In summary
A newly created regional housing finance authority for the entire San Francisco Bay Area will send a bond of up to $20 billion to the ballot. But the fate of its statewide counterpart looks bleak.
The largest affordable housing bond in California history is officially headed to the November ballot — just not for all Californians.
On Wednesday, commissioners of the Bay Area Housing Finance Authority — a first-of-its-kind regional agency with the ability to borrow and spend taxpayer dollars — agreed to ask voters across the nine counties of the Bay Area to approve an IOU of up to $20 billion dollars. The bulk of the funds would go toward the construction of new subsidized housing projects, with the rest to be spent buying up existing units (to make or keep them affordable) and on housing-related infrastructure.
The historically huge bond is being sent to the ballot at a time when the future of a long-sought statewide housing bond looks uncertain at best.
A lot will ride on the outcome of this bond vote — both economically and politically.
Affordable housing developers lined up in support at Wednesday’s hearing, noting that thousands of housing units reserved for working class Bay Areans are ready to break ground but lack the public funding to do so.
“We have entitled projects now that cannot get financed through the system,” said Nevada Merriman, vice president at MidPen Housing, a nonprofit developer. “There’s a pipeline here. It’s ready to go.”
The Bay Area authority says the funds could be used to build and acquire up to 72,000 units. That housing would range from the most deeply affordable — homes reserved for people on the brink of homelessness — to “moderate” income households. In San Francisco, San Mateo and Santa Clara counties, that includes those making more than $150,000.
California housing regulators have tasked local governments across the Bay Area to plan for roughly 250,000 affordable units by the end of the decade.
The bond is also a test case of a new approach to funding affordable housing in California. State lawmakers gave regional planners across the Bay Area the greenlight to set up the finance authority in 2019. If this first bond passes, most of the proceeds will go out in the form of low-cost loans.
“We’re very intent on setting up a successful public interest mortgage lending system so that we are self-sustaining,” said Kate Hartley, the authority’s director. “Our goal is to get good quality housing out as quickly as possible and to meet that need — and to the people who fear that we won’t do a good job, to really prove them wrong.”
But big borrowing comes with a big cost. The authority estimates that paying off principal and interest will add up to nearly $50 billion, to be paid via higher property taxes — a couple hundred dollars per year for the average Bay Area homeowner.
Even for one of California’s most reliably progressive regions, that’s no sure thing. Last March, a mental health housing and treatment bond was backed by Gov. Gavin Newsom and supporters spent nearly 15,000 times more than the opponents. Still, Prop. 1 passed by less than half of a percentage point.
Recent polling commissioned by the Bay Area Housing Finance Authority, the results of which were detailed at the hearing, found that 54% of likely voters support the bond. That may be more than a majority, but in California, where most local bonds require the backing of two-thirds of voters, that isn’t enough to pass.
That could change this November. Legislators are putting the finishing touches on a constitutional amendment to slash the threshold needed to approve local housing and infrastructure borrowing to 55%. That change is headed for the November ballot — and if it passes, it would apply to any bond concurrently on the ballot. That includes the Bay Area bond.
That means the fate of California’s largest-ever housing bond may hinge on the outcome of not one ballot measure, but two.
If they fail, affordable housers may not be able to turn to the state for backup.
Last year, Oakland Assemblymember Buffy Wicks introduced a $10 billion affordable housing bond, partly to replenish the coffers of the state’s premier affordable housing program, which was funded by a prior bond in 2018. As now, housing costs and homelessness were a top concern for voters. With state funding running low, the odds that legislators would sign off on Wicks’ proposal and send it to the voters later this year looked good.
But the political winds have shifted.
Affordable housers did relatively well in this austere budget cycle. That has given advocates less political juice as Legislative leaders consider competing priorities to fund with borrowed cash — namely, school buildings and climate programs.
Lawmakers have until July 3 to decide which bonds will make it onto the November ballot and which will be shelved.
Just say no
This is a complete waste of money.
More nickel and diming.
No on this!
The state is running a huge deficit. There is only so much tax money to be used and it should be used for the betterment of all of the tax payers.
The people who actually work and contribute to the state and pay taxes.
Priorities for tax dollars should be infrastructure – roads, water supply, electrical grids, schools. These should be improved and upgraded. We should educate our young citizens so they can find good jobs and not end up poor and homeless. We should protect the environment so we have clean air and water and a place to live for generations to come. We should figure out how to stop human overpopulation that is ruining the environment.
Last on the list of spending should be housing for people who have failed to do well and are not contributing to the community. It is not the responsibility of taxpayers to build million dollar homes so these people can live in the most expensive place in the nation. They should go to lower priced areas, live with relatives or live in shared shelters on cots and follow the rules of society.
Again, there is only so much money. Housing those who will never contribute to society should be near the bottom of the list of spending priorities.
Too much government (i.e. from CA taxpayers) spending.
NO
Funding subsidized housing is extremely difficult, and this will help a great deal. Obviously, it needs to be complemented by vigorous measures to make the production of housing legal at scale.
I want more affordable housing and would be willing to pay a bit more taxes, but this Bond is smoke and mirrors. Why?
Only $10.4 billlion of the total Bond would go toward financing new affordable housing. Each affordable unit now costs about $900,000 to build (and will keep rising). RHNA requires nearly 3,000 affordable units to be built in Palo Alto.
The Bay Area Housing Finance Authority voted to put this measure on the ballot and has said that Santa Clara Co. would get $2.4 billion excluding San Jose, which would get $2.1 billion. So 14 cities in the County, excluding San Jose, would divide-up the $2.4 billion.
So do the math. Each affordable unit costs about $900,000 x 3,000 units required. That equals well over $2 billion needed just for Palo Alto that would use up the total amount available for all the cities in the County.
Our taxes will go up hundreds of dollars a year for next to nothing. Vote no.
Anoni, these units are being rented not given away. Your math is seriously flawed. You could talk with Alta Housing to find out how this really works or ask CalMatters for a tutorial,
Nope – my figures are right.
Yes – most housing built here will be multi family housing at about $900K per unit.
I’ll be voting for this bond. Our region has a housing crisis, and an important part of the solution is government subsidies to support affordable homes. This bond will raise my property taxes by a couple hundred dollars, but that’s far far less than the unfair tax benefit that Prop 13 provides me.