ACA 4 (HOME Act) amends the California Constitution to create the HOPE HOME Account in the General Fund and requires annual transfers from the General Fund equal to at least 5% of estimated General Fund revenues for each fiscal year beginning 2027–28 and continuing through September 30, 2036. The amendment directs those moneys to the Business, Consumer Services, and Housing Agency (BCSH) and limits expenditures to homelessness prevention and ending programs, development/acquisition/rehabilitation/preservation of rental housing affordable to extremely low-, very low-, and low-income households (including operating subsidies), and affordable homeownership initiatives such as downpayment assistance and new-unit development.
The measure also requires BCSH to prepare a 10-year investment strategy with stakeholder input and to report annually to the Legislature on performance measures and benchmarks through October 1, 2036. The constitutional language conditions transfers so they occur after certain preexisting General Fund obligations are met and gives the Legislature a one-year suspension/reduction mechanism during a declared budget emergency.
For budget and program planners, this amendment locks a floor of long-term, constitutionally protected funding into state fiscal architecture while leaving key details—allocation decisions, benchmarks, and the statutory implementation—to the Legislature and BCSH.
At a Glance
What It Does
Adds Section 24 to Article XVI to create the HOPE HOME Account and requires the Controller to transfer, beginning 2027–28 and each fiscal year through 2036, an amount equal to or greater than 5% of estimated General Fund revenues into that account. The Legislature must appropriate the funds to the Business, Consumer Services, and Housing Agency for narrowly defined homelessness and affordable housing uses.
Who It Affects
State fiscal managers, the Business, Consumer Services, and Housing Agency, affordable housing developers and providers of homelessness services, local governments that receive state housing dollars, and the General Fund (all taxpayers indirectly).
Why It Matters
It constitutionalizes a multi‑billion dollar funding stream for housing and homelessness, shifting program design and delivery power to BCSH and the Legislature and changing the balance between long-term housing investment and other state spending priorities.
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What This Bill Actually Does
ACA 4 turns a policy commitment into constitutional text: it creates a dedicated account inside the General Fund and requires recurring transfers equal to at least 5 percent of estimated General Fund revenues for a defined period. The amendment specifies allowable expenditures—homelessness prevention and services, production and preservation of rental housing affordable at the lowest income tiers (including operating subsidies), and targeted homeownership tools—then funnels the funds through the Business, Consumer Services, and Housing Agency.
The constitutional wording makes the transfer obligation automatic in formula but leaves the appropriation decision and program details to the Legislature.
The bill requires BCSH to build a 10-year investment strategy with stakeholder input and to publish annual progress reports tied to specific performance measures and benchmarks. Those reporting duties are time-limited to the life of the funding window (annual reports due each October 1 through 2036).
The amendment does not prescribe particular allocation percentages among eligible uses, instead creating a governance process—strategy, benchmarks, and annual reporting—to shape how money flows into rental production, operating subsidies, homelessness services, and homeownership programs.On fiscal sequencing, the amendment instructs the Controller to make the transfers no later than October 1 each fiscal year but only after specified preexisting General Fund obligations incurred on or before the amendment’s effective date have been met. It also builds in a one‑year safety valve: when the Governor proclaims a budget emergency, the Legislature may pass a bill to suspend or reduce the transfer for that fiscal year.
The measure includes a technical definition of “budget emergency” tied to recent Budget Acts adjusted for cost-of-living and population growth. This creates a constitutionally entrenched floor for funding while allowing a narrowly defined path to short‑term relief.The measure’s legislative findings attach numeric goals to the funding floor—based on a 5 percent transfer and projected 2025–26 revenues, the drafters estimate roughly $10 billion per year, enough to house at least 50,000 people and produce 40,000 affordable units annually.
Those estimates are policy framing, not binding program rules; the actual output will depend on appropriation choices, project timelines, construction costs, and how much of the transfer the Legislature ultimately directs to capital versus services and subsidies.
The Five Things You Need to Know
The Controller must transfer, no later than October 1 each fiscal year from 2027–28 through 2036, a sum equal to or greater than 5% of that year’s estimated General Fund revenues into the HOPE HOME Account.
Transfers are sequenced: they occur only after all General Fund obligations incurred on or before the amendment’s effective date have been met, specifically including the State’s funding obligations to K–14 public education under Section 8 of Article XVI.
The Business, Consumer Services, and Housing Agency receives the funds by legislative appropriation and may spend them only on (1) homelessness prevention and services, (2) development/acquisition/rehabilitation/preservation of rental housing affordable to extremely low-, very low-, and low-income households (including operating subsidies), and (3) affordable homeownership programs such as downpayment assistance and new-unit development.
BCSH must develop a 10-year investment strategy with stakeholder input and report annually to the Legislature on performance measures and benchmarks; those reports are required each October 1 until October 1, 2036.
The Governor can proclaim a budget emergency and, following that proclamation, the Legislature may pass a bill to suspend or reduce the required transfer for a single fiscal year; the amendment defines “budget emergency” by reference to recent Budget Acts adjusted for CPI and civilian population growth.
Section-by-Section Breakdown
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Findings framing need, scale, and intent
This prefatory section compiles statistics and policy assertions: statewide homeless counts, unsheltered rates, rental shortfalls, and cost‑burden metrics. It includes the drafters’ numeric framing—5 percent of projected General Fund revenues (illustrated as about $10 billion) and aspirational outputs (housing 50,000 people and producing 40,000 units annually). Practically, these findings justify the constitutional change and set expectations for legislators and stakeholders about scale and intended outcomes, but they carry no enforceable programmatic mandates.
Creates the HOPE HOME Account and defines eligible uses
Subsection (a) establishes the HOPE HOME Account inside the General Fund and restricts expenditure authority to appropriation by the Legislature to the Business, Consumer Services, and Housing Agency. The section lists three permitted spending categories—homelessness prevention and services; development, acquisition, rehabilitation, and preservation of rental housing affordable to the lowest-income tiers (with operating subsidies allowed); and affordable homeownership tools. By defining eligible uses constitutionally, the amendment narrows legislative discretion about what state housing dollars can buy, reducing the ability to reallocate funds to other programs or to fund unrelated housing activities.
Requires a 10-year investment strategy and annual reporting
Subsection (b) obligates BCSH to produce a 10‑year investment strategy that links the account’s dollars to measurable outputs and to solicit stakeholder input while doing so. It also mandates yearly progress reports to the Legislature on performance measures and benchmarks through October 1, 2036. The constitutional prescription for strategy plus reporting elevates accountability, but the amendment leaves the content and enforcement of benchmarks to administrative and legislative processes rather than prescribing specific targets or sanctioning failure.
Transfer trigger, timing, and duration
Subsection (c)(1) is the operative funding rule: starting 2027–28 and through the 2035–36 fiscal year (transfers cease September 30, 2036), the Controller must transfer to the HOPE HOME Account a sum equal to or greater than 5% of estimated General Fund revenues, no later than October 1 each fiscal year. The use of a percentage creates a revenue‑linked floor rather than a fixed dollar amount; transfers will expand in booms and shrink in lean years proportionally to estimated revenues.
Sequencing with other obligations and emergency suspension
Paragraph (2) specifies that the transfer calculation occurs only after all General Fund obligations incurred on or before the amendment’s effective date have been met—explicitly including the State’s funding obligations to the public school system and public higher education under Section 8 of Article XVI. Paragraph (3) creates a one‑year escape valve: if the Governor proclaims a budget emergency as defined in the text, the Legislature may enact a bill to suspend or reduce that year’s transfer. The amendment further defines “budget emergency” by reference to whether resources fall below an adjusted recent‑Budget‑Act baseline, using CPI and civilian population growth adjustments to measure adequacy.
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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 immediate risk — the amendment legally prioritizes funds for emergency services, prevention, and operations that can move people into housing and sustain tenancy.
- Extremely low‑, very low‑, and low‑income renters — the constitutional allowance for capital, preservation, and operating subsidies targets supply and affordability for the households most likely to be cost‑burdened.
- Nonprofit and mission-driven housing developers and service providers — a predictable, constitutionally protected funding floor improves project finance viability and supports operating subsidies that many developments require.
- Local governments that partner on housing and services — increased state resources can underwrite local projects, reduce local fiscal burdens, and expand programmatic options like supportive housing and eviction prevention.
Who Bears the Cost
- The General Fund (and thus other state programs and taxpayers) — dedicating a recurring constitutional transfer reduces fiscal flexibility and effectively diverts resources from other priorities unless overall revenues rise.
- Legislative budget-makers — the amendment constrains future budget choices for a decade and forces the Legislature to appropriate the transferred dollars to BCSH rather than to other alternative uses.
- BCSH and implementing agencies — the agency must design a 10‑year strategy, set performance metrics, track results, and manage large sums across capital and services, creating administrative and oversight burdens.
- Programs and constituencies outside the amendment’s narrow eligible uses — education and other protected obligations are explicitly sequenced ahead of transfers, but discretionary programs without constitutional protection risk competition for remaining GF resources.
Key Issues
The Core Tension
The amendment locks a long‑term, constitutionally protected funding floor to tackle homelessness and affordable housing—trading fiscal flexibility for durable resources. That is the central dilemma: stable, predictable funding improves planning and project finance but constrains policymakers’ ability to respond to competing fiscal needs and economic shocks and leaves important allocation choices to future political actors without detailed constitutional guidance.
Several implementation ambiguities will drive litigation risk, administrative friction, and political debate. First, the amendment ties transfers to “estimated” General Fund revenues without prescribing the estimation methodology or error-correction process; timing disputes between the Controller, Administration, and Legislature over which estimate governs could arise.
Second, sequencing language that requires transfers only after "all other General Fund obligations incurred by the State on or before the date upon which the measure... becomes effective have been met" creates complexity: it protects preexisting obligations but leaves open how subsequently enacted entitlements or court‑ordered costs interact with the transfer floor. Third, the constitutional cap on eligible uses is broad in practice—capital, operating subsidies, services, and homeownership tools all compete for the same pot—yet the amendment leaves allocation choices and prioritization to BCSH and the Legislature without numeric floors for production versus services.
Operationally, the fixed percentage model trades flexibility for predictability. In boom years the account will swell; in downturns the one‑year suspension route is possible but requires a gubernatorial proclamation and a responsive Legislature, which may be politically difficult.
The amendment mandates a 10‑year investment strategy and annual reporting but does not specify deadlines for strategy delivery, the legal force of benchmarks, or remedies for missed targets. Finally, the drafters’ numeric framing (e.g., $10 billion and specific housing-output estimates) is aspirational; actual unit production depends on construction costs, local approvals, timing of capital deployment, and how much funding is allocated to operating subsidies and services versus capital projects.
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