The added costs are due to ongoing interest payments, adjusted for inflation. While the bond route gives the state fiscal breathing room now, an analyst with the Legislative Analyst’s Office told senators last week that the final price tag will be 1.4 times the cost of the projects than had the state supplied the money upfront. The UC told members of the Assembly May 16 that if interest rates on borrowing rise, the UC would need to come back to lawmakers to get more than $30 million a year. Under the new plan, the UC and CSU would issue bonds to cover their entire share of the housing grant - both the amount they got for 2022-23 and the sum they were promised for 2023-24 - for a total of $1.1 billion.Ĭalifornia would cover the debt the UC and CSU would absorb, which the governor’s administration estimates to be about $30 million annually for the UC and $45 million for the CSU. He also proposed stalling the zero-interest loan program by sending the campuses no money in 2023-24 and instead distributing the loan dollars in the subsequent two years.īut in his May revision to the budget, Newsom pursued a different tack that simultaneously frees the state from $1.1 billion in immediate financial obligation and sends all the housing grant money to the UC and CSU that last year’s budget deal promised, without delay. Rather than issuing $750 million in grants for 2023-24, the governor wanted to instead send $500 million this fiscal year and the remaining $250 million next fiscal year. With a then-projected state deficit of $22.5 billion, Newsom started off the budget negotiating season in January by proposing to delay the timeline of the 2022-23 budget deal with lawmakers. Eventually, the pot is refilled, allowing the state to underwrite future campus construction for student, staff and faculty housing. The idea is that the campuses take the money, build affordable dorms - though what affordable means isn’t yet defined - and then repay the debt over time with student rent. Last year’s budget promised another $750 million in housing grants to the UC, CSU and community colleges in the spending plan due in June.Īnnual rent for dorm beds built with these grant dollars will be 15% of a county’s “area median income” - so about $800 a month in Los Angeles.Īlso in last year’s budget deal was a plan to distribute zero-interest loans to the UC, CSU and community colleges in 2023-25 totaling $1.8 billion. So far, about $1.4 billion in grants has been doled out to the systems - all part of the 2022 state budget. ![]() While the UC and CSU have historically self-financed their own student housing, this money is designed to help the campuses provide students less expensive housing. ![]() The supersized down payment on more affordable beds underscores the changing attitudes about college affordability and what the government’s role should be in helping students cover not just tuition, but the total cost of attending school - including housing. ![]() The state’s interest in student housing is new, a response to the hundreds of thousands of college students in desperate pursuit of affordable homes. The money is the total of two programs - pots one and two - that were birthed in the last two years of state budgets. What were the original plans for the $4 billion? The move would mean the University of California and California State University get all the grant money they were promised without delay in 2023-24, while community colleges would receive all but $95 million and the rest the following year.īut Newsom still wants to delay by a year $1.8 billion in affordable student housing loans for campuses - that’s pot two. Pot one is roughly $2.2 billion in grants for University of California, California State University and California Community Colleges. Well technically it’s two pots, or two pots nested within one larger pot. ![]() Here’s the latest on what you need to know about a pot of $4 billion. In that time, the state budget hole has grown to $31.5 billion. But other housing funds would still be delayed. Now, with his revised May budget, Newsom wants to restore some of the money he wanted delayed. Fast forward to January 2023 and California’s facing a then-$22.5 billion deficit, and his administration wanted to delay some of the money by at least a year. Gavin Newsom and lawmakers last year agreed to distribute $4 billion to the state’s three higher education systems with a mix of loans and grants through 2024-25 - which would add at least 20,000 beds at affordable rents. Since then it’s been a roller coaster ride. Starting in 2021, California took more of an interest in constructing affordable student housing.
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