Student Housing Status and CCFC Advocacy

Higher Education Student Housing Grant Program

The Legislature reconvened last week from its summer recess, and there is a renewed focus on community college affordable student housing. CCFC is advocating for changes to the recently-enacted FY 2023-24 budget, which made significant modifications to the Higher Education Student Housing Grant Program. (Click here for more detail on the budget agreement.)

FY 2023-24 Budget Act

The budget modified the funding mechanism for the Higher Education Student Housing Grant Program (HESHGP), shifting the fund source for prior, newly-authorized, and future student housing construction projects from state General Fund to local lease revenue bonds issued by community colleges. This change was not proposed or contemplated during the budget review process this past spring, therefore the Legislature and Administration did not receive feedback from community colleges prior to the budget’s approval.

Additionally, the budget provided $78.5 million (General Fund) to the Chancellor’s Office to support student housing projects. The intent is to provide ongoing, annual support for debt service payments, so that the state still pays the cost of construction for HESHGP projects.

CCFC Advocacy

CCFC is directly and actively advocating for changes to this budget action. We are requesting the following:

• Allow the 12 colleges that received state grant funds in the 2022 Budget Act (worth $546.7 million General Fund) to retain their cash, so that they can continue to move forward.
• For the 7 projects newly authorized in the 2023 Budget Act (worth $464.1 million), shift the financing mechanism to state-issued lease revenue bonds. This would ensure that the state pays all debt service through the full payback period, preserving the ability to construct housing with affordable rents.

The success of the affordable student housing program is contingent upon the state’s direct payment of construction costs. Under the local lease revenue bond framework, the state cannot guarantee that it will maintain its commitment to fund debt service payments over the full repayment term. This is because the current Legislature cannot obligate a future Legislature. Absent that guarantee, the risk would shift entirely to community colleges, who would need to ensure that their projects “pencil out” absent state support – meaning rent revenues would cover both debt service payments and annual operating costs. That would be extremely difficult to achieve with affordable rents. Gaps would need to be bridged by other local fund sources, exposing college General Funds to significant risk.

CCFC is meeting actively with policymakers in the Legislature and Administration, as well as our colleagues at colleges and other higher education organizations. The Legislature recesses for the year on September 14, so we are hoping for progress by that time.

AB 358 (Addis) – Student Housing DSA Exemption

AB 358 (Addis) has been passed by the Legislature and signed into law by the Governor. AB 358 exempts community college student housing projects on community college campuses from the Field Act and submitting plans to the Division of the State Architect (DSA). Colleges may still request review by DSA in lieu of review by the local jurisdiction. This builds upon AB 306 (O’Donnell), which was signed into law in 2021 and exempts K-12 and community college district workforce housing projects from DSA review. It appears that DSA would still have some jurisdiction over access compliance. CCFC supported this bill because it provides an option for colleges to pick the path that works best for their specific project.

Rebekah Kalleen
CCFC Executive Director