Support for Proposition 1 (Veterans and Affordable Housing Bond) and Proposition Two (No Place Like Home)

On November 6, 2018, voters in California will make public policy decisions on eleven ballot measures. Two measures directly relate to the work of SCG members in the area of housing. Proposition 1, Veterans and Affordable Housing Bond Act of 2018, would generate $4 billion in bonds for housing and homeownership programs. Proposition 2, No Place Like Home, would clarify that a limited amount of revenue generated from the Mental Health Services Act (2004) could be used for housing individuals with mental health needs.

RECOMMENDED ACTION

Staff requests that the Public Policy Committee: Adopt a policy position that supports the passage of Proposition 1 and Proposition 2, which appear on the November 6, 2018, ballot. Specifically:

• Proposition 1 - Veterans and Affordable Housing Bond Act of 2018:  If enacted, this proposition would authorize $4 billion in bonds for emergency housing, low-income rental housing, homeownership, veteran housing, infill housing development, and farmworker housing.
• Proposition 2 - No Place Like Home: If enacted, the state could use Proposition 63 (2004) revenue to fund the No Place Like Home (NPLH) program. The NPLH program supports the construction of affordable housing for individuals with mental health needs and who are at risk of or experiencing homelessness.

WHY DOES SCG SUPPORT THESE BALLOT MEASURES?

Support for Proposition 1 and 2 would be consistent with the Public Policy Agenda adopted by this Committee on March 1, 2018, and SCG members’ position. Specifically, the Committee added:

• Affordable Housing: The Committee added affordable housing as a critical part of the public policy discussions related to homelessness. Both housing measures advance affordable housing goals, with Proposition 1 providing $4 billion in bond money for a range of housing construction and purchasing programs. Proposition 2 would clarify that the state could use additional mental health dollars to construct permanent supportive housing, consistent with the “Housing First” model advanced by direct service providers, advocates, and funders.                                                                                                                 
• Economic Inclusion: Proposition 1, if approved, would provide $150 million in home purchase assistance, an essential cornerstone of financial inclusion public policy. 

PROPOSITION 1: VETERANS AND AFFORDABLE HOUSING BOND ACT

If enacted, this proposition would authorize $4 billion in bonds for emergency housing, low-income rental housing, homeownership, veteran housing, infill housing development, and farmworker housing. Of the $4 billion, $1 billion would directly benefit veterans purchasing homes, farms, and mobile homes. The remaining $3 billion would fund various state homeownership and affordable rental housing programs. Figure 1 enumerates the bond expenditures.

Figure 1. Distribution of Bond Revenue

SUPPORT

SCG members United Ways of California, United Way of Greater Los Angeles, County of Los Angeles, and the Los Angeles Area Chamber of Commerce have expressed support for this measure’s passage.  The Silicon Valley Community Foundation and Chan Zuckerberg Initiative have also voiced support for this measure.

Supporters note that this ballot measure would bring additional public resources to address the housing crisis. Veterans’ organizations report that this would bring in $1 billion for stable, affordable homes.

Other organizations that have expressed support for this ballot measure include PolicyLink, Koreatown Immigrant Workers Alliance, PICO-California, League of Women Voters, Veterans of Foreign Wars, California Partnership to End Domestic Violence, the Social Justice Fund for Ventura County, and Valley Industry and Commerce Association (VICA).

OPPOSE

The Press-Enterprise wrote an editorial in opposition to the ballot measure. The editorial staff argued that California should focus on reforming land-use policies. One individual wrote the official ballot statement in opposition. The Los Angeles Times reports that this individual feels it is an obligation to file a counterargument when no organization steps forward.

Opponents also argue that passage of the measure would create fiscal pressure by increasing the debt. The Legislative Analyst’s Office estimates that taxpayers’ cost to repay the bonds would average about $170 million annually for 35 years—totaling $5.9 billion to pay off both the principal ($3 billion) and interest ($2.9 billion). This amount is about one-tenth of 1 percent of the state’s current General Fund budget.

PROPOSITION 2: NO PLACE LIKE HOME ACT OF 2019

If enacted, the state could use Proposition 63 (2004) revenue to fund the No Place Like Home (NPLH) program.  The NPLH program supports the construction of affordable housing for individuals with mental health needs and who are experiencing or at risk of homelessness. NPLH funds would be competitively allocated to eligible counties.

In 2016, the Legislature enacted Assembly Bill (AB) 1618.  AB 1618 directed the state to spend Proposition 63 revenue on housing individuals with mental health challenges. However, this diversion of Proposition 63 funds triggered a lawsuit on the validity of using Proposition 63 dollars. Currently, the courts are evaluating Proposition 63 and AB 1618 to see if this is a proper use of the funds.

If adopted by voters, NPLH can deploy at most $140 million of the Mental Health Services Act funds annually (approximately 10 percent of total MHSA dollars). The measure allows the state to sell up to $2 billion in bonds to pay for NPLH. Mental Health Services Act funds would back repayment of the bonds.

LOCAL IMPACT

If approved by voters, this measure would provide additional public resources to regional efforts to address homelessness. Specifically, these dollars would supplement existing approved funds from Measure HHH (City of Los Angeles), Measure H (County of Los Angeles), and efforts to streamline the approval of permanent supportive housing.

The County of Los Angeles will not have to compete with other counties. The remaining categories are organized by population such that a mid-sized county such as Santa Barbara would not have to compete with larger-sized Orange County.

SUPPORT

SCG members Corporation for Supportive Housing, United Way of Greater Los Angeles, County of Los Angeles, City of Los Angeles, City of Santa Monica, and the Los Angeles Area Chamber of Commerce support this measure’s passage.

Supporters note that this measure furthers the Housing First model by using NPLH funds to construct housing for persons with mental health needs. Additionally, local jurisdictions could leverage local funding to compete successfully for state dollars.

Non-funder supporters include Downtown Women’s Center, Hollywood Community Housing Corporation, Inner City Law Center, Little Tokyo Service Center, MALDEF (Mexican American Legal Defense and Educational Fund), Skid Row Housing Trust, and Ventura County Housing Trust Fund.

OPPOSE

The National Alliance on Mental Illness (NAMI) Contra Costa argues that this measure would “cause more homelessness by forcing more mentally ill people into severe symptoms that could increase the numbers living on streets.”

Additionally, some opponents noted that every dollar from Proposition 63 should go to mental health services and argue that this ballot measure would divert funds into housing.

STATUS

Both propositions have passed.