- “California’s cap-and-invest program is doing exactly what it was designed to do: cut pollution and reinvest back into our communities.” – Governor Gavin Newsom
by Vanguard Staff
SACRAMENTO – Governor Gavin Newsom on Wednesday announced more than $865 million in new housing, transportation, and climate-resilience investments funded entirely by payments from major polluters under California’s cap-and-invest program. The funding will support thousands of new affordable homes across the state, major green transportation upgrades, and community-level climate resilience projects, including $185.6 million directed to Los Angeles County as it rebuilds after this year’s wildfires.
The Governor’s office said the awards will support new affordable housing in 39 communities and advance transit, resilience, and agricultural conservation projects statewide. Officials emphasized that the funding reflects the state’s model of requiring polluters to pay for the climate impacts they generate, with the proceeds reinvested into communities.
“California’s cap-and-invest program is doing exactly what it was designed to do: cut pollution and reinvest back into our communities,” Governor Newsom said. “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.”
According to the administration, the California Climate Investment program uses revenues generated by the mandatory purchase of greenhouse-gas allowances to fund environmental and public health improvements, especially in communities disproportionately impacted by pollution and climate change. State leaders said this funding is tied to the Governor’s effort to build “a California for All,” increasing housing supply while protecting public health and the environment.
The state noted that investments reached communities recovering from wildfire damage in Southern California and agricultural areas in the Central Valley, where climate-related disruptions threaten long-term stability.
With Wednesday’s announcement, the California Strategic Growth Council surpassed $5 billion in total investments. The council awarded nearly $1 billion in this round alone to fund affordable housing, community resilience, and agricultural conservation. State officials said the awards fund affordable housing and transportation near jobs and schools, support compact development, protect farmland, and deliver community-driven climate solutions in some of the state’s most disadvantaged neighborhoods.
“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 Strategic Growth Council approved more than $866 million for 39 projects across three major programs. The Affordable Housing and Sustainable Communities Program received $835,318,208 for 21 housing and transportation projects. The Transformative Climate Communities Program was awarded $29,484,224 from anticipated 2026–27 Proposition 4 funds for four projects. The Sustainable Agricultural Lands Conservation Program received $2,051,490 for 14 capacity-building efforts across 25 counties.
“These community-driven solutions prove that California leads on climate and leaves no one behind,” said California Secretary for Environmental Protection Yana Garcia. “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.”
Under this funding round, AHSC projects will create 2,393 new rent-restricted homes, nearly two-thirds of which are reserved for extremely low-income or very low-income households. State officials said the investments include 30 new zero-emission transit vehicles, approximately 150 bus shelters, 45 miles of new bikeways, and 20 miles of safe pedestrian walkways. The state estimates the transportation improvements will remove the equivalent of 209,410 gas-powered car trips from California roads each year.
The projects are located statewide, including in the Central Coast, Coastal Southern California, Inland Southern California, the North State and Sierras, the Sacramento region, San Diego, the 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.”
The Sustainable Agricultural Lands Conservation Program continues to support balanced growth by protecting farmland from development while coordinating with AHSC to direct new housing into existing communities. The program has generated 60 acquisition projects for future easements and protected more than 41,000 acres of agricultural land. The state has awarded $613 million to 245 easement projects, 15 fee-acquisition efforts, 42 planning initiatives, 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.”
The TCC Program, which now totals $453.5 million in implementation grants, enables communities most impacted by pollution to develop clean transportation, renewable energy projects, affordable housing, and urban greening initiatives.
State officials said all three programs demonstrate Newsom’s ongoing commitment to community-driven climate adaptation, expansion of affordable housing, conservation of working lands, and long-term reduction of carbon emissions.
The Governor’s office reiterated that addressing the state’s housing and homelessness crisis remains a top priority. Since taking office in 2019, Newsom has advanced new enforcement and accountability measures for local governments, restructured state systems to accelerate housing production, expanded mental health services, and launched reforms designed to produce more housing more quickly.
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