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

Publication date: 
Friday, October 5, 2018

On November 6, 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 Mental Health Services Act (2004) can 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 funds the construction of affordable housing for individuals with mental health needs and who are at risk of or experiencing homelessness.

 

If approved, SCG staff would convey the support in the Public Policy Roundup, provide additional analysis, and coordinate with advocates and SCG members working on their passage.

 

WHY THESE BALLOT MEAUSURES?

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

  • Affordable Housing: The Committee added affordable housing as a key part of the public policy discussions related to homelessness. Both housing measures advance the goals of affordable housing 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 for the construction of 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, a key cornerstone of economic inclusion public policy. Most recently, SCG’s Annual Conference held a focused breakout session related to homeownership (and entrepreneurship).

 

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

Description

Amount

Multifamily Housing Program

$1.5 billion

CalVet Home Loan Program

$1 billion

Farmworker Housing Grant Fund

$300 million

Local Housing Trust Matching Grant Program

$300 million

Regional Planning, Housing and Infill Incentive

$300 million

Self-Help Housing Fund

$300 million

Home Purchase Assistance Program

$150 million

Transit-Oriented Development Implementation Fund

$150 million

Total

$4 billion

 

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 the passage of this measure.  The Silicon Valley Community Foundation and Chan Zuckerberg Initiative have also expressed support of this measure.

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

Other organizations that have expressed support for this ballot measure including 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 forth.

Opponents also argue that passage of the measure would fiscal pressure by increasing the debt. The Legislative Analyst’s Office estimates that the cost to taxpayers 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 funds 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 the use of Proposition 63 dollars. Currently, the courts are evaluating Proposition 63 and AB 1618 to see if this is a valid use of the funds.

If adopted by voters, NPLH can deploy at most $140 million of 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 is in its own category and will not have to compete with other counties. 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 the passage of this measure.

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 argue 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 services for mental health services and argue that this ballot measure would divert funds into housing.

 

REQUEST FOR ACTION

SCG staff requests that the Public Policy Committee take action for the aforementioned reasons. If you have questions or comments, please contact me at [email protected] or (213) 680-8866 ext. 221.