Allison BarnetteGov. Gavin Newsom has set in motion a broad restructuring of California’s housing and homelessness work by creating two new cabinet level agencies intended to advance long term goals for affordable housing and accountability.
On July 11, the governor announced that the state will split the Business, Consumer Services and Housing Agency into the California Housing and Homelessness Agency and the Business and Consumer Services Agency. Concluding a required legislative review period without a veto, the transition is underway but will not be complete until the new structure becomes operational.
The California Housing and Homelessness Agency will focus on housing, homelessness, civil rights and coordination across state programs that handle financing, housing development and interagency homelessness efforts. The Business and Consumer Services Agency will provide focused leadership on consumer protection and industry regulation in areas such as professional licensing, alcohol and cannabis oversight, real estate and financial protection.
The shift is designed to speed housing production, improve the response to homelessness and strengthen civil rights protections for residents and communities most affected by high housing costs, according to state officials. California’s affordable housing finance system is currently spread across multiple departments, which developers say adds delays and drives up costs. Bringing core housing and homelessness functions together is intended to streamline funding, reduce overlap and move projects quickly.
The reorganization supports the administration’s longer range planning target of 2.5 million new homes by 2030, including one million affordable units. The need for an increased supply is underscored by national data showing that homelessness rose an estimated 18% between 2023 and 2024 to about 770,000 people. California accounts for roughly 24% of that total, yet its increase over the same period was about 3%, below the national rate. California also reported the largest decline in veteran homelessness among states in the most recent data release, according to state officials.
Even with slower growth, California continues to face a severe unsheltered homelessness challenge tied to a long-running shortage of affordable homes and a high cost of living. State investments, local partnerships and targeted programs have helped moderate recent increases, and the governor argues that elevating housing and homelessness to cabinet status will keep pressure on results.
The new agencies are scheduled to take effect July 1, 2026, when the existing Business, Consumer Services and Housing Agency will be dissolved.
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