A permanent source of funding for affordable housing in California has been proposed by state Senate President Pro Tem Darrell Steinberg.

The new plan calls for revenues from a cap-and-trade program to be prioritized for affordable housing and public transit. The program is estimated to generate between $3 billion and $5 billion a year, with 20 percent of the funds going to the development of affordable homes near transit.

“This proposal would bring much-needed investment to build homes close to transit centers and is welcome news particularly for the state’s urban areas,” says the California Housing Consortium and Housing California in a joint statement. “We call on California’s elected leaders to make this proposal the starting point for a comprehensive statewide funding strategy to increase the supply of affordable homes in communities across the state, create jobs, reduce homelessness, and improve health and educational outcomes.”

The proposal from Steinberg (D-Sacramento) is a shift from an earlier plan to curtail carbon emissions. That controversial plan called for a carbon tax rather than have industry buy allowances for greenhouse gases.

In 2006, California established a benchmark for greenhouse gas emission reductions with the passage of AB32, the California Global Warming Solutions Act. AB32 required the State Air Resources Board to develop a plan, including direct regulations, performance-based standards, and market-based mechanisms to achieve this level of greenhouse gas emission reductions. The State Air Resources Board has implemented a cap-and-trade program under AB32.

More about the new investment strategy is available here.