How Proposition 5 Would Impact Affordable Housing and Property Taxes

Proposition 5 is not the flashiest measure Californians will see in November, but both opponents and supporters say its impact shouldn’t be understated.

Right now, most bond measures need a two-thirds supermajority, or 66.67%, of voter approval to pass. Proposition 5 would lower that threshold to 55% for bond measures that are earmarked for affordable housing and public infrastructure projects.

Proponents argue money unlocked through Proposition 5 could launch local governments into a future of fiscal agency, with voters able to approve funding more easily for much-needed affordable housing and public infrastructure projects.

Opponents, however, caution it will throw the state back to the bad old days of rapidly rising property taxes that once threatened to oust owners from their homes.

What are proponents saying?

Many affordable housing advocates want this proposition to pass so cities can raise more money to build or update badly needed housing and infrastructure. They point to past efforts that fell short despite earning more than 50% of the vote.

Amie Fishman, Director of the Nonprofit Housing Association of Northern California, said cities often have to rely on state funding because bond measures are hard to get approved at the local level.

“Prop. 5 is a crucial step to empowering local communities to address local affordable housing and infrastructure needs,” she said. “It allows local communities to take control.”

The measure would mirror a similar one that California voters approved in 2000, which lowered the voter threshold needed to pass school bonds.

What are critics saying?

Critics of Proposition 5 worry that voters could be confused by the text of the measure, which reads, “Allows local bonds for affordable housing and public infrastructure with 55% voter approval.”

They say it lacks context because it doesn’t specify the current threshold for approval, which is 66.67%, and voters may think they are being asked to increase the threshold from 50% to 55%.

Opponents, like former San Jose City Councilmember Johnny Khamis, are also concerned about the potential increase in property taxes if the proposition passes and it becomes easier to pass bond measures.

While he agreed that cities need to plan for more affordable housing and infrastructure, the burden to pay for that could fall on people like his mother, who is retired and living on a fixed income.

“This could open the floodgates to new propositions and taxes and make it much harder for seniors like my mother to live in the area,” he said. “It actually reverses a lot of the protections we had under Prop. 13.”

What is Proposition 13?

Voters passed Proposition 13 in 1978 after property taxes rose so sharply that some people were priced out of their homes. Proposition 13 amended California’s Constitution, limiting the tax rate to 1% of the property’s assessed value and capping the yearly increase to no more than 2%.

The amendment also required a two-thirds supermajority to approve any local “special taxes,” which means taxes devoted specifically for one purpose, including the debt service needed to pay for bonds that can fund anything from homelessness services to infrastructure or schools.

How is Proposition 5 related to Proposition 13?

Proposition 5 would remove that two-thirds supermajority requirement for bond measures specifically dealing with affordable housing and public infrastructure. However, ballot measures that chip away at Proposition 13 protections can be a hard sell for some voters.

More than 40 years after Proposition 13 passed, 65% of Californians still support it, according to a 2018 study from the Public Policy Institute of California. That same study found that 56% of likely voters oppose lowering the two-thirds threshold.

Mark Baldassare, the author of that study, said it can be hard to convince people that something that was approved a long time ago, like Proposition 13, needs to be changed.

“It’s a hurdle, particularly when it may impact their own taxes and ultimately the cost of living at a time when people are sensitive to their rising costs of living in California,” he said. “At the end of the day, it’s the arguments around needing to do more locally about affordable housing and infrastructure that will convince people that it’s important to make an exception in these two cases.”

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