PROP 1
PROPOSITION 1: HOUSING ASSISTANCE BOND
Bear with me—this is not a proposition likely to cause a gigantic kerfuffle, like dividing the state into three pieces. But it addresses arguably one of California’s biggest crises: low-income housing. (The other, IMHO, is climate change.)
Propositions 1, 2, 5, and 10 attempt to deal with California’s housing crisis.
This proposition was placed on the ballot by the legislature.
First, let’s answer a burning question.
Why did they re-start the numbering of the ballot propositions?
Starting with November 1998, the numbering re-sets every ten years. This is the second re-set (1998, 2008).
And now, on to Prop 1.
What is this?
A bond for housing assistance that benefits veterans, farmworkers, low income, and high density residents.
A bond is a loan from investors to the State of California that the taxpayers pay back with interest. A bond such as this is a good way for investors to park some cash with little to no risk. Since 1993 bonds exceeding $300M must be approved by the voters. Since 1993, 31/39 have been approved.
If this proposition passes, California is borrowing $4B and will end up paying back, over 35 years, a total of $XB (around $170M per year).
The money will be used to do all of the following:
(25%) $1B in loans for homes and farm purchases (CalVet Home Loan Program).
(37.5%) $1.5B in loans for the construction, rehabilitation, and preservation of multi-family units serving those earning 60% or less of the area income
(3.8%) $150M in loans for the construction of housing near rapid-transit stations
(7.5%) $300M for infrastructure supporting high-density affordable and mixed income housing
$150M in grants and loans for middle- and low-income home buyers
$300M in grants and loans for farmworker housing
$300M in matching funds for pilot programs for developing low-income housing
$300M in forgivable loans for manufactured homes and mortgage assistance
In case you’ve been living under a rock, California is suffering a housing shortage crisis that is at least in part responsible for the spike in homelessness. On the surface this seems like a slam-dunk no-brainer, just the beginning of all that needs to be done by state and local officials to ameliorate the worsening horror show.
But, let’s make sure this is going to do what it’s supposed to do, and that it’s worth the money.
YES supporters care about the altruistic aim of helping the less fortunate, but they also support the idea that the government has a responsibility to strengthen the economy of the state. If we make it easier for those who make less money to own homes and rent apartments around the state, will others in the economy benefit? Will state coffers see a return on investment. Yes, and yes. The question is: how much benefit? How much of a return? That’s hard to say.
YES has raised over $2M as of the end of July. Two committees, one of which is closely tied to the Zuckerbergs (Facebook), are running the YES campaign.
It stands to reason that many state Democrats, and many tied to housing development (such as private developers who will win contracts funded by this money), support this measure.
Sidebar: I won’t pretend the editorial boards of the San Francisco Chronicle and the Sacramento Bee have thrown their support behind Prop 1.
NO supporters, predictably, wonder how much money the state has borrowed since 1993 on the 31 bonds already passed, and what percentage of our state’s annual budget is currently being used to pay those loans off? That’s a fair question. In the voter’s guide the NO side will falsely suggest that higher taxes will directly result from any bond.
NO has raised $0 as of the end of July. The usual anti-tax crowd will oppose this bond reflexively. But they may not be the only ones. More about that in a minute.
No major editorial boards have opposed Prop 1 (last update 9/20).
My take, if you care:
First, let’s answer the NO side’s legitimate questions.
The 31 voter-approved bonds have raised, since 1993, over $143B. (Half were about water or education. Only two were about housing.) The state’s current bond debt is over $73B.
For some perspective, the state budget passed this past June totaled over $183B. Less than 2% came from bonds. Governor Brown’s proposed budget for next year is around $190B, with even less coming from bonds.
I don’t think that particular debt level is too high for this state. In fact I was surprised at how low it is.
Stay calm. I’m not in favor of unlimited or unwise state spending. It is important to minimize the debt, of course! The fallacy is in thinking that debt is always bad. It’s not. The state must invest in the economy in order to strengthen it. Allowing homelessness and home prices to spiral out of control is not good for employers, it’s not good for traffic, it’s not good for air quality, and it’s not good for children (think: parents commuting long hours, unable to afford child care).
“ The fallacy is in thinking that debt is always bad. It’s not. ”
The problem is complex, long-term, and will require MANY measures, both public and private.
Sadly, the NO side is not limited to conservative anti-tax Chicken Littles. It may also includes liberal NIMBYs (Not In My Back Yard). For NIMBYs it’s all about Me and My Neighborhood and too bad about homelessness—that’s someone else’s problem. They think, I pay Lots of Taxes and I am happy to do that, but I am not happy to risk my view of the mountains or my view of the Pacific or the amount of noise I have to listen to in my back yard whilst I sip Taittinger. Some of them are even worse than that in their thinking: I am for racial equality, as long as I don’t have to live next to one. I have many [ insert minority ] friends, but I don’t want to live next to one.
Think I’m being ridiculous? You should hear Palm Springs liberals talk about neighboring Desert Hot Springs—even though most of them have never been there.
Look, it isn’t necessary to shame people about their fear of brown neighbors.
I say, “What about the people who pour your drinking water at every single one of your swanky restaurants? Where are they supposed to live? It isn’t enough to simply pay them more. Many employers already oppose efforts to raise the minimum wage, and I’m not saying they shouldn’t, but it’s not the answer—these days minimum wage isn’t enough to rent a box in someone’s living room, let alone your own flat, in every urban California zip code, and in most of the suburban ones as well.
“Where are these people supposed to live? Please don’t tell me the Free Market is supposed to sort this out. If low income housing was profitable, someone would be trying to profit from it.
If I gave you two figures: 18% and 11%, and I asked you to tell me which was the U.S. poverty rate, and which was the California poverty rate, could you accurately assign those two numbers?
Because the bigger one is California’s.”
#YesOnProp1 #Prop1
