AMENDED IN ASSEMBLY AUGUST 21, 2026

AMENDED IN ASSEMBLY AUGUST 13, 2026

AMENDED IN ASSEMBLY JULY 2, 2026

AMENDED IN ASSEMBLY JUNE 18, 2026

AMENDED IN ASSEMBLY JUNE 11, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

94

Introduced by Senator Durazo

February 20, 2026

An act to add Chapter 20 (commencing with Section 50899.15) to Part 2 of Division 31 of the Health and Safety Code, relating to housing developers.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department provides assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects, as provided.

This bill would establish the Affordable Housing Risk Reduction Program, administered by the department, to provide technical assistance and supportive resources to affordable housing providers to help them mitigate risk in their portfolio and secure more affordable insurance options. Upon appropriation, the The bill would require the department to develop technical assistance to support affordable housing providers, and would authorize the department and third-party consultants to provide both individual technical assistance to affordable housing providers and develop technical assistance tools that can be made broadly accessible to those providers. The bill would require the department to adopt emergency regulations to implement the program, as specified, and, by January 30, 2029, adopt permanent regulations for the operation of the program.

The people of the State of California do enact as follows:

SECTION 1.

The Legislature finds and declares all of the following:

(a) The United States is facing an industrywide insurance crisis and affordable housing providers in urban, suburban, and rural communities across California are facing limited availability of insurance coverage, significant premium and deductible cost increases, with some facing price increases as high as 500 percent, and reductions in the scope and quality of coverage. These issues are present in property, liability, and builder’s risk insurance.

(b) Affordable housing providers have limited options to manage increased insurance costs due to their mission and legal requirements to keep rents at affordable levels for low-income households.

(c) As a result, affordable housing providers are particularly vulnerable to insurance cost increases, which now present an urgent threat to the fiscal solvency and stability of existing and new affordable housing across California. Without affordable insurance, some affordable housing providers may not be able to construct affordable housing projects.

(d) In this insurance environment, affordable housing providers have demonstrated an interest in alternative risk financing options to help increase availability and affordability of coverage, as well as an interest in pursuing risk mitigation strategies to lower the risk profile of specific properties and their portfolios overall.

(e) However, many affordable housing providers, particularly nonprofits, face challenges joining existing or starting new alternative risk financing entities due to cost and other access barriers.

(f) Making technical assistance and supportive resources available to affordable housing providers can help make joining alternative risk financing entities more accessible and affordable.

(g) Providing a statewide option for affordable housing providers to partner with public agencies may also help pool the resources of nonprofit housing developers to more effectively address rising insurance costs on a statewide basis.

SEC. 2.

Chapter 20 (commencing with Section 50899.15) is added to Part 2 of Division 31 of the Health and Safety Code, to read:

Chapter 20. Affordable Housing Risk Reduction Program

50899.15.

(a) The Affordable Housing Risk Reduction Program is hereby established to provide technical assistance and supportive resources to affordable housing providers to help them mitigate risk in their portfolio and secure more affordable insurance options. The program shall be administered by the Department of Housing and Community Development.

(b) For purposes of this chapter:

(1) “Alternative risk financing entities” means entities that manage risk outside of traditional commercial insurance lines, including, but not limited to, captives, risk retention groups, and joint powers authorities.

(2) “Department” means the Department of Housing and Community Development.

50899.16.

(a) Upon appropriation by the Legislature for purposes of the program, the The department shall develop technical assistance to support affordable housing providers that are preparing for joining and joining alternative risk financing entities, which may include, but is not limited to, any of the following:

(1) Analyzing risk and identifying the most impactful risk mitigation measures.

(2) Assisting affordable housing providers to implement risk mitigation measures, including, but not limited to, locating necessary funding.

(3) Identifying alternative risk financing entities and approaches, and assisting during the application process.

(b) The department may contract with third-party consultants to assist with the development, implementation, and administration of the technical assistance described in subdivision (a).

(c) The department or third-party consultants may provide both individual technical assistance to affordable housing providers and develop technical assistance tools that can be made broadly accessible to affordable housing providers, including, but not limited to, training and best practice guides.