SUPPORTS Proposition 1C--Housing and Emergency Shelter Trust Fund Act of 2006 Legislative Bond Act BACKGROUND |PROPOSAL |FISCAL EFFECT | SUPPORTERS/OPPONENTS RESOURCES | SUMMARY POINTS | GET INVOLVED | PRINT FLYER --> READ NEXT (1D)

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While approximately 200,000 houses and apartments are built each year in California, that is not enough to meet critical housing needs. More than 360,000 Californians, including 85,000 homeless youth, are without homes every night, living on the streets, under bridges, in cars. In 2005, more than 5,000 women and children were turned away from domestic violence shelters that were already full. Only 14 percent of families are able to afford a median-priced home in California, and a worker must earn $23/hour to afford a typical 2-bedroom apartment rent. Government subsidies or financial assistance are usually required to build affordable housing. State voters approved general obligation bonds totaling $600 million to finance state housing programs in 1988 and 1990, and in November 2002 approved Proposition 46, the Housing and Emergency Shelter Trust Fund Act of 2002, authorizing $2.1 billion for affordable housing by a vote of 67 percent. Those funds have been largely disbursed and are expected to be depleted by 2007.

Prop 46 funds have produced 9,350 supportive homes and shelter beds, 11,080 apartments, and 16,100 first-time homes for low- and moderate-income families. Funds have been disbursed throughout the state through financing programs administered by the Department of Housing and Community Development and California Housing Finance Agency. A number of programs in Prop 46 are continued in Proposition 1C.

State funds have been critical for housing development, but approval of zoning and housing is a function of city and county governments. Local governments are also primarily responsible for providing infrastructure related to new housing, such as water, sewers, roads and parks.

The Housing & Emergency Shelter Trust Fund Act of 2006 was placed on the ballot by a two-thirds vote of each house of the Legislature and the Governor's signature.

This Act creates a trust fund in the State Treasury and authorizes $2.85 billion of general obligation bonds for the fund to provide:

• shelters for battered women and homeless families with children
• clean and safe homes for senior citizens
• homeownership assistance for the disabled, military veterans, and working families
• farmworker housing
• repairs and accessibility improvements to existing shelters and apartments for families and disabled citizens
• housing for homeless foster youth
• assistance to low and moderate income households who build their own homes
• greater choice in the housing market for California's low-to-moderate income families.

The Act also provides grants and loans to pilot programs demonstrating innovative, cost-saving programs to create or preserve affordable housing. It further provides funds for infill and transit-oriented infrastructure programs that will assist cities and counties with parks, water, sewer, or transportation improvements and brownfield clean-up to accommodate affordable housing. Both renters and future homeowners benefit from the housing bond.

Proposition 1C funds are allocated as follows:

$1.5 billion for housing production programs

• Rental Programs. A total of $590 million to be spent under the Multi-Family Housing Program, including $345 million for low-interest loans for development of affordable rental housing; $50 million for units for emancipated foster youth; and $195 million for supportive housing units for the disabled and persons moving from emergency shelters.
• Homeownership Programs. A total of $625 million, including $125 million for Building Equity and Growth in Neighborhoods (BEGIN)--grants for affordable housing downpayment assistance for low and moderate income homebuyers; $290 million for CalHOME--grants and loans to public agencies and nonprofits to fund local homeownership; $10 million for CalHOME--grants to organizations to assist low and moderate income households build their own homes; and $200 million for California Homebuyer's Downpayment Assistance Program--second loans for down payment and closing costs to first-time moderate income homebuyers.
• Farmworker Housing Programs. $135 million for Joe Serna Jr. Farmworker Housing Grant Program--grants and loans to develop rental and ownership housing for farm workers.
• Other Programs--$150 million. $50 million for Emergency Housing Assistance Program (EHAP)--grants to develop emergency shelters; $100 million for Affordable Housing Innovation Fund--grants and loans to pilot programs that demonstrate innovative, cost-saving approaches to create or preserve affordable housing.

$1.35 billion for infill and transit-oriented infrastructure programs

• Regional Planning, Housing and Infill Incentive Account. $850 million for incentive capital grants for infill housing and parks, water, sewer, and transportation improvements, traffic mitigation, and environmental cleanup of brownfields (contaminated properties) associated with infill development, of which no more than $200 million is allocated for parks.
• Transit-Oriented Development Implementation Program. $300 million for loans to cities, counties, transit agencies and developers for housing and other uses developed in close proximity to a transit station.
• Housing Urban-Suburban-and-Rural Parks Account. $200 million for grants for parks near residential developments in urban, suburban and rural areas.

Accountability and Financing

Funds for some programs not expended in a timely fashion may be reallocated to other programs in the Act. The Legislature may amend provisions in the Act to improve efficiency and effectiveness of the program or to further the goals of the program. The Act mandates periodic audits by the Bureau of State Audits, beginning one year after voter approval of Prop 1C, and annual reports by the Department of Housing and Community Development regarding use of funds.

Bond funds are estimated to be leveraged to provide assistance to more than 20,000 working families buying their first home, shelter to 2,000 homeless families and individuals, housing for 2,800 farmworkers, and rental assistance for 6,500 college grads, retired seniors, and essential public safety workers wishing to rent in their communities. It is predicted that the state economy will benefit through 87,000 new jobs and an overall increase in housing-industry economic activity.

Bonds would be issued over a period of time. Bonds totaling $2.85 billion would be paid from existing state funds at an average annual cost of $204 million per year over the 30-year life of the bonds. The Legislative Analyst (LAO) states:

"Interest Rate. Usually, the interest on bonds issued is exempt from both state and federal taxes because the bonds are for public purposes. This results in lower debt service payments for the state. Some programs proposed by this measure, however, would not be eligible for the federal tax exemption--resulting in a higher interest rate. This is because the housing programs provide funds for private purposes. (We estimate this would be the case for about 60 percent of the bonds.)

"If the federally taxable bonds were sold at an average rate of 6.5 percent and the remaining bonds at an average rate of 5 percent, the cost to the state would be about $6.1 billion to pay off both the principal ($2.85 billion) and the interest ($3.3 billion). The average payment would be about $204 million each year."

Between $100 million and $150 million of bond funds would be used over the years to pay the costs of state agencies (Department of Housing and Community Development and California Housing Finance Agency) administering the programs.

SUPPORTERS Signing ballot arguments for	OPPONENTS Signing ballot arguments against:
Cheryl Keenan, Executive Director San Diego Habitat for Humanity	Assemblyman Chuck DeVore, Member Assembly Budget Committee
Marivic Mabanag, Executive Director California Partnership to End Domestic Violence
Tom Porter, State Director AARP

The rebuttal to the opponents' argument was signed by Hank Lacayo, President, Congress of California Seniors; Peter Cameron, President, Vietnam Veterans of California; and Marivic Mabanag.

Other supporters mentioned in the ballot arguments include the California State Sheriffs Association, California Chamber of Commerce, Homes 4 California, Orange County Business Council, League of Women Voters, Foster Youth Alliance, and Habitat for Humanity--Greater Los Angeles, Sacramento, and Fresno.

Sally Probst, LWVC Housing Legislative Consultant

Julie Rajan, LWVC Social Policy Director, social_ policy@lwvc.org

Jack Sullivan, LWVC Legislation Director, legislation@lwvc.org

Trudy Schafer, LWVC Program Director/Advocate, 801 12th Street, Suite 220, Sacramento 95814, 916-442-9210, Fax 916-442-7362, advocacy@lwvc.org

YES on PROP 1C, 916-447-0503, www.homes4ca.org

YES on Proposition 1C
The Housing and Emergency Shelter Trust Fund Act of 2006

• Proposition 1C will fund programs to help the most vulnerable Californians: low income seniors, battered women, homeless families with children, and foster youth, as well as provide security improvements and repairs to existing shelters, accessibility improvements to apartments for disabled Californians, and housing with supportive services for the mentally ill.
• Proposition 1C will help 20,000 working families buy their first home and will help provide homes for veterans, teachers, nurses, security personnel, and farm workers.
• Proposition 1C will create 87,000 jobs and add $9 billion to local economies, thereby improving the state's economy.
• Proposition 1C is a responsible part of the Rebuild California Plan to build the roads, housing, schools, and flood-control systems we need for California's future.
• Programs in Proposition 1C will help cities and counties provide the infrastructure required to support housing in their localities, with incentive grants for water, sewer, roads, and brownfield cleanup associated with affordable infill developments.
• Proposition 1C will encourage transit-oriented development, benefitting both residents and transportation systems.
• Proposition 1C requires annual independent audits and limits administrative expenses to provide the accountability voters demand.
• Proposition 1C will be funded out of existing state resources without raising taxes.

Note: Please adapt this letter to your own community and check your local paper's word limit for published letters.

Editor:

We can take a positive step toward solving California's housing crisis by supporting Proposition 1C on the November 7 ballot.

Proposition 1C helps the most vulnerable among us--low-income seniors, foster youth, battered women, homeless families with children, and the disabled. It also helps first time homebuyers, in a state where only 14 percent of residents can afford a median-priced home.

A YES vote on Prop 1C authorizes bond funds that will increase the supply of safe, decent, affordable housing, help rebuild California's infrastructure and boost the state's economy. It requires annual audits and a limit on administrative expenses.

Vote YES on Proposition 1C.

Sincerely,

(your name)