Californians vote a resounding ‘yes’ on housing affordability propositions

Two propositions aimed at easing housing costs for renters and would-be homeowners in California easily passed Tuesday night, making clear that voters across the socioeconomic spectrum support any way to lower sky-high housing prices.

Propositions 1 and 37 each passed with roughly 60% of counted votes, as of Wednesday morning. The results are still preliminary.

In a sea of statewide propositions, and with much of the focus on a proposed billionaire tax, these housing propositions received less attention and little opposition. The propositions unlock billions in bond dollars to build housing and help residents buy homes in a state where the median price is nearly $900,000, according to recent data.

“Californians are saying, at least with these two measures, ‘Hey, we realize that there isn’t endless money but, in this case, we need to make sure that the government is dedicating resources to making housing more affordable and available,’” said Matthew Lewis, communications director of California YIMBY, an organization that supports making it cheaper to build housing.

With the passage of Proposition 1, the state has the go-ahead to issue $11.25 billion in bonds. Most of that money would be set aside for building and renovating low-income housing — likely doled out to local governments and private developers as low-cost loans.

Another chunk of the money will go toward helping first-time homebuyers and veterans buy homes, housing for farmworkers and infrastructure projects. The University of California and California State University will split $350 million to build student housing.

“As the University of California works with the state to enroll more California students, the demand for affordable student housing has risen,” UC President James B. Milliken said in a statement. “This historic investment will enable the construction of necessary and new housing on our campuses.”

The proposition comes at a cost to the state. The Legislative Analyst’s Office estimates that paying back bond investors will cost $500 million to $600 million a year, for an anticipated term of 25 years.

Proposition 37, on the other hand, was pitched as self-funded. The program, slated to be administrated by the California Housing Finance Agency, directs the state to create a down payment assistance fund for middle-income homebuyers, with up to $25 billion in bonds.

“[The passage of Proposition 37] makes a statement that the public understands that we have a middle [class] that can’t afford to get a house and that homeownership’s important,” said former state Senate Majority Leader Bob Hertzberg, the architect of the measure.

The down payment help will be in the form of loans, and coupon payments funded by the loan interest are expected to pay back bond investors.

There are several stipulations, including income requirements for buyers and that the money go toward only purchasing new homes, something Hertzberg said he hopes will spur construction.

Skeptics, including Lewis, say there is already enough demand for new housing and that additional changes, such as to building codes or zoning, are needed to make it easier and less expensive to build.

Those changes, if any, likely would be made at the local level. In Los Angeles, the two mayoral candidates differ on what to do to bring down housing costs, with incumbent Karen Bass more skeptical of a push to build denser housing than her opponent, Councilmember Nithya Raman.