Up to $6 billion for affordable housing is on the line in November as California voters prepare to weigh in on two statewide bonds that could fund tens of thousands of new homes in the Bay Area and beyond — potentially making a dent in the housing shortage.
City officials, nonprofits and developers say they’re counting on Proposition 1, which would provide $4 billion for affordable housing construction and home loans, and Proposition 2, which would authorize $2 billion to build housing for people with mental illness, to help them fill the dire need for cheaper alternatives to the Bay Area’s exorbitantly priced homes and apartments.
Together, the bonds represent a major effort to address a statewide housing crisis that has pushed the cost of buying or renting a home out of reach of all but the highest earners and forced many workers to live far from job hubs. If Prop. 1 succeeds, it would be the first statewide general housing bond passed since voters authorized a $2.9 billion bond in 2006. That money is all gone. And in 2012, the state dissolved its redevelopment agencies, eliminating another major source of affordable housing funding.
“We have to do something, or else there’s going to be some horrible consequences,” said state Sen. Jim Beall, D-San Jose, who wrote the legislation that placed Prop. 1 on the ballot.
If passed, the measures would fund a variety of state housing initiatives — money would go toward building and renovating multifamily rental units for families making 60 percent or less of the area median income, for example, and to help low and moderate-income home buyers make down payments on their first home.
But opponents worry about the cost of funding the measures. Prop. 1 would create debt that ultimately would be paid back by taxpayers — adding to the existing $83 billion in bonds the state already is paying off. Prop. 2 would divert funds previously earmarked for mental health services.
Many people with severe mental illness are not able to live safely on their own, said Gigi Crowder, executive director of NAMI Contra Costa. If they are placed in housing without receiving intensive treatment, they could hurt themselves or end up back on the streets.
“Over time, they lose the housing — and that’s sad, but it’s true,” she said.
San Jose officials say the bonds could help move the city closer to its ambitious goal of building 10,000 affordable homes by 2022. The city has the money to build about half of those units and would need another $600 million to fund the rest, said Rachel VanderVeen, deputy director of the San Jose Housing Department. Prop. 1 and 2 wouldn’t completely fill that gap — San Jose won just $127 million from the 2006 housing bond — but it would be a start, VanderVeen said. San Jose also has a local housing bond on the ballot, dubbed Measure V, which would raise $450 million for affordable housing.
In San Francisco, the city needs funding for about 900 affordable housing units that are set to be built through 2025. It would take an estimated $272 million to build them all, according to the San Francisco Mayor’s Office of Housing and Community Development.
If the state bonds pass, “you’re going to see a very definite increase in production, not only here, but across the whole state,” said Geoffrey Morgan, president and CEO of San Jose-based nonprofit affordable housing developer First Community Housing.
If approved by a majority of voters, Prop. 1 would authorize $3 billion in bonds to build affordable multifamily housing, housing in urban areas near public transit, and farm worker housing, and provide loans and grants for low and moderate-income home buyers. The measure also would provide an additional $1 billion to help veterans buy homes.
The bond would help fund up to 30,000 multifamily and 7,500 farm worker homes, according to the Secretary of State’s voter guide.
Money spent under Prop. 1 eventually would have to be repaid with interest. State officials estimate it would cost taxpayers $5.9 billion to pay off the $3 billion bond — or about one-tenth of 1 percent of the state’s general fund budget. The $1 billion in veteran assistance would be repaid by the veterans themselves.
Prop. 2 would allow the state to borrow up to $2 billion to build and rehabilitate housing for the mentally ill who are homeless or at risk of becoming homeless. The state would repay the money by diverting funds raised by the 2004 Mental Health Services Act, which increased the income tax for those earning more than $1 million to fund county mental health programs. More than 134,000 people are homeless in California, according to the Department of Housing and Urban Development’s 2017 point-in-time count. As many as a third are living with an untreated mental illness, according to a pro-Prop. 2 report by the presidents of Mental Health America of California and the California Police Chiefs Association, and a former member of the National Advisory Mental Health Council of the National Institute of Mental Health.
Some mental health workers oppose taking money from mental health services and putting it toward housing. While Prop. 2 promises to build “supportive housing,” which would provide residents with medical care, case managers, job training and other services, Crowder of NAMI Contra Costa argues it likely won’t be enough to help the severely mentally ill safely stay in their homes.
“We do not feel hopeful that once the housing is built, that those with severe mental illness will benefit greatly from the housing,” she said.
Prop. 1 and Prop. 2 have garnered a great deal of support so far. The only voice opposing Prop. 1 in the Secretary of State’s official voter guide is attorney Gary Wesley, who often argues against statewide ballot measures that have no other organized opposition.
“I think they’ll pass,” said David Garcia, policy director for the UC Berkeley Terner Center for Housing Innovation, “because they really have a broad group of supporters that really understand that need for more resources to address the housing and homelessness crisis.”
