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CA
Prop 1
Affordable Housing Bond

Bond

Authorizes Bonds for Housing Affordability Programs

Authorizes $10 billion in general obligation bonds to fund production of affordable and supportive housing and $1.25 billion in mortgage revenue bonds to fund a homeownership program for veterans and military families.

SPUR's Recommendation

California’s housing affordability crisis continues to worsen, largely because of a supply shortage and inadequate funding to build more. Even with lower construction costs, affordable housing construction and preservation would still require significant, consistent government subsidies. Thousands of approved affordable housing projects have stalled because of a lack of financing.

General obligation bonds are needed periodically to replenish funding for the state’s main affordable housing finance programs. Prop. 1’s proposed bond funds pair with state and federal Low Income Housing Tax Credits to finance affordable housing developments. This measure is critical to expanding affordable housing opportunities for lower-income residents across California through new construction, preservation, and homebuyer assistance. Funds would be distributed through well-established state programs with a proven track record of success.

Vote YES

What Prop. 1 Would Do

According to the California Housing Partnership, Proposition 1 will help finance more than 40,000 shovel-ready affordable rental homes and help 20,000 California households attain homeownership.1 The bond proceeds would replenish key long-standing state affordable housing financing programs and be allocated as follows:

$5.10 billion for the Multifamily Housing Program. At least 10% of units in each development receiving these funds must be affordable to extremely low-income households.  

$1.25 billion in self-supporting revenue bonds for the CalVet Home Loan Program to help veterans and military families buy a home. These bonds are repaid entirely through mortgage payments and do not rely on taxpayer funding.  

$1.15 billion for supportive housing administered through the Multifamily Housing Program. The program requires funding to create a reserve account to cover operating deficits for developments receiving funding.  

$750 million for the Portfolio Reinvestment Program to rehabilitate and extend the long-term affordability of state-funded multifamily rental housing projects that are at risk of conversion to market-rate housing.  

$600 million for the CalHOME Program for new construction of affordable ownership homes.  

$500 million for the My Home down payment assistance program for lower- and moderate-income households. 

$500 million for the Infill Infrastructure Grant Program of 2019 for grants supporting infrastructure needed to support developing affordable and mixed-income housing in infill locations.  

$450 million to the Joe Serna, Jr. Farmworker Housing Program to fund grants or loans for the construction or rehabilitation of housing for agricultural employees and their families.  

$350 million for new affordable student housing projects split evenly between the University of California and California State University systems.  

$200 million for the Tribal Housing Grant Program to finance housing and housing-related activities enabling tribes to rebuild and reconstitute their communities.

$200 million for a program to be created by the Legislature that funds acquisition and rehabilitation of unrestricted housing units (i.e., unsubsidized housing that may naturally be affordable) and the attachment of long-term affordability restrictions to the units.  

$200 million to the Local Housing Trust Fund Program to fund competitive grants and loans to local housing trust funds that develop, own, lend, or create or preserve affordable housing.  

The Backstory

The state has historically used voter-approved general obligation bonds to fund affordable housing programs. In 2018, voters approved Proposition 1, the Veterans and Affordable Housing Bond Act of 2018, which provided $4 billion in funding, including $1 billion for the Department of Veterans Affairs program and $3 billion for various affordable housing programs. As of fiscal year 2023–24, when the 2018 Prop. 1 bond funding ran out, 22,735 units of housing had been produced.  

Enterprise Community Partners’ 2026 California Affordable Housing Production Pipeline report, released in March, found that nearly 40,000 approved affordable housing units are frozen due to a lack of funding and could be built with this new financing source.2 

The proposed bond has undergone a rigorous process and has broad support. Over the past four years, the Legislature has introduced various affordable housing bond measures, including bills by Assemblymember Wicks and Senator Cabaldon. Those bills have moved through the legislative process over the past year and a half, giving the members of the Legislature multiple opportunities to negotiate the terms. Governor Newsom, Senate President Pro Tem Limón, and Assembly Speaker Rivas negotiated final amendments for the authorizing legislation, SB 417, the Veterans and Affordable Housing Bond Act of 2026. The State Legislature voted with supermajorities in each house to place the proposition on the November 2026 ballot.  

Legislative analyses of the measure find the total cost to pay off the bonds would be approximately $17.39 billion in principal and interest. Average annual debt service payments from the State’s General Fund are estimated at approximately $580 million when all bonds are sold, assuming an interest rate of 4.02% and a 30-year maturity. This amount of annual debt service represents about 0.26% of the State’s General Fund budget.  

According to the State of California Debt Affordability Report issued by the state treasurer in October 2025, California’s ratio of General Fund-supported debt service to General Fund revenues was 3.59% in fiscal year 2024–25 and was estimated to be 3.95% in fiscal year 2025–26.3 This ratio is in line with the 4% historical average for bonded indebtedness.  

A simple majority (50% plus one vote) of California voters is required to pass Prop. 1.

Equity Impacts

The Bay Area Equity Atlas finds that all nine Bay Area counties struggle to come anywhere close to meeting their state-mandated share of new housing construction. In 2023 and 2024, the Bay Area permitted just 9% of its required units, including only 5% of required very-low-income units and 10% of required low-income units.4 

This lack of affordable housing options increases displacement pressures on lower-income households and households of color. The Bay Area Equity Atlas’s Black Communities and the Bay Area's Housing Crisis report, published in April 2025, found the Bay Area lost more than 5,000 Black-owned households during the 2010s, with significant declines in historic Black communities in the East Bay, San Francisco, and Solano County, while the number of Black renter households increased by just 300.5 

Sufficient funding to create below-market-rate rental and homeownership opportunities will help address the affordability challenges and displacement pressures faced by lower-income households, Black households, and other households of color.

Pros

  • The state faces a chronic affordable housing crisis that cannot be addressed without significant ongoing public investment to lower housing costs for lower-income households.
  • The bond would make the most of recent federal changes to the Low-Income Housing Tax Credit program that allow California to nearly double its affordable housing production: if the state invests $4.1 billion annually, it can leverage $6.7 billion in available federal funding.
  • The funding would be distributed through existing state programs with a proven track record of producing affordable housing options for lower-income residents.
  • The Bay Area is well positioned to use the funds effectively, given the number of highly effective nonprofit affordable housing developers here.

Con

  • The bond would contribute to the state’s debt burden, with debt service on the bond representing 0.26% of the overall State General Fund budget.
Vote YES on Prop 1 - Affordable Housing Bond
Footnotes

1 California Housing Partnership, “Quantifying the Impacts of Proposition 1,” September 1, 2026.

2 Enterprise Community Partners, “2026 California Affordable Housing Production Pipeline,” March 3, 2026.

3 Fiona Ma, “Debt Affordability Report,” October 1, 2025.

4 Ryan Fukumori and Simone Robbennolt, “The Bay Area Region Continues to Fall Short of Its Affordable Housing Production Needs,” Bay Area Equity Atlas, accessed September 22, 2026.

5 Ryan Fukumori, Ezinne Nwankwo, and Alex Balcazar, "Black Communities and the Bay Area's Housing Crisis," Bay Area Equity Atlas, April 2025.