California’s $11.25 billion housing bond was leading Tuesday night, while a separate proposal to finance up to $25 billion in down-payment loans for buyers of qualifying new homes was also leading, according to preliminary statewide returns.
Propositions 1 and 37 offered different approaches to housing costs: public funding for affordable rentals and other housing programs, and loans to help eligible buyers get into newly built homes. The measures would also be repaid differently, with most of Proposition 1’s debt coming out of the state budget and Proposition 37’s bonds financed by borrowers’ payments.
Proposition 1: Affordable housing and veterans’ loans
Proposition 1 had 2,967,315 votes in favor, or 58.4%, and 2,113,289 against, or 41.6%, in returns released by the California Secretary of State at 8:50 p.m. It requires a simple majority to pass.
The measure would authorize $11.25 billion in general obligation bonds. Of that, $10 billion would support state housing programs and be repaid from the General Fund, the account that also supports education, health care and other state services. The remaining $1.25 billion would finance home loans for veterans, with borrowers’ payments covering that portion of the debt.
The largest allocation, $7.2 billion, would help acquire, build or renovate affordable rental housing. Projects receiving that assistance generally would have to reserve homes for low-income households for 55 years. Some money would support housing with on-site services for residents who need help such as mental health or substance use counseling.
Another $1.1 billion would support homeownership programs for low- and moderate-income households, including assistance for first-time buyers. Other allocations include $500 million for infrastructure supporting affordable housing, $450 million for farmworker housing, $350 million for University of California and California State University student housing, $200 million for tribal housing and $200 million for local pilot programs to reduce development costs.
The money would be distributed over several years. The Legislative Analyst’s Office estimates that repaying the $10 billion housing-program portion would cost the General Fund $500 million to $600 million a year for about 25 years. Participating veterans’ loan payments would repay the separate $1.25 billion portion.
Supporters argued in the official voter guide that the bond would help move affordable housing projects into construction and expand access to housing for veterans and working families. No opposition argument was submitted for the guide.
Proposition 37: Down-payment loans for new homes
Proposition 37 had 3,053,260 votes in favor, or 60.4%, and 2,005,341 against, or 39.6%, in Secretary of State returns released at 8:50 p.m. It also needs a simple majority to pass.
The measure would authorize the California Housing Finance Agency to issue up to $25 billion in revenue bonds for a new down-payment assistance program. Eligible buyers could borrow up to 17% of a qualifying home’s price and would have to contribute at least 3% themselves.
The assistance would be a loan, adding a repayment obligation for the buyer. Borrowers’ monthly payments would be designed to repay bond investors and cover administrative expenses. The legislative analyst estimates no direct state or local government costs.
Buyers would have to have lived in California for at least a year, occupy the home and earn less than twice their area’s median household income. Eligible properties would be newly constructed homes or the first sale of converted nonresidential property, with price limits of roughly $1 million to $1.5 million depending on the county, adjusted annually.
The buyer would have to be the first purchaser of that home. That is different from requiring someone to be a first-time homeowner.
The measure also includes an optional arrangement for builders. Developers choosing that option would meet higher labor standards in exchange for different construction-defect rules intended to give them more flexibility. Developers would not have to participate in that option for their homes to qualify for the loan program.
The bond authorization would be a ceiling. CalHFA would decide how much to issue and when. The legislative analyst says the program’s reach would depend on investor demand, the cost of the loans compared with other assistance, and whether the program increases construction and homebuying.
Supporters argued in the official voter guide that the program would help buyers who can manage monthly mortgage payments but struggle to save a down payment, while encouraging construction. No opposition argument was submitted for Proposition 37 either. The absence of arguments in the guide does not mean that either housing measure had no opponents.