The bill creates the Building Homes and Jobs Trust Fund in the State Treasury, directs interest earned to the fund, and protects the fund from routine transfers. It sets detailed allocation rules for deposits depending on collection dates (notably rules for moneys collected in 2018 and for moneys collected on or after 2019), including split funding for local planning efforts, homelessness services and housing production, owner-occupied workforce housing, and state-administered programs.
The measure conditions local allocations on documented plans and housing-element compliance, establishes competitive grant rules for certain nonentitlement areas using a federal Section 5306 formula, requires reporting and encumbrance deadlines, and creates specific set‑asides (including a transfer to the California Housing Finance Fund). It also limits administrative costs to 5% and allows the department to adopt implementation guidelines without the Administrative Procedure Act rulemaking process.
These mechanics matter for local governments, housing developers, homelessness service providers, and state budget planners because they lock in allocation percentages, create compliance and reporting obligations, and restrict both transfers and procedural oversight.
At a Glance
What It Does
Creates a dedicated Building Homes and Jobs Trust Fund, directs interest to the fund, and prescribes percentage-based allocations for different housing purposes depending on the date funds are collected. It also imposes eligibility, reporting, encumbrance, and spending deadlines for local allocations, and grants the administering department discretion to adopt non-APA guidelines.
Who It Affects
Local governments that apply for or receive allocations; the Department (presumably HCD) that administers the program; homelessness service providers and housing developers that seek state or local funds; and the California Housing Finance Agency as a designated recipient of a set-aside.
Why It Matters
By spelling out fixed percentage splits, compliance conditions, and reversion rules, the bill would change how state housing dollars flow—prioritizing planning, homeless assistance, owner workforce housing, and a guaranteed transfer to the Housing Finance Fund—while limiting procedural oversight of implementation.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill establishes the Building Homes and Jobs Trust Fund and directs that all investment earnings on fund balances be paid into the fund and largely insulated from routine transfers to other state pools. The fund’s moneys are to be appropriated either in the annual Budget Act or under the bill’s own allocation rules, which vary by the date funds are collected.
For moneys collected in 2018 the bill splits deposits 50/50 between local planning and streamlining activities (including funding for environmental analyses to reduce project-specific review) and direct homelessness assistance and housing production administered by the department. The planning tranche contains a small technical-assistance set-aside, requires local requests before funds are released, and imposes encumbrance and expenditure deadlines; unallocated planning dollars after two years are redirected to an existing Multifamily Housing Program.For moneys collected on or after January 1, 2019 the bill creates a three-part allocation: a 20% carve‑out for affordable owner-occupied workforce housing; a 70% local allocation (with 90% of that amount distributed according to a fixed formula tied to the federal Section 5306 distribution and a competitive program for nonentitlement areas); and a 30% state-administered pool for incentives, agricultural-worker housing, a continuous 15% transfer to the California Housing Finance Fund, and other state uses.
Local governments seeking allocations must submit implementation plans, maintain a compliant housing element, file annual expenditure reports, and prioritize housing for households at or below 60% of AMI.The bill limits program administration costs to 5% of any appropriation, authorizes the department to develop implementing guidelines in consultation with stakeholders, and explicitly exempts those guidelines from the Administrative Procedure Act’s rulemaking requirements. It also contains a targeted restriction on housing funded for agricultural-worker purposes, barring rental, sale, or sublease to agricultural employers (or agents) who employ H‑2A workers until affordability covenants expire, and requires declarations from fund recipients about that restriction.
The Five Things You Need to Know
The bill creates a separate Building Homes and Jobs Trust Fund and requires that interest earned on the fund remain in the fund, insulated from most statutory transfers.
For 2018 collections the bill allocates 50% to local planning/streamlining and 50% to homelessness assistance and related housing production, with local planning funds carrying a technical‑assistance set‑aside and fixed encumbrance/expenditure deadlines.
For funds collected on or after January 1, 2019 the bill directs 20% to affordable owner-occupied workforce housing, 70% to local governments (largely via a Section 5306 federal-funding formula and a competitive program for nonentitlement areas), and 30% to state-administered programs including a continuous 15% transfer to the California Housing Finance Fund.
Local governments must submit a plan, maintain a compliant housing element, file annual reports, prioritize households at or below 60% of AMI, and risk reversion of unused allocations (after five years) to the Multifamily Housing Program or technical assistance funds.
The department may adopt implementation guidelines without following the Administrative Procedure Act, and the bill caps administrative spending at 5% of any appropriation or allocation.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Creates the Building Homes and Jobs Trust Fund and protects earnings
This provision establishes the trust fund in the State Treasury, directs that all interest or other income from investing fund moneys be deposited into the fund, and restricts transfers out of the fund except to the Surplus Money Investment Fund. Practically, that gives the fund a level of budgetary insulation: earnings stay with the program rather than being swept away by general-purpose transfers, and routine cross‑fund movements are blocked.
2018 collections: planning versus homelessness allocations
Moneys collected in calendar year 2018 are split evenly between local planning/streamlining work and homelessness assistance/housing production. The planning half explicitly covers updates to general plans, community plans, specific plans, sustainable communities strategies, and local coastal programs, plus environmental analyses intended to avoid repeated project‑by‑project review. A 5% technical assistance set‑aside funds state support for jurisdictions updating plans. Funds must be requested by local governments, encumbered by a fixed deadline, and expended by a later deadline or they will be redirected to an existing Multifamily Housing Program—a mechanism that pressures localities to move quickly or lose the money.
Post‑2019 formula: owner‑occupied and local allocations
For funds collected on or after January 1, 2019 the bill earmarks 20% for affordable owner‑occupied workforce housing and dedicates 70% for local government allocations. The local share is largely distributed using the allocation formula in 42 U.S.C. §5306 as it operated for FY2017, but nonentitlement-area portions are channeled through a competitive grant program administered by the department. To qualify, local governments must submit a spending plan, have a compliant housing element, file annual reports, and prioritize households at or below 60% of AMI. The bill also allows jurisdictions to pool allocations for joint projects and contains a five‑year use window after which unspent money reverts to state multifamily housing programs.
State uses, agricultural‑worker housing rules, and eligible local expenditures
Thirty percent of post‑2019 deposits are reserved for state programs: incentive grants/loans, agricultural‑worker housing, and a continuous 15% transfer to the California Housing Finance Fund administered by CalHFA. The agricultural‑worker nest contains a compliance and clawback architecture: funds used for housing on or after January 1, 2020 carry a prohibition against renting, selling, or subleasing to agricultural employers employing H‑2A workers for the life of affordability covenants; recipients must declare compliance and may face repayment obligations under cross‑referenced provisions if they violate the rule. The local allocation eligible uses list is broad and includes predevelopment, acquisition, rehab, preservation, operating subsidies, down‑payment assistance, accessibility modifications, and matching funds for local trust funds.
Administrative limits and permitted fund sources
The bill caps program administration to no more than 5% of any appropriation or allocation, a strict ceiling designed to prioritize capital and service dollars. It also confirms that legislative appropriations and any other moneys made available for the fund from any source may be deposited into it, making the fund a cleared receptacle for multiple revenue streams but still subject to appropriation law.
Guideline authority and APA exemption
The department may adopt implementation guidelines in consultation with stakeholders and the bill explicitly removes those guidelines from the Administrative Procedure Act’s rulemaking requirements. That expedites adoption of program rules but reduces formal public‑notice, comment, and judicial review pathways that typically accompany major regulatory programs.
This bill is one of many.
Codify tracks hundreds of bills on Housing across all five countries.
Explore Housing in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- People experiencing homelessness and those at risk — the bill dedicates substantial shares to rapid rehousing, rental assistance, navigation centers, emergency shelter, and new construction or preservation of permanent and transitional housing, channeling funding to services and capital that directly serve this population.
- Lower‑ and moderate‑income homebuyers and workforce households — the 20% owner‑occupied workforce housing carve‑out plus local prioritization for ≤60% AMI households directs resources to buy‑down ownership and income‑targeted housing in high‑need markets.
- Small and rural counties/nonentitlement localities — the competitive grant design and explicit priority points for counties with ≤200,000 unincorporated population or jurisdictions that missed prior awards increase their chance of receiving state support.
- Local governments with compliant housing elements that can submit spend plans — these jurisdictions gain access to substantial flexible capital for a broad set of uses, including predevelopment and matching funds.
- California Housing Finance Agency (CalHFA) — the bill continuously appropriates 15% of the state pool to the California Housing Finance Fund, guaranteeing CalHFA a steady funding stream for mixed‑income multifamily housing.
Who Bears the Cost
- Local governments that lack compliant housing elements or project pipelines — they face reporting, plan‑submission, encumbrance, and five‑year spending deadlines that can cause reversion of funds to state programs if unmet.
- The administering department — the bill gives it new responsibilities to run formula distributions, competitive grants, compliance monitoring, and to administer clawbacks tied to agricultural‑worker restrictions, all within a 5% administrative cap that may constrain staffing and oversight.
- Housing developers and nonprofit sponsors — recipients must accept affordability covenants and various use restrictions (including the agricultural‑employer prohibition for certain funds) that could limit some uses or require additional compliance controls.
- Agricultural employers and contractors that employ H‑2A workers — the statute bars them (and their agents) from occupying housing financed under the agricultural‑worker set‑aside until covenants expire, reducing one potential source of employer‑provided housing.
- State budget and appropriation flexibility — by creating protected fund earnings, explicit percentage splits, a continuous appropriation to CalHFA, and an APA exemption for guidelines, the bill narrows some traditional budgetary and oversight levers.
Key Issues
The Core Tension
The central tension is between speed and targeted impact versus accountability and flexibility: the bill locks in funding priorities and expedites implementation (including by exempting guidelines from APA), which can hasten housing production and service delivery, but those same features reduce procedural transparency, constrain administrative capacity, and fix geographic and programmatic allocations that may not align with future needs.
The bill front‑loads a mix of prescriptive allocations and tight deadlines into a single trust fund. That clarity helps advocates and implementers know where money should flow, but the fixed percentages and the reliance on an historical federal formula (the 2017 Section 5306 distribution) may lock in geographical winners and losers regardless of shifting needs.
The five‑year reversion rule and the 2018 encumbrance/expenditure deadlines create real pressure on jurisdictions still building capacity for large projects; smaller jurisdictions may see funds revert even if projects were viable but slower to start.
The agricultural‑worker restriction is legally and administratively intricate: it aims to prevent certain employer‑provided housing arrangements but creates questions about how to verify employers’ H‑2A status, how to enforce the restriction over long affordability terms, and how repayment/clawback mechanics interact with other funding sources. The explicit exemption of implementation guidelines from the APA raises transparency and stakeholder‑notice concerns.
It accelerates deployment but may increase legal uncertainty and reduce opportunities for formal public input, potentially inviting litigation or political pushback.
Finally, the 5% administrative cap is a blunt instrument. It conserves program dollars for capital and services but may leave the administering department under-resourced for compliance monitoring, audit, and complex program functions (competitive awards, clawbacks, interagency coordination).
That underfunding risk could translate into weak oversight or unaddressed misuse of funds.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.