Gov. Gavin Newsom
Gov. Gavin Newsom has signed new legislation aimed at expanding affordable housing, reducing construction costs and speeding up housing development across California as part of the state’s 2026-27 budget.
Assembly Bill (AB) 179, signed July 17, modernizes California’s affordable housing finance system by streamlining project approvals, expanding funding for housing programs and creating new financing tools for homeowners rebuilding after disasters. State officials said the measure is intended to help increase housing production while strengthening efforts to address the state’s housing affordability and homelessness challenges.
The legislation introduces a new “One-Stop-Shop” financing system designed to reduce duplicative reviews and accelerate affordable housing projects. According to the governor’s office, the reforms are expected to lower construction costs by an estimated $60,000 to $70,000 per affordable housing unit, allowing existing state investments to finance more homes.
“When I took office in 2019, my goal was clear: to reverse decades of inaction on housing and homelessness and ensure there was enough housing and care for people to leave the streets,” Newsom said in a statement. “I’m grateful for the Legislature’s partnership, as together we add to this proven foundation with new laws that cut red tape, expand financing opportunities, and help communities build housing faster.”
The measure also establishes a $100 million Disaster Rebuilding Fund to help homeowners repair or reconstruct homes damaged by disasters. In addition, the budget includes $900 million for another round of Housing, Homelessness Assistance and Prevention grants while adding new accountability requirements for certain cities and counties receiving state funding.
To support affordable housing development, the budget provides $500 million in enhanced state low-income housing tax credits and $200 million for the Multifamily Housing Program to build and preserve affordable rental housing for low-income Californians.
According to the governor’s office, California has made progress in increasing housing production since 2019. Annual residential construction has risen by 59%, from about 70,000 homes in 2018 to approximately 111,000 in 2024. The administration also reported that more than 682,000 homes have been built statewide during that period and that the average time from development application to entitlement has dropped from 160 days to 68 days.
State officials also highlighted recent declines in homelessness, including what they described as the state’s largest reduction in unsheltered homelessness in 16 years.
