Design and Construction Report staff writer
A new housing trailer bill legislation signed last week has launched a new phase of the state’s housing strategy with reforms to speed up affordable housing development, lowering construction costs and expanding homelessness prevention efforts.
Legislation updates how California finances and delivers affordable housing, building on the Gov. Gavin Newsom’s efforts to increase housing production and address homelessness through new investments, streamlined approvals and stronger accountability measures.
A signing ceremony was held at Clara E. Chan Lee Residences in Oakland’s Chinatown, a 97-unit affordable senior housing development Cahill Contractors is currently building alongside East Bay Asian Local Development Corporation (EBALDC), just steps from Lake Merritt BART.
The new law (AB 179) streamlines financing and cuts red tape for affordable housing across California, expected to reduce per-unit costs by $more than $60,000.
“We’re proud to be part of a job site that, for a day, became the backdrop for that kind of progress; and even prouder to be delivering the real thing this fall: 97 new affordable homes and a 14,000-square-foot public plaza built on top of a BART tunnel,” Cahill wrote on LinkedIn.
The following changes are included:
- Modernizing California’s housing finance system through One-Stop Shop reforms that streamline project delivery, reduce duplicative reviews, and accelerate affordable housing production.
- Reducing the cost of building affordable housing by an estimated $60,000 to $70,000 per unit through One-Stop Shop financing reforms and impact fee changes.
- Creating a new Disaster Rebuilding Fund (DRF) with $100 million in funding to reduce financing costs for homeowners rebuilding after disasters, helping affected households repair or reconstruct homes more quickly and affordably.
- Extending HHAP with $900 million in FY 2026-27 for another round of state homelessness block grant funding while strengthening accountability through new local matching requirements and Prohousing requirements for direct HHAP recipients that are cities with populations over 300,000 and the counties in which those cities are located, encouraging greater local investment and policies that support housing production.
- Providing multifamily affordable housing resources – $500 million for enhanced state low-income housing tax credits (LIHTC) and $200 million for the Multifamily Housing Program to support the construction and preservation of affordable multifamily housing for low-income families
“When I took office in 2019, my goal was 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. “Through historic investments, stronger partnerships, and greater accountability, we’re seeing real progress that will benefit Californians not just today, but for generations to come.”
The investments are part of a balanced 2026–27 state budget that maintains a $0 deficit this year and next while continuing support for key programs, including the Housing Homeless Assistance and Prevention (HHAP) program.
