announced the award of over $414 million through an innovative streamlined finance program, paving the way for development of another 2,099 new homes — with 2,068 of those homes reserved for low- to extremely low-income Californians.

In 2019, during his first State of the State, Governor Newsom announced the state would begin focusing on the housing and homelessness crisis — becoming the first Governor in history to make this issue a statewide priority. Governor Newsom has advanced measures to tackle California’s decades-long crisis of housing affordability and homelessness with an unprecedented singular focus.  

Through new programs and funding, California is outperforming the nation in turning around the decades-in-the-making homelessness crisis. A key part of the Governor’s strategy is increasing California’s housing inventory, helping strengthen affordability and helping every family achieve the California Dream.

In September 2020, Governor Newsom signed into law a bill to streamline the state’s complex web of housing finance and create a new process that allows developers to apply to four separate programs through a single application, reducing delays that can drive up costs and derail projects. Modeled on efficiency and cost savings to maximize housing outcomes, the innovative process has awarded $1.622 billion to support the development of 12,676 affordable homes statewide since 2020. These projects are expected to serve 248,993 Californians.

“Over $400 million committed to communities across the state will expedite and expand opportunities to build affordable housing and make much-needed infrastructure improvements,” said Tomiquia Moss, Secretary of the California Business, Consumer Services and Housing Agency. “These awards will galvanize the collective public-private response to serve low-income households, including seniors, Veterans, large families and residents with special needs, and accelerate climate and health outcomes in neighborhoods across California.”

“Governor Newsom’s creation of the Multifamily Finance Super NOFA was a major step in streamlining a complex housing finance system to reduce costs and allow more affordable homes to be built,” said HCD Director Gustavo Velasquez. “His creation of the California Housing and Homelessness Agency will give us the tools to build on this and other Department successes in addressing housing availability and affordability at scale—tackling a crisis decades in the making and strengthening communities throughout California.”

The awards announced today, totaling just over $414.2 million, will make possible the development or rehabilitation of 2,099 homes in 16 California counties. Of those homes, 794 are reserved for extremely low-income Californians—defined as people earning up to 30 percent of Area Median Income (AMI); 866 are reserved for households earning 31-50 percent AMI; and 408 are reserved for those earning 51-80 percent AMI. 

Today’s awards include:

• $244.1 million of MultiFamily Housing program funds to support 10 projects with 769 assisted units. 
• $128.9 million of Farmworker Housing Grant program funds to support 10 projects with 345 assisted units. 
• $28.5 million in Infill Infrastructure Grant Program awards to support development of 553 assisted units, with 370 units reserved for seniors, 316 for large families, and 338 units of permanent supportive housing or for residents with special needs.
• $12.7 million in Veterans Housing and Homelessness Prevention Program funds to create 87 homes for veterans.

These awards follow a recent announcement by the Newsom Administration of continued support for local communities with awards of $106.2 million of voter-approved Proposition 1 funding for the development of hundreds of supportive Homekey+ housing units serving veterans and other Californians with behavioral health challenges. More funding is on the way with HCD reviewing applications for $1.033 billion in additional Homekey+ funding for veterans, in addition to $1.11 billion for projects serving all Californians at risk of homelessness with behavioral health challenges.

Learn more and view a list of recipients here.

California’s foundational model

From the very first moments of the Newsom administration, the national crisis of housing affordability and homelessness has been addressed with ingenuity, seriousness, and expertise. Governor Newsom is creating a structural and foundational model that will have positive impacts for generations to come by:  

✅ Addressing mental health and its impact on homelessness — Ending a long-standing 7,000 behavioral health bed shortfall in California by rapidly expanding community treatment centers and permanent supportive housing units. In 2024, voters approved Governor Newsom’s Proposition 1 which is transforming California’s mental health systems with a $6.4 billion Behavioral Health Bond for treatment settings and housing with services for veterans and people experiencing homelessness, and reforming the Behavioral Health Services Act to focus on people with the most serious illnesses, provide care to people with substance disorders, and support their housing needs.

✅ Creating new pathways for those who need the most help — Updating conservatorship laws for the first time in 50 years to include people who are unable to provide for their personal safety or necessary medical care, in addition to food, clothing, or shelter, due to either severe substance use disorder or serious mental health illness. Creating a new CARE court system that creates court-ordered plans for up to 24 months for people struggling with untreated mental illness, and often substance use challenges.

✅ Streamlining and prioritizing building of new housing — Governor Newsom made creating more housing a top state priority for the first time in history. He has signed into law groundbreaking reforms to break down systemic barriers that have stood in the way of building the housing Californians need, including broad CEQA reforms.

✅ Creating shelter and support — Providing funding and programs for local governments, coupled with strong accountability measures to ensure that each local government is doing its share to build housing, and create shelter and support, so that people rescued from encampments have a safe place to go.

✅ Removing dangerous encampments — Governor Newsom has set a strong expectation for all local governments to address encampments in their communities and help connect people with support. In 2024, Governor Newsom filed an amicus brief with the Supreme Court defending communities’ authority to clear encampments. After the Supreme Court affirmed local authority, Governor Newsom issued an executive order directing state entities and urging local governments to clear encampments and connect people with support, using a state-tested model to address encampments humanely and provide people with adequate notice and support. 

Strong strategy. Real results. 

The Governor’s strategy is producing real results throughout the state. California is making strong progress in reducing homelessness in communities throughout California, with many communities reporting through the state’s support, more people are getting help than ever, and their homelessness rates continue to drop. Through Governor Newsom’s support of local government efforts and state investments, like the funding announced today, California is reversing decades of inaction on homelessness. 

Between 2014 and 2019—before Governor Newsom took office—unsheltered homelessness in California rose by approximately 37,000 people. Since then, under this Administration, California has significantly slowed that growth, even as many other states have seen worsening trends.

In 2024, while homelessness increased nationally by over 18%, California limited its overall increase to just 3% — a lower rate than in 40 other states. The state also held the growth of unsheltered homelessness to just 0.45%, compared to a national increase of nearly 7%. States like Florida, Texas, New York, and Illinois saw larger increases both in percentage and absolute numbers. California also achieved the nation’s largest reduction in veteran homelessness and made meaningful progress in reducing youth homelessness.

Source: Office of the Governor