Governor Newsom Announced Nearly $2.8 Billion in Awards in 2025 to Address Homelessness, Build More Housing, and Support Stronger Communities

Sacramento, CA

As we approach the New Year, Governor Gavin Newsom and the California Department of Housing and Community Development (HCD) issued a flurry of year-end funding announcements that brought this year's investment in affordable housing, homelessness services, infrastructure, and community development to nearly $2.8 billion.

"2025 has been a year marked by unforeseen disasters, remarkable collaboration, and unprecedented investment," said Business, Consumer Services and Housing Agency Secretary Tomiquia Moss. "As promised, the Newsom Administration continues to address challenges head-on-paving the way toward meeting California's housing goals, strengthening local communities, and ensuring our most vulnerable residents are housed and have access to the support and services they need."

Today's awards of $281 million help build 731 new permanent rental homes, fund the repair and construction of accessory-dwelling units, preserve affordable housing, and mitigate disaster risk in local communities.

HCD announced $53.4 million in Local Housing Trust Fund (LHTF) awards for 23 applicants in 18 counties. The LHTF awards will provide matching grants to local and regional housing trust funds established by cities, counties, Native American tribes and nonprofit organizations to support the construction, conversion, reconstruction, rehabilitation, and repair of Accessory Dwelling Units (ADUs) or Junior Accessory Dwelling Units (JADUs). ADUs, commonly known as granny-flats or in-law units, help increase the supply of affordable housing in California, especially in infill areas.

HCD also announced $26.7 million for three projects from the National Housing Trust Fund (NHTF) program. The federally funded NHTF program supports the construction of permanent homes for extremely-low income households. Today's awards will help fund 214 new affordable rental homes in three counties.

Rendering of 300 Alamitos, a property funded by HCD's National Housing Trust Fund program.

More than $26 million awarded from the Permanent Local Housing Allocation (PLHA) Program to seven local jurisdictions was also announced today. The PLHA Non-Entitlement Local Government Competitive Component awards will help support the development of 477 affordable multi-family rental homes. The PLHA program also provides formula grants to entitlement and non-entitlement jurisdictions based on the formula prescribed under federal law for the Community Development Block Grant. HCD recently awarded nearly $25 million to 36 local governments through the PLHA Formula Allocation.

Sugar Pine Village in Lake Tahoe.

Los Arroyos funded by HCD's Permanent Local Housing Allocation Program

HCD also announced $107.5 million in Portfolio Reinvestment Program (PRP) awards. PRP helps preserve affordable housing in California by investing in properties that need repairs and are at risk of converting to market rate. Today's awards support 11 housing communities, helping to improve the quality of life for residents and preserve 491 homes for future generations.

Shotover Inn, a project of HCD's Portfolio Reinvestment Program

In addition, HCD announced a Tribal Homekey award of $10.1 million for the construction of a new 40-unit housing community, with 28 homes reserved for people at-risk of or experiencing homelessness, and $57.7 million to support 27 projects of the Community Development Block Grant Disaster Recovery Resilient Infrastructure Program that assists local jurisdictions with mitigation-related infrastructure needs to support risk reduction from wildfire, flooding, and earthquake hazards.

Just last week, HCD announced another five awards through Proposition 1-funded Homekey+ to create permanent supportive housing for veterans and other Californians with behavioral health challenges. So far in 2025, Homekey+ has awarded $636.1 million to create 37 affordable housing communities with wrap-around services. These communities will add 1,817 new homes, with 454 reserved for veterans.

"From funding the creation of ADUs and permanent supportive housing to preserving affordable homes for future generations, today's awards highlight the Newsom Administration's innovative approach to addressing homelessness and tackling California's affordable housing crisis," said HCD Director Gustavo Velasquez. "As we approach the New Year, we reaffirm our commitment to working with our partners to support our communities and build more housing for all."

Earlier this year, Governor Newsom announced multiple awards to support communities, address homelessness and provide much-needed housing:

• $118.9 million from the HOME Investments Partnerships American Rescue Plan and the Emergency Solutions Grants programs to fund the development of 487 homes, support emergency shelters and homeless outreach, and provide rapid rehousing and supportive services.
• $144.5 million from the HOME Investment Partnerships Program to build multi-family and single-family homes and support local housing assistance programs.
• Nearly $52.6 million from the Disaster Recovery Housing Accelerator Program to help jumpstart construction in two counties severely impacted by winter storms.
• $56 million in Transitional Age Youth Program grants to 54 counties to help provide services and housing for foster youth and young adults at risk of homelessness.
• $181.1 million from the Homeownership Super NOFA program to help thousands of low-income Californians attain or maintain the dream of homeownership.
• $835.3 million from the Affordable Housing and Sustainable Communities program to fund infrastructure and 2,393 new affordable rental homes.
• $52.6 million from the Community Development Block Grants and Emergency Solutions Grant programs to build housing, address homelessness and revitalize communities.

In September, Governor Newsom announced $414 million in awards from the Multifamily Finance Super NOFA (MFSN) program to help create 2,099 new homes, with 2,068 reserved for low to extremely low-income Californians. HCD also announced a special MFSN NOFA (MFSN-LA Disaster) to provide an additional $101 million to support recovery and rebuilding efforts from 2025 wildfires within Los Angeles County. Those awards will be announced in early January 2026.

An approach that works

From the very first moments of the Newsom administration, the national crisis of housing and homelessness - which were decades in the making - has been addressed with ingenuity, seriousness, and expertise. No other state has devoted as much time and attention to these twin problems - and California is a leader in producing positive results. Governor Newsom is creating a structural and foundational model for America:

✅ 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 eachlocal 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.

Reversing a decades-in-the-making crisis

The Newsom administration is making significant progress in 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.