Legislature Considers Bill to Amend Student Housing Application Deadlines

The Legislature is poised to consider a budget trailer bill that will make additional modifications to the Higher Education Student Housing Grant Program (HESHGP). The program was created as part of the 2021 budget, and altered previously this summer by AB 183 (see most recent update here).

On Friday afternoon, the Legislature introduced two identical higher education budget trailer bills, AB and SB 190. The Legislature has until midnight this Wednesday, August 31 to pass bills in this year’s legislative session. The Governor has until September 30 to act on bills passed at the end of the session. Budget trailer bills require a majority vote to pass and go into effect immediately upon the Governor’s signature.

AB/SB 190 make the following changes to the HESHGP:

• Remove the October 31 deadline to submit grant applications in 2022 and 2023. The bills would allow each administering agency to set their own application timelines. This means that at this time, we do not know when the application deadline for the FY 22-23 cycle will occur, if AB/SB 190 is signed into law. If AB/SB 190 is not successful, the October 31, 2022 deadline to submit applications would remain in place. The law already states intent to provide $750 million for construction grants in FY 23-24. Budget negotiations for that fiscal year will begin in early 2023.
• The ranking methodology used by the Chancellor’s Office is updated to include “whether the applicant is reapplying with a project that was previously deemed ineligible, with a higher ranking given to the updated project applications that address any issues identified in a previous application.” This suggests that the next funding cycle will accept applications for new grant requests as well as those previously deemed ineligible.
• Administering agencies (i.e., the Chancellor’s Office) shall provide information on project proposals to the Department of Finance, the Legislative Analyst’s Office, and the budget committees of the Legislature on or before February 1 preceding the fiscal year in which program funds are appropriated. For the FY 23-24 budget cycle, this deadline would be February 1, 2023.
• Applications for construction grants may be submitted only “after feasibility studies and all other preliminary planning have been completed and reliable project cost estimates have been developed.”
• Applications for intersegmental projects shall be submitted to each administering entity overseeing a campus or college involved in the project. 
  

Additionally, AB/SB 190 includes detail for the proposed affordable housing Revolving Loan Fund (RLF). The language in AB/SB 190 is substantially similar to what was proposed in AB 1602 (McCarty), which died in Senate Appropriations Committee in mid-August. The RLF would provide zero-interest loans for higher education student and workforce housing projects with below market rental rates. The California School Finance Authority within the State Treasurer’s Office would administer the program for community colleges. Application materials would be available by April 1, 2024, and applications in the first cycle would be due by July 1, 2024, for projects that could begin construction by June 30, 2025, or the earliest possible date thereafter. The bill outlines legislative intent to provide $900 million General Fund in both FY 2023-24 and 2024-25 for this program, for a total of $1.8 billion. AB/SB 190 contains language requiring the use of a skilled and trained workforce for projects over $25 million that utilize the RLF. The requirements are similar but not identical to those currently used by community colleges for Design-Build projects, with additional compliance requirements for community colleges and potential penalties against community colleges for violations of the skilled and trained workforce requirements.

Rebekah Cearley
CCFC Legislative Advocate