Quick overview: Proposition 1<\/p>\n
LAist’s AirTalk host Larry Mantle’s ballot cram session gets you ready to vote with guests Michael Alvarez, of Caltech, Sara Sadhwani of Pomona College, and Lee E. Ohanian of UCLA and the Hoover Institution.<\/p>\n
This measure asks voters to approve $11.25 billion in state bonds for various affordable housing strategies. The revenue would go toward the construction of new income-restricted apartments, supportive housing for tenants overcoming homelessness, mortgage assistance for veterans and a number of other programs.<\/p>\n
What\u2019s at stake?<\/p>\n
According to recent U.S. Census Bureau statistics<\/a>, about 54% of California renters officially qualify as \u201ccost-burdened,\u201d meaning they pay more than 30% of their income on rent. The only states with higher levels of rent burden are Florida and Nevada.<\/p>\n California needs to build about 1 million new homes<\/a> specifically for low-income residents, based on current statewide planning goals. Proposition 1 aims to speed up that process by raising money from bonds that would be repaid from the state\u2019s general fund over the next 25 years.<\/p>\n Official title on the ballot: Prop. 1: Authorizes bonds for housing affordability programs <\/p>\n Language you will see<\/a> on the ballot: <\/p>\n Authorizes $11.25 billion in state general obligation bonds for housing affordability programs, including multifamily rental housing, mortgages for veterans, supportive housing, preservation of existing affordable housing, and downpayment assistance. Fiscal Impact: Increased state cost of $500 million to $600 million annually for about 25 years to repay the housing bond.<\/p>\n What your vote means<\/p>\n A “yes” vote means: The state could borrow $11.25 billion to support veterans and affordable housing. Understanding Prop. 1<\/p>\n Affordable housing units generally set rents at no more than 30% of a tenant\u2019s income. That means they often do not generate enough rental income to be profitable for developers. That\u2019s where public subsidies come in.<\/p>\n In recent years, California has put more funding toward creating low-cost housing. According to a recent state legislative analysis<\/a>, California has funded various affordable housing programs with $8 billion from the state\u2019s general fund since 2019.<\/p>\n But some of those funding streams are now drying up.<\/p>\n A previous measure also called Proposition 1, passed by voters in 2018, approved $4 billion in bonds for affordable housing and veteran mortgage programs. Proposition 2, also from 2018, put $2 billion toward the creation of 7,000 supportive units for formerly unhoused tenants. Both funds are now depleted.<\/p>\n Those state funds have run out at a time when state lawmakers say California can no longer rely on Washington, D.C., to expand or continue federal affordable housing efforts. They argue Prop. 1 could make an immediate difference for an estimated 45,000 units that are in the construction pipeline but have yet to break ground due to a lack of gap financing.<\/p>\n Here\u2019s what supporters sayIn addition to helping low-income renters, formerly unhoused tenants and veterans, Proposition 1 proponents say the bond would also fund programs specifically designed to help college students, youth exiting foster care, farmworkers, tribal communities and low-income first-time homebuyers. Here\u2019s what opponents sayThere is no organized campaign against Proposition 1, but a handful of Republican state lawmakers voted against putting it on the ballot. State Sen. Tony Strickland, who represents coastal Orange County and pockets of L.A. County, said Proposition 1 has a \u201cnoble goal\u201d but could end up \u201cbankrupting our next generation.\u201d He said, \u201cWe could definitely find $10 billion within the general fund spending, and within our normal budget, without doing bond indebtedness.\u201d Potential financial impact<\/p>\n
A “no” vote means: The state could not borrow $11.25 billion to support veterans and affordable housing.<\/p>\n
Notable endorsements: The coalition<\/a> of Proposition 1 supporters includes the Southern California Association of Nonprofit Housing, the California Association of Veterans Service Agencies and the California Federation of Labor Unions.<\/p>\n
Notable opposition: The Howard Jarvis Taxpayers Association, a frequent critic of new California revenue proposals, opposes Proposition 1 in its election guide<\/a>. The group writes that bonds rely on borrowed money, and debt service costs add up over time. “When used to pay for programs instead of capital projects, it\u2019s a much greater burden on taxpayers than just paying for these programs from the budget,” the Howard Jarvis guide says.<\/p>\n