Student Housing Bills and Budget Subcommittee Hearing on Facilities

The Legislature is currently busy working in two key areas: introducing bills for consideration in 2022, and reviewing the Governor’s 2022-23 budget proposal. New bills must be introduced by this Friday, February 18. Below is an update on student housing legislation and community college capital outlay and facilities issues in the budget.

Student Housing Legislation

With the creation of the Higher Education Student Housing Grant Program in the 2021 Budget Act, there continues to be significant interest in addressing student housing needs for community colleges. Please note that CCFC is reviewing these bills and the CCFC Board of Directors may take positions in mid-March. The bills are at the beginning of the legislative process and face multiple hearings and votes over the next nine months. A few key bills have been introduced:

AB 1602 (McCarty) creates a Revolving Loan Fund (RLF) program for UC, CSU, and CCC housing projects. McCarty proposes a $5 billion investment into the fund in the 2022-23 budget. Student and workforce housing projects would be eligible. Loans would be zero-interest, and the program would be administered by the State Treasurer’s Office. Work may be required to ensure the ability to use Public-Private Partnerships (P3s) to construct and/or operate projects that participate in this program.

AB 1764 (Medina) contains two primary elements:

• It requires CSU, UC, and the California Community Colleges (CCC) to collect data on student housing insecurity, paying special attention to underserved groups. Each higher education segment will submit the first data report to the Legislature and the Legislative Analyst’s Office by October 15, 2023.
• It exempts community college student housing projects from Division of the State Architect (DSA) review. The intent of this provision is to streamline planning and expedite construction of these projects. This builds upon AB 306 (O’Donnell), which was signed into law in 2021 and exempted K-12 and community college district workforce housing projects from DSA review.

State Budget: Community College Facilities/Deferred Maintenance and Student Housing

The Governor released his 2022-23 budget proposal on January 10. The Legislature is in the process of reviewing the details of the proposal in budget subcommittees. Today, Senate Budget Subcommittee No. 1 met to discuss the community college capital outlay facilities and deferred maintenance proposals, as well as student housing. No actions were taken at today’s hearing. Click here to read CCFC’s previous update on the Governor’s January 10, 2022 budget proposal.

Facilities and Deferred Maintenance

The Governor’s budget proposes:

• Facilities: $373 million (General Obligation bond funding) for the construction phase of 17 capital outlay projects anticipated to complete design by spring 2023, and the working drawings phase of one project. The budget does not propose to fund any new CCC capital outlay projects.
• Deferred Maintenance: $387.6 million (one-time Proposition 98 General Fund) to support community college deferred maintenance and energy efficiency projects. The Governor excludes this spending from the State Appropriations Limit (SAL, aka Gann Limit). Districts would have until June 30, 2024 to encumber the funds. The 2021 Budget Act included $511 million for community college deferred maintenance.

The Legislative Analyst’s Office (LAO) indicated that deferred maintenance spending is a good use of one-time revenues, and recommended possibly providing additional one-time funding once updated revenue estimates are available in May. LAO also recommended developing a strategy to address ongoing maintenance needs and address issues such as whether the current statutory expectation for district spending on maintenance is sufficient. CCDs are currently required to spend at least 0.5 percent of their current general operating budget on ongoing maintenance, and the Chancellor’s Office has identified a systemwide backlog of about $1.2 billion.

Senator Min asked why the deferred maintenance funding was proposed from Proposition 98 and not the non-Proposition 98 General Fund. LAO and Department of Finance clarified that it would be exempt from the SAL if funded from either source. Senator Min argued that using non-Proposition 98 revenues would free up space within Proposition 98 for other education priorities. Chair Senator Laird agreed to have further conversations about this issue.

Student Housing

The 2021 Budget Act committed $2 billion over three years to construct student housing projects at UC, CSU, and community colleges, with half of the funds dedicated to community colleges. $25 million of the $2 billion is available for community college planning grants. SB 169 (2021) created the Higher Education Student Housing Grant Program and provided the first $500 million (one-time General Fund) for this purpose. The Governor’s 2022-23 budget proposes $750 million (one-time General Fund) as the second installment of the planned $2 billion investment in student housing.

The Department of Finance (DOF) received 114 applications worth $3.2 billion in the first application filing round. Community college applications include:

• 21 applications for construction worth $1.2 billion
• 71 applications for planning worth $313 million

By March 1, DOF will provide the Joint Legislative Budget Committee a list of projects proposed to be funded by the first $500 million. At this time, DOF is still reviewing the project applications. Grant recipients will be identified by future legislation, in consultation with the Legislature and DOF. At this time, DOF is not proposing significant changes to the program requirements or process for subsequent funding allocations.

In today’s hearing, Dr. Lizette Navarette with the Chancellor’s Office provided background on CCC student housing and explained that the Chancellor’s Office does not have a centralized role. She said that the Board of Governors supports maximum flexibility for local decision-making, and that housing should be connected to academic pathways or other student supports. Senators Min and Laird expressed the desire to do more to support student housing, and specifically to help homeless students. Senator Laird suggested this may be a place to do more with one-time surplus revenues, especially because the SB 169 grant program is oversubscribed.


Rebekah Cearley
CCFC Legislative Advocate