Year in Review: 2025 Policy Update from Sacramento
January 15, 2026
Governor Newsom signed 12 bills supported by Eden at the end of the legislative session—including legislation that will expand financing flexibility for tax credit projects, expedite affordable housing permitting, and strengthen the state insurance system after disasters like this year’s LA wildfires.
This year’s state budget also included several major policy changes endorsed by Eden. A full list of state legislation endorsed by Eden is below.
Policymakers in Sacramento made two other noteworthy changes to affordable housing policy this year:
- New housing agency: The Governor will be reorganizing state housing programs next July into the state’s first-ever stand-alone housing agency, the California Housing and Homelessness Agency. This will be the first time California has had a cabinet-level secretary in the Governor’s office exclusively focused on affordable housing. TCAC and CDLAC are not included in this reorganization.
- Cap-and-trade program extension: This year’s legislative climate package included an extension of the state’s cap-and-trade program through 2045 and establishes a new structure for allocating revenues. The Affordable Housing and Sustainable Communities program will receive an ongoing allocation of $800 million each year—a major win for affordable housing.
DETAILS: State and Federal Housing Policy Changes
Federal legislation:
Eden worked closely with national housing groups to secure inclusion of a historic expansion of the federal housing tax credit in this year’s reconciliation bill. The expanded credit will help finance an estimated 1.22 million more affordable homes over the next decade.
Eden has also endorsed seven bipartisan housing bills still making their way through Congress:
- S.2651: ROAD to Housing (Scott, R-SC; Warren, D-MA)
- H.R.4660: Unlocking Housing Supply Through Streamlined and Modernized Reviews Act (Flood, R-NE; Liccardo, D-CA)
- H.R.5798: HOME Reform Act (Flood, R-NE; Cleaver, D-MS)
- H.R.4568: Supporting Upgraded Property Projects and Lending for Yards (SUPPLY) Act (Liccardo, D-CA; Garbarino, R-NY)
- H.R.5601: Faith in Housing Act (Peters, D-CA; Edwards, R-NC)
- H.R.4957: Rural Housing Service Reform Act (Cleaver, D-MS; Nunn, R-IA)
- H.R.2840: Housing Supply Frameworks (Flood, R-NE; Pettersen, D-CO)
State legislation:
Eden endorsed 12 bills signed by the Governor this year, along with three policy proposals included in the final budget. Two $10 billion housing bond proposals supported by Eden have not yet advanced out of the Legislature and will need to be taken up early next year to qualify for the 2026 ballot.
Budget:
- Funding: This year’s budget included $500 million for the Low-Income Housing Tax Credit Program and $120 million for the Multifamily Housing Program.
- CEQA exemptions: The final budget will allow affordable housing projects compliant with local housing elements to move forward more quickly.
- Controlling costs: The budget also imposes a 6-year statewide moratorium on the adoption of new state and local building standards for housing to keep construction costs down.
- Unlocking existing funding: Affordable housing providers with HCD-funded loans will now be allowed to utilize equity from their projects for further investments in affordable housing.
Bills endorsed by Eden, signed by the Governor:
Funding / Financing flexibility
- AB 36 (Soria): Modifies the state “prohousing” designation to allow rural areas to compete.
- AB 480 (Quirk-Silva): Allows affordable housing developers to opt in to certificated tax credits after receiving TCAC awards, increasing the reach of state housing resources.
- SB 686 (Reyes): Allows housing providers to pay off HCD loans before the end of term.
Insurance
- AB 226 (Calderon): Allows the FAIR Plan to access catastrophic bonds through the California Infrastructure and Economic Development Bank to finance the costs of claims.
- AB 493 (Harabedian): Requires financial institutions to pay interest to homeowners for insurance proceeds held in escrow following property damage or loss due to wildfires.
- SB 547 (Pérez): Broadens an existing moratorium on cancellations of residential insurance policies after a disaster to include commercial policies covering affordable housing and non-profits.
Preservation
- AB 726 (Ávila Farías): Allows local agencies to include preservation projects in their Annual Progress Report.
Streamlining
- AB 253 (Ward): Allows developers and homeowners to enlist licensed third-party professionals to expedite the permitting process.
Wildfire response
- AB 299 (Gabriel): Permits hotels, motels, and short-term rentals to provide shelter for more than 30 days to individuals who have lost housing in a disaster without establishing a landlord-tenant relationship.
- AB 301 (Schiavo): Applies the same permitting timelines currently required of local governments to state agencies involved in post-entitlement housing reviews.
- AB 462 (Lowenthal): Exempts ADU coastal development permit requirements in communities subject to a Governor’s proclamation of a state of emergency.
- AB 818 (Ávila Farías): Requires local agencies to approve applications for construction permits for ADUs within 14 days in communities impacted by natural disasters.
Local ballot measures:
Eden supported two local ballot measures approved by voters in November.
- Measure A (Santa Clara): Voters in Santa Clara County approved a sales tax increase that will raise roughly $330 million annually to offset cuts to Medi-Cal in this year’s federal reconciliation bill.
- Measure C (Santa Cruz): Santa Cruz County voters approved a new property and transfer tax that will raise $4.5 million annually for affordable housing and homelessness initiatives.