Will CA’s Affordable Housing Bond Measures Make an Impact?

Ofer Elitzur

Propositions 1 and 2 both passed in the ballot box last week—and to no surprise. They were both polling ahead. Prop 1 provides $4 billion in funding for veteran income-restricted housing, while Prop 2 expands the so-called millionaire income tax for homeless mental health services to include supportive housing. The affordability crisis in California has translated into several housing-related measures. These in particular provide funding support for affordable housing to serve in-need communities through existing government agencies.

“Both of these propositions are going to drive affordable housing development. Both of these bonds make money available for affordable restrictive projects that would not be built but for this money,” Ofer Elitzur, a partner at Cox, Castle Nicholson, tells GlobeSt.com. “For an affordable developer who is going to build a Veteran’s supportive housing project that is going to be income restrictive, there is going to be a gap in the financing for that deal. So, you need to have these sources of subsidy to buy down the long-term cost of capital to make these project financially feasible. That is what these two bond measures do.”