May 29, 2025

The Little Hoover Commission met for a regular business meeting on Thursday May 29th, 2025, and the main discussion surrounded the draft report on the proposed reorganization of BCSH which was prepared by staff. The Commission largely supported the staff recommendation to move the reorganization forward.

The current version of the commission’s report is still in draft form, therefore details contained within this memo or the linked report are subject to change. Below are the nine recommendations proposed in the draft report which form our readout of the pertinent parts of the meeting. 

Recommended Companion Legislation on Organizational Structure and Efficiency:

• Recommendation 1: Require an examination of all homeless programs and assess whether any currently in other agencies should be overseen by the new California Housing and Homelessness Agency. If so, develop a plan for transferring the programs to the agency.  
• Recommendation 2: Reduce the administrative burden placed on both those providing and consuming homeless services by streamlining and aligning program, reporting, and application requirements.

Recommended Companion Legislation on Strong and Ongoing Oversight:

• Recommendation 3: Require reports from both new Agencies on a set timeline that detail progress on specified metrics.
• Recommendation 4: Establish a formal mechanism for stakeholder feedback on implementation.

Recommended Companion Legislation on Affordable Housing Reforms:

• Recommendation 5: Enact a Memorandum of Understanding or other cooperative arrangement between the Governor and the Treasurer to create a unified application and review process for financing affordable housing.

Recommended Companion Legislation on Consumer Protection Reforms:

• Recommendation 6: Establish an independent enforcement body, separate from the licensing boards themselves, to handle disciplinary cases relating to professional malpractice.
• Recommendation 7: Create an independent fee-setting commission to determine board fees based on operational needs.
• Recommendation 8: Reduce the number of professional board members and/or develop more nuanced requirements for board membership to better serve industry, consumer, and state interests.
• Recommendation 9: Improve the quality and transparency of complaint reporting to help guide policy, including educational and experience requirements for licensure.

Action Taken by the Commission

The Commission moved to accept recommendations 1-5 with an amendment to add clarifying language on the need for economic efficiency and to employ cost saving strategies through the economy of scales. Recommendations 6-9 were removed from the report as the commission believed these diluted the reorganization’s original intent of improving organizational efficiency and addressing the housing affordability crisis.

There was very little conversation on Recommendation 5 and TCAC and CDLAC were not mentioned by any of the commissioners. Contained in the current draft form of the report is further context for Recommendation 5 and we have included that text below: 

” California is taking steps to address the problems of fragmentation. Indeed, the reorganization plan states that a key responsibility for the new Housing Development and Finance Committee will be to facilitate a one-stop shop for developer-facing multifamily affordable housing finance programs. We understand that due to the Constitutional prohibition on the use of the reorganization process to change the duties of elected officials, the Governor’s proposal could not recommend removing programs from the Treasurer’s purview, and we do not recommend that here. Requiring a full merger at this time could result in the unintended consequence of losing efficiencies in some programs that are widely viewed as operationally effective. However, we believe that additional, structured cooperation between the programs is needed. 

Little Hoover Commission The Legislature has mandated similar reform. In 2023, lawmakers enacted AB 519 (Schiavo), which created the Affordable Housing Finance Workgroup. This working group will create recommendations and a timeline for HCD, CalHFA, TCAC, and CDLAC to create a consolidated application and coordinated review process for grants, soft loans, low-income housing tax credits, tax exempt bonds, federal funds as applicable, and other types of subsidies for multifamily affordable housing. The working group is to submit their recommendations to the four housing entities and the Legislature by July 1, 2026. By January 1, 2027, the four housing entities must submit to the Legislature a plan to update their programs to implement the working group’s recommendations. 

These actions are a long-needed first step to creating a unified application and coordinated review process. We believe that in addition to the Legislature’s requirement, a more formal instrument of cooperation among the programs that ultimately report to different constitutional officers will help to create a truly consolidated application and coordinated review process, helping to better meet the housing needs of Californians. ” 

CCAH will continue to engage on this important issue and welcomes your feedback.