GET READY TO VOTE

• What’s at stake?
• Why now?
• Here’s what supporters say
• Here’s what opponents say
• Potential financial impact
• Follow the money
• Go deeper

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.

What’s at stake?

According to recent U.S. Census Bureau statistics, about 54% of California renters officially qualify as “cost-burdened,” meaning they pay more than 30% of their income on rent. The only states with higher levels of rent burden are Florida and Nevada.

California needs to build about 1 million new homes 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’s general fund over the next 25 years.

Why now?

Affordable housing units generally set rents at no more than 30% of a tenant’s income. That means they often do not generate enough rental income to be profitable for developers. That’s where public subsidies come in.

In recent years, California has put more funding toward creating low-cost housing. According to a recent state legislative analysis, California has funded various affordable housing programs with $8 billion from the state’s general fund since 2019.

But some of those funding streams are now drying up.

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.

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.

Here’s what supporters say

• In 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.
  
• Notable endorsements: The coalition 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.

Here’s what opponents say

• There 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 “noble goal” but could end up “bankrupting our next generation.” He said, “We could definitely find $10 billion within the general fund spending, and within our normal budget, without doing bond indebtedness.”
  
• Notable opposition: The Howard Jarvis Taxpayers Association, a frequent critic of new California revenue proposals, opposes Proposition 1 in its election guide. 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’s a much greater burden on taxpayers than just paying for these programs from the budget," the Howard Jarvis guide says.

Potential financial impact

The California Legislative Analyst’s Office said repayment of the Proposition 1 bonds would cost the state between $500 million and $600 million each year for the next 25 years.

Because bonds would need to be repaid with interest, the legislative analysis said costs would likely end up about 15% higher than if the state paid for the programs with existing funding.

In total, the analysis said Proposition 1 would provide subsidies for an estimated 40,000 rental apartments, 2,500 farmworker units, 1,200 college student beds and would help up to 40,000 households achieve homeownership, including about 2,100 veterans.

Follow the money

LAist will bring you campaign financing information on this measure as we get closer to Election Day.

Go deeper

• Video: Proposition 1 explained to you in under 60 seconds
• CalMatters voting guide: Proposition 1
• California Budget & Policy Center’s guide to Proposition 1