California Governor Gavin Newsom has announced more than $865 million in new climate and community investments, funded entirely through payments made by major polluters under the state’s cap-and-invest scheme. The latest awards will support 39 affordable housing projects across 21 communities, expand sustainable transport infrastructure, and boost climate resilience efforts — including $185.6 million earmarked for Los Angeles County as it rebuilds after this year’s severe wildfires.
Governor Newsom said California’s cap-and-invest programme was delivering exactly as intended. “Thousands of families are gaining access to new homes and healthier neighbourhoods because polluters are paying their fair share,” he said. “Real climate leadership means pairing ambition with equity and urgency to help those who need it the most.”
Cap-and-invest driving community benefit
The California Climate Investments initiative, funded through the state’s emissions allowance system, channels billions into reducing greenhouse gas emissions, strengthening the economy and improving public health — particularly in disadvantaged communities. The Governor emphasised that these investments directly support his agenda to build a “California for All,” addressing statewide housing needs while safeguarding the state’s climate.
Funding is targeted at communities most affected by climate impacts, ranging from wildfire recovery efforts in Southern California to agricultural preservation in the Central Valley.
Strategic Growth Council surpasses $5 billion milestone
The California Strategic Growth Council (SGC) marked a major milestone, surpassing $5 billion in cumulative investments after awarding nearly $1 billion in its largest-ever funding round. The latest grants will support affordable housing, climate resilience and agricultural conservation projects aimed at delivering environmental, health and economic benefits.
“These investments will help families breathe cleaner air, stay safe in extreme heat, find stable homes, and preserve the lands that feed us,” said SGC Executive Director Erin Curtis. “Crossing the $5 billion mark reflects people-centred resilience and real partnership with communities hit first and worst by climate impacts.”
Breakdown of new funding
The SGC approved more than $866 million across three key programmes:
- Affordable Housing and Sustainable Communities Programme (AHSC):
$835.3 million for 21 affordable housing and green transport projects across 17 jurisdictions. - Transformative Climate Communities Programme (TCC):
$29.5 million from anticipated 2026–27 Climate Bond funds to fully support four new community-driven projects. - Sustainable Agricultural Lands Conservation Programme (SALC):
$2.05 million for 14 capacity-building projects in 25 counties to protect farmland and curb urban sprawl.
California Secretary for Environmental Protection Yana Garcia said the investments show “California leads on climate and leaves no one behind,” delivering cleaner air, healthier communities and good jobs.
Thousands of new homes and major transport upgrades
This round of AHSC funding will create 2,393 new rent-restricted homes, nearly two-thirds reserved for extremely low- or very low-income households. Projects include significant sustainable mobility upgrades:
- Over 30 new zero-emission public transport vehicles
- Around 150 new bus shelters
- 45 miles of new bikeways
- 20 miles of safe, accessible walkways
These improvements are expected to remove the equivalent of 209,410 petrol-powered car trips from California’s roads each year. Projects will be deployed across the Central Coast, San Francisco Bay Area, Inland and Coastal Southern California, the Sacramento region, San Diego, the North State and the San Joaquin Valley.
Protecting working agricultural lands
The SALC programme supports early-stage planning, partnerships and technical work to protect farmland from development. To date, SALC has helped safeguard 41,837 acres and funded 613 million dollars’ worth of conservation efforts, including easements, planning projects and land acquisitions.
California Natural Resources Secretary Wade Crowfoot said these investments protect rural livelihoods and food production while steering new development into existing communities where infrastructure already exists.
Scaling community-led climate solutions
The latest awards bring the total TCC Implementation Grants to $453.5 million, empowering communities most harmed by historic pollution to design and implement local climate solutions, including clean transport, affordable housing, renewable energy, energy efficiency and urban greening.
The three programmes collectively advance Governor Newsom’s commitment to community-centred climate action, expanding access to affordable housing, protecting working lands and delivering emissions reductions through locally driven solutions.
