By Ernest L. Aglipay
Copyright © 2002 by University of the McGeorge School of Law
JD, McGeorge School of Law, University of the Pacific
to be conferred May 2003
B.S., Public Policy and Management, University of Southern California 1997
Currently in California, there is a need to provide affordable housing to meet the increasing unfulfilled housing needs of the people of the state. There is a need to reaffirm the commitment to the official housing policy of the state and provide sufficient financial resources to meet this commitment over a reasonable period of time. Housing costs have increased at an average annual rate of 7.5 percent between 1969 and 1999. And as of October 2000, only 30 percent of households can afford the median-priced homes in the areas where they live. Further, in 1995, typical renters in California were paying one-third of their income for rent, compared to 28 percent nationwide. More than one-half of low-income renters in the State pay more than 50 percent of their income for rent. Cal. Senate 1227, 2001-2001 Reg. Sess. (Apr. 1, 2002).
In response to the housing crisis in California, the State Legislature will place Proposition 46: The Housing and Emergency Shelter Trust Fund Act of 2002, on the November 5, 2002 General Election Ballot. Proposition 46, if adopted by the voters, would allow the issuance of $2.1 billion in general obligation bonds for state housing programs. The measure, an urgency statute, would be the largest housing bond in the nation and would take effect immediately. Andrew Lamar, Housing, Education Bills Pass First Test And Both Bond Measures are likely to go before voters in November, Contra Costa Times, April 5, 2002, at A1. Proposition 46 addresses the ongoing housing shortage that currently exists in California by providing avenues through which people can attain housing. If adopted by the voters, Proposition 46 authorizes the financing of various existing housing and code enforcement programs and enacts additional programs designed to curb the current housing crisis.
Although the state faces a projected $23.6 billion deficit, the $2.1 billion general obligation bond would not have an immediate effect on general spending. Legislative Update (last accessed June 10, 2002). According to the Legislative Analyst's Office, if the bonds were sold at an average interest rate of 6.25 percent, which is the current rate for this type of bond, and repaid over 30 years, the cost would be about $4.7 billion to pay off both the principal and interest. League of Women Voters of California, In Depth Nonpartisan Analysis, Proposition 46: Housing and Emergency Shelter Trust Fund Act of 2002, (accessed October 15, 2002). The average payment would be about $157 million per year. Id. Generally, the interest on bonds issued by the state is exempt from both state and federal income taxes. Id. Historically, the type of bonds proposed by this measure has not received the federal tax exemption, resulting in a higher interest rate for the bonds. Id. Also, there is a one-time cost of about $25,000 to place the bond on the November 2002 statewide ballot. Cal. Senate 1227, 2001-2002 Reg. Sess. (Apr. 1, 2002).
A. Existing Law
In the late 1980's and early 1990's, voters approved Proposition 77, 84 and 107 that authorized the issuance of $600 million in general obligation bonds for state housing programs. Those bonds served as the primary funding source for the state's affordable housing programs. However, by the end of 1996, these funds were all committed. The state legislature then enacted the 2000-2001 Budget Act, which included more that $500 million in appropriations for housing programs. However, all funds have long since been committed.
a) Proposition 77
Proposition 77 was passed in 1988. It authorized the sale of $150 million in general obligation bonds to preserve and upgrade existing low-income housing. Proposition 77 was made up of two parts. Part one provided $80 million for loans to owners of potentially unsafe apartment buildings to improve the ability to withstand earthquakes. Part two authorized $70 million to greatly expand two existing housing rehabilitation programs. Both offered property owners 3 percent loans. One program paid for repair of apartment buildings or single family homes occupied by the poor, while the second program financed the purchase or repair of housing for the elderly or the mentally or physically disabled. Robert W. Stewart, California Elections Earthquake Preparation Proposition Rattles Libertarians, L.A. Times, May 13, 1988.
b) Proposition 84
Proposition 84, the Housing and Homeless Bond Act of 1988 was passed in 1988. This measure authorized the state to sell $300 million in general obligation bonds to help local groups provide shelter and housing for the homeless, elderly, handicapped and young families. Proposition 84 included provisions to assist persons to find jobs and to provide child-care services. The funds were offered in the form of deferred payment loans. The measure, provided money to build 8,000 rental units, 22,000 rehabilitated residential hotel rooms, 33,000 emergency shelter beds, 900 units for family housing, 300 housing units for seasonal farm workers, and assistance for 4,000 first-time home buyers. Frederick M. Muir, Campaign for Bond Issue to Aid Homeless Kicks Off, L.A. Times, July 27, 1988.
c) Proposition 107
Proposition 107, the Housing and Homeless Bond Act of 1990, was passed in 1990 and authorized a $150 million state bond to provide housing for low-income people and the homeless. The measure allocated $100 million for affordable rental housing, $25 million to help low-income people buy their first homes, $15 million in loans for the purchase and rehabilitation of residential hotels serving low-income persons, and $10 million for grants to non-profit agencies and local governments to purchase and repair emergency shelters for the homeless. Editorial Bonds Before Their Time, L.A. Daily News, May 17, 1990 at N22.
d) 2000-2001 Budget Act
The 2000-2001 Budget Act included more than $500 million in appropriation for housing programs. According to the State Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CHFA), these funds will be spent by the end of the 2001-2002 fiscal year. Cal. Senate 1227, 2001-2002 Reg. Sess. (Apr. 1, 2002).
2. Current Programs
Pursuant to Section 50003(b) of the Health and Safety Code, the basic goal for state government is to provide a decent home and suitable living environment for every California family. Three state agencies, the State Department of Housing and Community Development (HCD), the California Housing Finance Agency (CHFA), and the State Treasurer's Office attempt to accomplish this goal by administering a variety of housing programs. The existing state programs are as follows:
a) Multifamily Housing Programs: Provides loans to local governments, non-profit and for profit developers, for rehabilitation and new construction of affordable multifamily rental housing, and the preservation of existing subsidized housing that may convert to market rents.
b) CalHome Program: Provides funds for homeownership programs to assist low and very low-income households become or remain homeowners. Funds are allocated in either grants to programs that assist individuals or loans that assist multiunit homeownership projects. Grant funds may be used for first-time homebuyer down payment assistance, home rehabilitation, homebuyer counseling, home acquisition and rehabilitation, or self-help mortgage assistance programs, or for technical assistance for self-help and shared housing homeownership. Loan funds may be used for purchase of real property, site development, predevelopment, and construction period expenses incurred on homeownership development projects, and permanent financing for mutual housing or cooperative developments.
c) Emergency Housing Assistance Program (EHAP): Provides grants to counties and nonprofit entities to finance emergency shelters for homeless individuals and families. Funds may be used for rehabilitation, renovation, expansion of existing facilities, site acquisition, equipment purchase, vouchers, and operating costs.
d) Code Enforcement Program: Provides grants for cities and counties to expand staff for building code enforcement efforts, and also provides grants to local jurisdiction for Community Code Enforcement Pilot Program in up to four jurisdiction.
e) Farmworker Housing Grant Program: Provides grants to local public agencies, nonprofit corporations, and federally recognized Indian tribes to provide housing for agricultural workers. Grants are used for rehabilitation or new construction of owner-occupied housing, and construction and rehabilitation of rental units.
f) Housing Preservation Program: Combines predevelopment loans with a program of technical assistance to assist in the preservation of existing affordable rental projects.
g) Self Help Housing Program: Provides grants to local public agencies and nonprofit organizations that provide advice and technical assistance to help low and moderate-income owner-builders build and rehabilitate their homes.
h) Homebuyers Down Payment Assistance Program: Provides junior mortgage loans to assist low and moderate-income Californians purchase homes.
B. Changes Proposed by Proposition 46
1. Amendments of Health and Safety Code Sections: 50802.5, 51455, 51479, and 53130.
a) Section 50802.5
This section defines the authority of Department of Housing and Community Development. It states that the department shall solicit, receive, and select applications for grants pursuant to this measure from eligible organizations through an open, fair, and competitive process. This section also lists the categories for grant limits. Cal. Senate 1227, 2001-2002 Reg. Sess. (April 19, 2001).
b) Section 51455
This section provides that the School Facilities Fee Assistance Fund shall continue only with respect to any repayment obligation pertaining to that assistance or to any regulatory agreement imposed as a condition of that assistance. Id.
c) Section 51479
This section provides that in administering a program for the preservation of multifamily housing, the agency may segregate funds available for these purposes into separate accounts to reflect the different types of assistance. Id.
d) Section 53130
This section states that money deposited in the Roberti Affordable Housing Fund shall be allocated to various housing programs. These programs include the Rental Housing Construction Fund, the Housing rehabilitation Lain Fund, and the Emergency Housing and Assistance Fund. Id.
2. Additions of Health and Safety Code Sections: 50675.13, 50675.14, 51451.5, 51453, and 51505.
a) Section 50675.13
This section states in pertinent part that if Proposition 46 is approved, projects are to be prioritized in the following order: (1) Infill development; (2) Adaptive reuse in existing developed areas served with public infrastructure; and (3) Projects in proximity to public transit, public schools, parks and recreational facilities, or job centers. Id.
b) Section 50675.14
Under the Multifamily Housing Program, the department shall consider, commencing in the second year of funding, the feasibility and appropriateness of modifying its regulations to increase the use of funds by small projects. Id.
c) Section 51451.5
This section establishes the Homebuyer Down Payment Assistance Program of 2002. The Program provides two types of down payment assistance. First, the Program provides assistance to the purchaser of any newly constructed residential structure in a development in an economically distressed area. Second, the Program will provide down payment assistance to the purchaser of any newly constructed residential structure in a development project in the amount of school facility fees paid. This section also defines an economically distressed area. Id.
d) Section 51453
This section authorizes $50 million to be transferred to the School Facilities Fee Assistance Fund pursuant to section 53533 and 51451.5. Id.
e) Section 51505
This section provides down payment assistance for a portion of the Extra Credit Teacher Home Purchase Program. This section also states that the Extra Credit Teacher Home Purchase Program shall be subjected to, and meet the requirements of the Extra Credit Teacher Home Purchase Program and any other school personnel home ownership programs. Id.
3. Addition of The Housing and Emergency Shelter Trust Fund Act of 2002
a) Chapter 1. General Provisions
Chapter 1 states that Part 11 will be known and may be cited as the Housing and Emergency Shelter Trust Fund Act of 2002. The Chapter also defines two terms used in Proposition 46. Id.at 7. The term "Committee" refers to the Housing Finance Committee. Id. This Committee was created for the sole purpose of authorizing the issuance and sale of bonds pursuant to the State General Obligation Bond Law. Id. The Committee consists of the Controller, the Treasurer, the Director of Finance, the Secretary of the Business, Transportation and Housing Agency, the Director of Housing and Community Development, and the Executive Director of the California Housing Finance Agency. Id. The term "Fund" refers to the Housing and Emergency Shelter Trust Fund. Id.
b) Chapter 2. Housing and Emergency Shelter Trust Fund
Chapter 2 creates the Housing and Emergency Shelter Trust Fund. It states that the proceeds of bonds issued and sold pursuant to this part shall be deposited in this Fund. In addition, the money in the Fund shall be allocated and utilized in accordance with Chapter 4. Id.
c) Chapter 3. Fiscal Provisions
Proposition 46 would allow the state to sell $2.1 billion of general obligation bonds. Any bonds issued and sold pursuant to this part may be refunded by the issuance of refunding bonds in accordance with the applicable Government Code. Id.
d) Chapter 4. Allocation of Housing Bond Revenues
Money deposited in the fund from the sale of bonds pursuant to Proposition 46 shall be allocated in the following manner:
i. $910 million for the Multifamily Housing Program. This program provides deferred-payment loans to various entities for permanent and transitional rental housing assisting lower income households. The bill requires the following to be set aside:
a) $50 million for preservation of at risk housing pursuant to enabling legislation. (SB 372, Dunn)
b) $20 million to provide nonresidential space for supportive services, which includes job training, health services, and childcare near funded projects.
c) $25 million for matching grants to local housing trust funds pursuant to enabling legislation. (AB 1891, Diaz)
d) $15 million for student housing at University of California (UC) and California State University (CSU) campuses, with a dollar for dollar match from UC, CSU or private sources. These units would be restricted to full time students that meet the income eligibility requirements.
ii. $195 million for the Emergency Housing and Assistance Program (EHAP). This program provides funds for emergency shelters, transitional housing, and services for homeless individuals and families.
iii. $195 million for supportive housing projects within the Multifamily Housing Program to assist individuals and households moving from emergency shelters or transitional housing, or those who are at risk of becoming homeless.
iv. $200 million for the Joe Serna, Jr. Farmworker Housing Program. This program provides grants to local governments and nonprofit organizations for the construction and rehabilitation of housing for families of migratory agricultural workers. Of this amount:
a) $25 million for migrant farmworker housing.
b) $20 million for developments that provide health services to residents.
v. $205 million for the CalHome Program. This program provides grants and loans to local governments or non-profit organizations for any type of activity that helps low-income households achieve or maintain homeownership. Of this amount:
a) $75 million for the Building and Equity and Growth in Neighborhoods (BEGIN) Program pursuant to enabling legislation. (AB 1170, Firebaugh)
b) $5 million for exterior modifications for low-income tenants with disabilities to make rental housing ADA accessible.
c) $10 million for self-help housing construction management.
vi. $5 million for capital expenditures in support of local code enforcement and compliance programs.
vii. $290 million for the California Homebuyer's Down Payment Assistance Program (CHDAP). This program provides first-time homebuyers with a "silent" second-mortgage loan to reduce the principal and interest payments on the first mortgage. Of this amount:
a) $50 million for the Homebuyer Down Payment Program of 2002, which is established by this bill, to provide down payment assistance to the purchaser of any new residence in a development project in an economically distressed areas.
b) $85 million for the California Housing Loan Insurance Fund. This fund is used to develop programs that encourage and assist low or moderate-income families in getting a single-family home mortgage loan.
c) $25 million for teacher down payment assistance to cover a portion of the Extra Credit Teacher Home Purchase Program. This program assists teachers who are first-time low and moderate-income homebuyers.
d) $12.5 million for down payment assistance to low-income first time homebuyers who have received homeownership counseling and purchase in a community revitalization area.
viii. $100 million for capital grants to local governments as an incentive to increase housing pursuant to enabling legislation. (SB 423, Torlakson)
4. Related Legislation now incorporated in Senate Bill 1227
The bond appropriates funds to certain programs upon enactment of enabling legislation in the 2001-2002 Regular Session. The following is a list of pending legislation incorporated in the Emergency Shelter and Trust Fund Act of 2002.
a) Senate Bill 372 (Joseph Dunn)
Senate Bill 372 (Dunn) creates preservation interim loan programs to be administered by the Department of Housing and Community Development (HCD) for the purpose of preserving existing low-income rental housing. Bill Analysis of SB 372, Assembly Committee on Housing and Community Development, p. 1 (April 10, 2002).
b) Assembly Bill 1891 (Manny Diaz)
Assembly Bill 1891 (Diaz) establishes a matching grant program within the Department of Housing and Community Development to provide additional resources for both existing and new local housing trust funds that are dedicated to the creation of rental housing affordable to lower-income households. Bill Analysis of AB 1891, Senate Housing & Community Development Committee, p. 2 (May 21, 2002).
c) Assembly Bill 1170 (Marco Firebaugh)
Assembly Bill 1170 (Firebaugh) creates the Building Equity and Growth in Neighborhoods (BEGIN) Program within the Department of Housing and Community Development to provide grants to local governments for the provision of down payment assistance loans to low or moderate income homebuyers who purchase a home in a new development that has received one or more local government development incentives. Bill Analysis of AB 1170, Senate Housing & Community Development Committee, p. 1 (March 21, 2002).
d) Senate Bill 423 (Tom Torlakson)
Senate Bill 423 (Torlakson) creates the California Housing Incentive Program (CHIP), which will be administered by the Department of Housing and Community Development. The program provides additional property tax revenues to cities and counties in which new housing meets specified criteria. Bill Analysis of SB 423, Appropriations Committee Fiscal Summary, p. 1 (May 16, 2001).
There do not seem to by any significant drafting issues. However, the text of the Bond Act contains ambiguous terms that make it difficult to fully understand what the measure will do. The Bond Act does not define certain key terms. In Chapter 1, General Provisions of the Bond Act only defines two terms are defined; they are "Committee" and "Fund." The Bond Act does fails to define "low-income" or "moderate income" households. These terms are used throughout the measure. Without these critical definitions a reader of the measure would be unclear as to what qualifies as either a "low-income" or "moderate-income" household. Another ambiguous term that is not defined in the Bond Act is "disabled person." This is important to define in the Bond Act because this is the first time in any housing bond that funding has been allocated to people with disabilities.
However, these ambiguities can be resolved by the definitions contained in the California Health and Safety Code section 50093 and the American Disabilities Act (ADA). Section 50093 states that persons and families of low or moderate income means persons and families whose income does not exceed 120 percent of area median income, adjusted for family size by the department in accordance with the United States Department of Housing and Urban Development." CAL. HEALTH & SAFETY CODE § 50093 (West 2002). The ADA states that to be considered an individual with a disability and be covered under the ADA, the person must meet at least one of the following criteria under the definition:
1. Have a physical or mental impairment that substantially limits a major life activity (e.g., caring for oneself, walking, seeing, hearing, speaking, etc.);
2. Have a record of such an impairment; or
3. Be regarded as having such an impairment.
A. Federal Constitution
The Housing and Emergency Trust Fund Act of 2002 does not raise any federal Constitutional issues.
B. State Constitution
1. Single Subject Rule
Under California Constitution Article II, Section 8(d) it provides that "an initiative measure embracing more than one subject may not be submitted to the electors or have any effect." Cal. Const. art. II, § 8 (d). The California Supreme Court has held that if the provisions of an initiative are reasonably related to a common theme or purpose, the measure does not violated the single subject rule. Legislature v. Eu, 54 Cal.3d 492 (1991); Senate v. Jones, 21 Cal. 4th 1142, 1158 (1999). In Legislature, the court concluded that Proposition 140, the Political Reform Act of 1990, did not violate the single subject rule because the three separate reforms of the proposition were all aimed at the general goal of incumbency reform. Id. The court reasoned that "[a]n initiative measure does not violate the single-subject requirement if…all of its parts are 'reasonably germane' to each other, and to the general purpose or object of the initiative. Id. at 512.
The provisions of the Housing and Emergency Shelter Trust Fund Act of 2002 do not appear to violate the single subject rule. Here, all the Chapters of the Act seem to be reasonably related to a common purpose. The Act addresses the housing crisis in California and provides programs to help curb the housing situation. On the other hand, a case could also be made that the initiative covers more than one issue. The initiative incorporates loan programs, grant programs, programs that provide additional property tax revenues to cities and counties, and programs for emergency shelters. Most likely, however, the Housing and Emergency Shelter Trust Fund Act of 2002 does not violate the single-subject rule because all the chapters of the Act are reasonably germane to each other since the chapters address the housing crisis in California.
2. General Obligation Bond
A General Obligation Bond is "a bond secured by the full faith and credit of the issuing government and backed by revenues from its taxing power." Black's Law Dictionary 179 (6th ed. 1990). California Constitution Article XVI, section 1.5 allows the State Legislature to create and establish a General Obligation Bond Proceeds Fund in the State Treasury. (Cal. Const. art. XVI §§1, 1.5) In addition, California Constitution Article XVI, section 2(a) states in pertinent part that "[e]ach measure providing for the preparation, issuance and sale of bonds of the State of California shall hereafter be submitted to the electors in the form of a bond act or statute." (Cal. Const. art. XVI §2(a)) Moreover, in California, when the state wants to borrow money through a general obligation bond, the measure must be approved by a majority of voters. Pursuant to Article XVI, section 2(a), the provisions of the Housing and Emergency Shelter Trust Fund Act seem to be in compliance with the state constitution since the Bond Act is being presented to the voters on November 5, 2002.
3. Urgency Statutes
Pursuant to Government Code § 9600(b), urgency statutes go into effect immediately upon their enactment. Thus, if Proposition 46kis adopted, it would take effect immediately. Also, California Constitution Article IV, section 8(d) requires that a statement of facts constituting the necessity for immediate effect be set forth in one section of the bill. Section 12 of the Housing and Emergency Shelter Trust Fund Act of 2002 states that "[t]his act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall take immediate effect." The Legislature has found a wide array of statutes to be "urgent" within the meaning of the Constitutional provision. Rossi v. Brown, 9 Cal. 4th 688 (1995). In Rossi, the California Supreme Court reasoned that constitutional and charter provisions must be construed liberally in favor of the people's right to exercise the reserved powers of initiative and referendum. Id. at 695.
Here, the Housing and Emergency Shelter Trust Fund Act of 2002 seems to satisfy the constitutional requirement because it promotes public peace, health, and safety by providing housing, loans and grants to those in need. For example, the Bond Act will provide emergency shelter for the homeless, create affordable housing, and provide housing assistance to farm working families. Thus, it seems highly likely that the Bond Act complies with California Constitution Article IV, section 8(d).
Proponents of Proposition 46 note that California is in the midst of a severe housing crisis, which continues to worsen. Doug Shoemaker, Why do we need a housing bond? (accessed June 10, 2002). Over the last decade, California has produced less than half of the new housing units needed to keep up with demand. Id. Proponents believe that this Bond Act will help address the housing crisis. Id. According to the Department of Housing & Community Development, it will:
· Create up to 16,000 permanently affordable homes for rent
· Enable more than 65,000 California families to purchase their own home
· Provide housing assistance for 6,800 to 8,500 farm worker families
· Underwrite 20 million shelter bed days for homeless people. Id
.In addition, proponents contend that the Bond Act will result in at least $6 billion in newly leveraged investment in California. Id. Also, the combination of public and private investment will create approximately 276,000 full time jobs and generate $9.38 billion in wages. Id.
Proponents argue that more should be done in response to the housing crisis. Andrew LePage, Goal: Homes within reach, Sacramento Bee, April 4, 2002. They urge that affordable housing developers have enough capacity to quadruple the construction of affordable housing. Id. However, due to the lack of state funding only one of every four potential affordable housing developments are built. Id. Proponents hope that the state's housing crunch, and the absence of a large competing issue such as last year's energy crisis, will mean more legislators can focus on widening the years-old gap between job creation and housing construction in the state. Id. Experience has shown, however, that bonds are often the only way to provide desperately needed resources for housing programs. The Legislature may prefer to use bonds as opposed to direct spending of state funds when a project would be too costly to pay for at once. League of Women Voters of California, FAQs on Bonds, (accessed June 30, 2002).
Further, some of the Bond Act's programs will meet public policy goals. If the Bond Act is approved by the voters in this November's election, it would be the first time state bond money has gone towards student housing. Justin Scott, Legislature Passes Housing Bond (April 16, 2002). The Bond Act helps students because there are places in University areas in California where students end up sleeping in their cars or at friends' houses just for a safe haven at night. Id. The Bond allocates $15 million for student housing at University of California (UC) and California State University (CSU) campuses. Although the bond would divide up the $15 million among the 10 UC and 23 CSU campuses, leaving an almost insignificant amount for any one campus, the proposal nonetheless, is an encouraging step to enable developers to create more low-cost housing for students. Id. Also, included in this measure, for the first time in any housing bond, is $195 million for supportive housing for people with disabilities. Id. Moreover, this funding is for people who are disabled and would otherwise be at high risk of homelessness without providing supportive housing. This measure gives people with disabilities a unique opportunity to access funds provided by the state for housing. Michele D. Curran, Legislative Spotlight, California Network of Mental Health Clients (accessed June 25, 2002).
Lastly, environmental groups support this measure. Environmental groups contend that affordable housing protect open-space by improving the density of California's housing stock. Testimony of Tim Frank, Legislative Representative of the Sierra Club California (June 28, 2002). Environmental groups further contend that since housing occupies approximately ¾ of urban land, improving residential density is one of the important steps California can take to protect open space. Id. Environmental groups also contend that residential density also helps make transit more practical and thereby helps reduce pollution. Id.
Official proponents to the Proposition include Pete Major, Executive Director, Habitat for Humanity, Orange County; Barbara Inatsugu, President, League of Women Voters of California; Dr. Kathie Mathis, Executive Director, Association to Aid Victims of Domestic Violence; Tom Porter, State Director, AARP; Dan Terry, President, California Professional Firefighters. League of Women Voters of California, In Depth Nonpartisan Analysis, Proposition 46: Housing and Emergency Shelter Trust Fund Act of 2002, (accessed October 15, 2002).
Opponents to Proposition 46 argue that this bond does little to truly address housing issues in California. League of Women Voters of California, In Depth Nonpartisan Analysis, Proposition 46: Housing and Emergency Shelter Trust Fund Act of 2002, (accessed October 15, 2002). Opponents contend that of the $2.1 billion, only $290 million, about 15%, is put into the "Self-Help" fund that is supposed to help low-income, first-time homebuyers with down payments, supposedly a major selling point for the bond. Id. Of that, opponents contend that only $12.5 million is actually going to be used to help with down payments. Id. Further, to get a part of the $12.5 million, first-time homebuyers have to purchase their houses in government approved locations. Id. None of these areas are in the high-income areas where it is so hard to purchase a home. Id. This only applies to major urban centers and many of the least desirable places to live and raise children. Id.
Also, critics say that with interest, Proposition 46 will drain the state general fund of $4.7 billion over the next 30 years and provide only minuscule benefits to first-time homebuyers. Aurelio Rojas, Home sweet home: Prop. 46 would aid affordable housing, Sacramento Bee, October 10, 2002. (accessed October 15, 2002).
Opponents contend that if we want to improve housing availability in California, we first need to make it easier to construct new homes. League of Women Voters of California, In Depth Nonpartisan Analysis, Proposition 46: Housing and Emergency Shelter Trust Fund Act of 2002, (accessed October 15, 2002). Opponents contend that it is important to reduce the red tape that homebuilders have to go through to build new housing and make it easier to build condominiums. Id. Specifically, opponents feel that Proposition 46:
· Adds to the state's debts at a time when California is already on the brink of bankruptcy. Id.
· Does not have accompanying legislation that addresses liability issues. Id.
· Does not contain enough support for first-time homebuyers. Id.
· Will not reduce red tape that homebuilders go through. Id.
· Does nothing to address the barriers that exist to provide affordable, abundant housing in California. Id.
Official opponents to Proposition 46 include California State Senator Ray Haynes; Assemblyman Anthony Pescetti; Jon Coupal, President, Howard Jarvis Taxpayers Association; Marilee Monagan, Past Board Member, Women Escaping a Violent Environment (WEAVE); Lew Uhler, President, National Tax Limitation Committee. Id.
On November 5, California voters will determine whether Proposition 46 will become law. Proposition 46 would provide $2.1 billion in general obligation bonds for the ongoing effort to provide a decent home and suitable living environment for every California family through various programs. Proposition 46 seeks to help the current housing crisis that face the citizens of California. League of Women Voters of California, In Depth Nonpartisan Analysis, Proposition 46: Housing and Emergency Shelter Trust Fund Act of 2002, (accessed October 15, 2002). General Fund revenues would be used to pay these cost revenues over thirty years at an estimated cost of approximately $4.7 billion. Id. The average payment would be about $157 million per year. Id. Ultimately, the voters must decide whether the long-term benefits outweigh its costs.