California: Governor Newsom creates new housing and transportation using nearly $1 billion paid by big polluters 
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Dec 10, 2025

Governor Newsom creates new housing and transportation using nearly $1 billion paid by big polluters

Thousands of new homes coming to California, including in Los Angeles

What you need to know: California just delivered funding for thousands of new affordable homes and green transportation upgrades in 17 communities — all funded by $865 million paid by big polluters through the state's cap-and-invest program.

SACRAMENTO – Governor Gavin Newsom today announced more than $865 million in new investments — funded entirely by big polluters — to build affordable housing, expand transit, and protect communities from climate change. The awards include funding for new affordable housing in 39 communities across the state, thousands of new homes, and major sustainable transportation upgrades, with $185.6 million going to Los Angeles County as it rebuilds infrastructure after this year's devastating wildfires.

California's cap-and-invest program is doing exactly what it was designed to do: cut pollution and reinvest back into our communities. We're seeing the results — thousands of families getting access to new homes and neighborhoods statewide, benefiting from payments made by polluters. We're seeing the dividends through real results.  We're not stopping, because real climate leadership means pairing ambition with equity and urgency to help those who need it the most.

Governor Gavin Newsom

Making big polluters pay for sustainable growth

The California Climate Investment funding is part of the state's Cap-and-Invest program, which requires polluters to buy allowances for the greenhouse gases they emit. The funding puts billions of dollars to work reducing greenhouse gas emissions, strengthening the economy, and improving public health and the environment — especially in disadvantaged communities. The funding directly supports the Governor's work to build a California for All, meeting the housing needs throughout the state while also protecting California's climate.

By investing in the communities hit hardest by climate impacts — from wildfire recovery in Southern California to agricultural preservation in the Central Valley — California is using California Climate Investment funds to protect health, stability, and opportunity across the state.

More than $5 billion in sustainable investment

The California Strategic Growth Council (SGC) today surpassed a historic $5 billion investment milestone after awarding nearly $1 billion — the council's largest award announcement — to affordable housing, community resilience, and agricultural conservation projects. These investments:
  • Fund affordable housing and transportation projects close to jobs, schools, and other daily destinations.
  • Build climate resilience through protecting our productive farmlands and encouraging compact transit-oriented communities.
  • Support community-led climate solutions that achieve major environmental, health, and economic benefits in California's most disadvantaged communities.

Santa Monica, CA — This mixed-use building with 122 affordable homes in the heart of the city, is designed to serve families and individuals earning 30%–60% of the AMI, and will be setting aside 50 homes for formerly homeless individuals, supported by project-based vouchers from the Santa Monica Housing Authority.

"This milestone reflects our commitment to keeping communities safe and healthy for the long haul," said SGC Executive Director Erin Curtis. "These investments will help families breathe cleaner air, stay protected during extreme heat, find stable places to live and work, and preserve the lands that feed us. Crossing the $5 billion mark is about people-centered resilience and showing real partnership with the neighborhoods hit first and worse by climate impacts. We are so proud to be a part of that!"

The funding approved today by the Strategic Growth Council, included more than $866 million in grant funding for 39 projects within three programs:
"These community-driven solutions prove that California leads on climate and leaves no one behind," said California Secretary for Environmental Protection Yana Garcia, who is a member of the council. "This billion-dollar investment delivers cleaner air, healthier people, and good jobs across California—furthering our deep commitment to building healthy and sustainable communities for everyone."

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San Francisco, CA — This building will create 187 affordable senior homes​ that will prioritize LGBTQ+ elders, long-term HIV/AIDS survivors, formerly homeless individuals, and veterans earning 30-60% of the area median income.

Thousands of new homes and needed infrastructure.

This round of Affordable Housing and Sustainable Communities will build healthier communities and protect the environment by supporting the creation of 2,393 new rent-restricted homes, with almost two-thirds of those units dedicated to extremely or very low-Income households. Not only will these projects build much-needed affordable housing, but they create needed sustainable infrastructure:
  • Over 30 new zero-emission public transit vehicles
  • Approximately 150 new bus shelters
  • 45 miles of bikeways
  • 20 miles of safe, accessible walkways.

The impact of these projects will be equivalent to 209,410 gas-powered car trips removed from the road annually. Projects are located throughout the state in the Central Coast, Coastal Southern California, Inland Southern California, the North State and Sierras, the Sacramento area, the San Diego area, the San Francisco Bay Area, and the San Joaquin Valley.

"California continues to build affordable homes that strengthen our climate resilience," said Business, Consumer Services and Housing Agency Secretary Tomiquia Moss. "With more than $4.8 billion invested to date, we are creating healthier, more connected neighborhoods where all Californians can thrive. Our state and our Governor are all in when it comes to supporting safe and livable communities."

Protecting agricultural lands

AHSC's subprogram, Sustainable Agricultural Lands Conservation (SALC), works to balance building with conservation. The two programs work together to ensure that California is building affordable new homes quickly, in the right places, while protecting open spaces and working agricultural lands at risk of development. The SALC Capacity Grants support early-stage planning, partnerships, and technical efforts that protect farmland, reduce sprawl and keep climate-beneficial agriculture in production.

Through the program, 60 acquisition projects have been developed for SALC acquisition applications and 41,837 acres protected. To date, SGC has awarded $613 million in SALC grants to 245 easement projects, 15 fee acquisition projects, 42 planning projects and 39 capacity projects.

"California's farms and ranches help to feed America and are the lifeblood of rural communities across our state," said California Natural Resources Agency Secretary Wade Crowfoot. "State funding through this program protects these working lands from urban sprawl and helps to steer new development into existing communities where jobs and infrastructure already exist. Conserving these agricultural lands also protects food production, limits traffic and pollution in our rural areas, and protects open space across our state."

San Diego, CA — This climate-smart, equity-centered development just 0.2 miles from San Diego's primary multimodal transit hub​, will create 164 affordable homes​ of which 25% of units are reserved for individuals and families at risk of homelessness.

New clean transportation projects

The funding today also adds to existing TCC Implementation Grants, bringing the total funding to $453.5 million. This program empowers communities most impacted by legacy pollution to design and implement projects to advance clean transportation, affordable housing, renewable energy, energy efficiency, urban greening and more.

The three programs build on Gov. Gavin Newsom's commitment to put communities first and build adaptation and resilience, expanding access to affordable housing, conserving working lands and reducing carbon emissions through community-led solutions.

For more information on Strategic Growth Council, click here.

Strategies that work

Governor Newsom is the first Governor to make addressing the housing and homelessness crisis – a decades-in-the-making issue – a top priority. Since taking office in 2019, Governor Newsom has created unprecedented policy and structural changes in state government to help California better address its housing and homelessness crises, including additional and unprecedented support for local governments, stronger accountability and enforcement, transformational changes to mental health services and state government, and groundbreaking reforms to create more housing, faster than ever before.

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