Amendment to state constitution could unlock billions of dollars for California housing
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Last November, 59% of voters in Berkeley wanted to give the city permission to borrow $650 million to fund affordable housing.
Two years earlier, 58% of San Diego voters supported a $900 million housing bond.
Two years before that, in 2018, commanding majorities in San Jose (64%), Santa Rosa (62%) and Santa Cruz County (just over 55%) turned out to back housing bonds worth hundreds of millions of dollars.
All five measures failed.
The California constitution doesn’t make it easy for local governments to issue IOUs. Not only are most types of municipal and county borrowing plans required to go before the electorate, once on the ballot they also have to win support from at least two-thirds of the voters to pass.
Now, as state lawmakers scramble to put a lid on ever-increasing housing costs, a persistent homelessness crisis and growing public ire over both, a coalition of housing developers, unions, local governments and pro-housing groups want to lower that electoral bar for bonds and taxes that fund affordable housing and a wide array of public infrastructure projects.
The new proposed threshold: 55%. Had that standard been in place in 2018, Berkeley, San Diego, San Jose, Santa Rosa and Santa Cruz County would have been granted the power to borrow a total of $2.26 billion.
Spearheading the effort to amend the state constitution is Assemblymember Cecilia Aguiar-Curry — and not for the first time. The Davis Democrat has introduced a version of the bill every session since joining the Legislature in 2017. It’s never made it out of the Assembly.
But proponents think this year could be different. The Assembly’s new speaker, Robert Rivas, has named housing a top priority and has shown an early willingness to push his preferred housing bills, even over the objections of powerful committee chairpersons. Rivas is a co-author of Aguiar-Curry’s bill, along with roughly half the Assembly.
Aguiar-Curry may also have a bit more negotiating weight to throw around this time, too. Rivas named her speaker pro tem, his second in command, upon assuming the leadership role this summer.
Meanwhile, public concern about housing has not gone away.
If the proposed constitutional amendment makes it through the Legislature, where it would require (what else?) two-thirds of the vote to pass, it would then go before voters statewide on the November 2024 ballot.
It would be in good company. Alongside initiatives and referenda proposed by private citizens and interest groups, the Legislature is considering a handful of other proposed constitutional changes and as many as 10 statewide bonds, including a $10 billion affordable housing measure.
Aguiar-Curry, who used to be the mayor of semi-rural town of Winters, said her measure may help cure some of the defects she sees with those colossal statewide bonds that often most benefit bigger cities.
“When you pass some of these big time bonds, we don’t see the money,” she said in an interview. “Every community has different needs, but for a lot of us in rural communities, it’s hard to get bonds passed.”
Making it easier for local governments to raise funds for affordable housing will also make it easier for those governments to compete for matching state and federal cash, said Abram Diaz, policy director for the Non-Profit Housing Association of Northern California, which supports the amendment.
“If we’re gonna do these big statewide efforts, ensuring the locals also do their piece and have the tools they need to meet us halfway is really important,” he said.
Many of the state’s business groups and the California Association of Realtors oppose the measure, reluctant to take any steps that would make it easier for local governments to hike taxes or run up their debts. Most bonds issued by local governments are paid out of increased property taxes.
For many defenders of California’s long-time restrictions on local taxation — namely, Proposition 13 from 1978 — Aguiar-Curry’s measure represents a fiscal Pandora’s box.
“It’s a slippery slope,” said Newport Beach Assemblymember Diane Dixon, a Republican, at a recent Assembly hearing. “There are always attempts to undo Prop. 13 and the two-thirds vote, and it’s just a pincer attack.”
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