UC Berkeley | Institute of Governmental Studies Library
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Hot Topics 2006 | Proposition 1C | Housing and Emergency Shelter Trust Fund Act of 2006 UC Berkeley | Institute of Governmental Studies Library |
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Election Results Update [8 November 2006] For updated results on all propositions, see the Secretary of State website.
Background As of the third quarter of 2005, according to data from the California Association of Realtors, California median-income households (those with a median household income of $54,140) were $73,810 short of the $127,950 qualifying income needed to purchase a median-priced home at $545,910. Housing units in California are built from a variety of financial sources. Most units are built by private industry. Some units however, are built with federal, state and local government assistance through state programs. These programs provide private developers, non profit and government agencies with low-interest loans to subsidize housing construction costs provided the housing is rented or sold to low income residents. City and county governments traditionally pay any infrastructure costs that might incur from new housing including water, sewers, and roads. The state government also supplies eligible first-time home buyers with assistance with their down payment on a new home. The most recent funding increase for housing for low income residents came with the passage of Proposition 46 in 2002. The proposition provided $2.1 billion for a housing trust fund which has been the source for creation of new shelter beds, apartments for homeless and funds for low-income home buyers in the last 4 years. Low income housing supporters claim that Prop. 46 funds may be exhausted by the end of 2006. Proposition 1C originated as SB 1689 which was introduced by Senate President Pro Tem Don Perata (D-Oakland). The legislature passed the bill on 4 May 2006. The proposition was part of a larger infrastructure development bond targeting education, flood protection and housing. Negotiations in the legislature led to cutting the bond into separate bills, each aimed at different parts of infrastructure development. 
Proposition 1C would provide $2.85 billion in funds for 13 new and existing housing and development programs which would fund new battered women shelters, low-income senior housing, veterans housing and shelter for homeless families. The programs are divided into four categories, each targeting a separate area of housing development.
The state would make payments on the bond debt from the general fund over a period of 30 years. Unlike most bonds, some of the programs introduced by Prop. 1C are not eligible for federal tax exemption as they provide funds for private use. This would cause the interest rate to be higher. These bonds would generate approximately $3.3 billion along with the $2.85 billion cost of the principal. The total annual cost to the state would be around $204 million. In addition, the programs provided by Prop. 1C would cost the Department of Housing and Community Development and the California Housing Finance Agency some administrative costs. A portion of these costs would be paid by the programs' funds over time. Campaign Finance Browse our updated webpage listing major contributors to all of the campaigns supporting and opposing the ballot measures here.
Proponents of Proposition 1C say that it will provide much needed shelter for thousands of citizens who cannot afford housing. They cite statistics that find that there are hundreds of thousands of homeless people in the state that cannot access shelter each night. They also point to thousands of battered women and their children who were turned away from shelters last year. Proposition 1C, proponents argue, would provide new jobs to administer the programs and new housing for target risk groups. They claim that the costs would be paid from the general fund, money supplied from tax dollars already spent by California residents. Supporters of Proposition 1C come from members of the business community, homeless and battered women advocacy groups, and senior citizens and youth organizations. Opponents of Proposition 1C claim that it will add debt and bureaucracy to California's already stumbling economy. They say that the Proposition will barely touch the housing crisis and will instead enable the state to help only a small minority. Critics claim that Californians will actually have to pay an additional $600 in taxes over the life of the bond. Furthermore, they contend that future generations will be saddled with years of debt. Opponents blame the housing affordability issue on government interference in the form of over regulation of the housing industry, environmental lawsuits and high fees on private industry. Opponents largely come from anti-tax groups and members of the business community.
Official Voter Guide Housing and Emergency Shelter Bond Individual Campaign Committees League of Women Voters of Education Fund non-partisan analysis
Homes for California Rebuilding California
Analyzing the Vote for Selected Propositions, Los Angeles Times Exit Poll, Nov. 9, 2006. Exit poll: Complete poll data, Los Angeles Times Exit Poll, Nov. 9, 2006. Majorities of voters appear ready to approve the state's infrastructure bonds (Props. 1B, 1C, 1D and 1E). Field Poll, Release 2219, Nov. 4, 2006. Baldassare, Mark. Feinstein, Brown and Lockyer ahead, other statewide races close or tied; Support for infrastructure bonds and propositions 86 and 87 lukewarm. Voters are supporting four of the five bond proposals on the November ballot, although not by overwhelming margins. Field Poll, Release 2206, July 28, 2006. Continuing negative job appraisals of the Governor and the legislature, despite initial support for infrastructure bonds. Field Poll, Release 2201, June 5, 2006.
Propositions 1B, 1C, 1D, and 1E: The Public Works Bond Package. Oct. 2006, California Budget Project
The following citations include links to full-text articles online, when they are available. Some restrictions on use apply, due to licensing requirements. For more information, see Tips for Finding Full-Text Articles. Abate, Tom. Cabanatuan, Michael. Richman, Josh. Radovich, Emma. Marinucci, Carla. Mendel, Ed. Schultz, E.J. Leonard, Bill [Opinion]. De Sa, Karen. Furillo, Andy "Yes on propositions 1B, 1E; No on propositions 1C, 1D," Alameda Times-Star, Oct. 1, 2006. Access World News (UCB) Furillo, Andy. "Housing bond, put in new light, surges," Sacramento Bee, Sep. 29, 2006. Access World News (UCB) [Opinion.] "Bonds, pro and con: 1A, 1B and 1E deliver, but others disappoint," San Diego Union-Tribune, Sep. 29, 2006. Access World News (UCB) Lucas, Greg. "Bond measures have tenuous voter support," San Francisco Chronicle, Sep. 29, 2006. San Francisco Chronicle Sheppard, Harrison. "State infrastructure gets C-minus as engineers issue report card," Daily News of Los Angeles, Sep. 27, 2006. Access World News (UCB) Lucas, Greg. "Housing bond would boost programs for the poor/Prop. 1C would also fund anti-sprawl projects in cities," San Francisco Chronicle, Sep. 20, 2006. San Francisco Chronicle Mecoy, Laura; Yamamura, Kevin. [Opinion]. Yi, Matthew. Wisckil, Martin. Nelson, Soraya Sarhaddi; Joseph, Brian. |
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| ©2006 | Regents of the University of California | This page by Institute of Governmental Studies Library staff | Last updated 28 November 2006 |