Newsom’s Budget Proposes Delays in Affordable Student Housing Programs

California Gov. Gavin Newsom speaks at a press conference in Universal City, Calif., on June 15, 2021. Alberto E. Rodriguez/Getty Images

Amid a $22 billion shortfall, Gov. Gavin Newsom’s 2023-24 state budget proposal (pdf) revealed this week suggests delaying several affordable student housing projects.

Newsom recommended delaying $250 million of anticipated funding to the Higher Education Student Housing Grant program—established under the 2021 Budget Act—which provides funds to the state’s community college, University of California (UC), and California State University (CSU) systems to build affordable student housing near campus for low-income students.

Additionally, the governor suggested postponing by one year the creation of a student housing revolving loan program to the higher education systems—originally promised in last year’s budget.

The program would have seen $1.8 billion in one-time funding over the next two years—bringing the state’s total commitment to affordable student housing to about $4 billion.

Instead, Newsom proposed giving the program $650 million in 2024 and the remaining $1.15 billion the next year.

The governor reiterated his commitment to his plan to bring affordable student housing to California in a Jan. 10 press conference, saying such is one piece of a larger plan for debt-free college.

“That student housing commitment ... [will] address the fundamental, underlying cost ... the full cost of attendance,” he said. “Debt-free college continues to be a priority, so that’s in the bucket of keeping our promises.”

The delays to affordable student housing come as Newsom decided to give both the UC and CSU systems a 5 percent increase this year despite the budget shortfall.

“Despite a shortfall, we’re seeing a 5 percent increase in the base support of UC and CSU. We are fulfilling that commitment; we are not backing away from that,” Newsom said in the press conference.

The increases amount to $216 million in ongoing funding for UC and $227 million for CSU.

The increases fulfill the pledge Newsom made last year to give the systems $39.6 billion with 5 percent annual increases for the next 5 years if they agree to work toward improving graduation rates and enrollment rates, particularly among California residents (pdf).

This year, the UC system will receive an additional $30 million as an incentive to boost enrollment among California residents.

The state’s Legislative Analyst Office will conduct an analysis of the budget before it is sent to the state legislature for hearings. After revisions in May, it is expected to be finalized June 15 and goes into effect July 1.