SACRAMENTO, CA.—The first of the $2.85 billion Proposition 1C bond money is expected to hit the streets this summer. California voters approved the hefty housing bond measure in November 2006.

“We anticipate that the $2.85 billion is going to leverage another $8 billion-plus in investment and lead to the construction of 118,000 housing units and 2,350 emergency shelter spaces,” said Lynn Jacobs, director of the state Department of Housing and Community Development (HCD).

Proposition 1C is the nation’s largest housing bond measure. Notices of funding availability can be found at

Some of the early bond money that is scheduled for release includes about $70 million through the popular Multifamily Housing Program (MHP), which provides low-interest loans for the development of affordable rental housing. Funds for supportive housing, homeownership, and farmworker housing may be allocated as well. Between HCD and the California Housing Finance Agency, roughly $160 million in bond funds are scheduled to be allocated by July 1, according to Jacobs.

Proposition 1C was approved just as funds from an earlier $2.1 billion housing bond were beginning to run out. Jacobs estimated that about half of the new bond money will go toward refunding programs like MHP that have been supported by Proposition 46, which was passed in 2002.

New housing programs

There are four new programs under Proposition 1C, three of which still require enabling legislation. These three are an $850 million housing and infill incentive program, a $200 million housing-related parks program, and a $100 million affordable housing innovation program.

A $300 million transit-oriented development program does not require legislation.

Advocates have different ideas about how the $850 million in the infill program should be distributed, and about affordability thresholds.

“We see this money as being life changing in California,” Jacobs said, explaining that HCD expects the infrastructure projects funded under this program to serve as catalysts in producing not just one but many affordable housing developments near the improvements. HCD’s proposal is consistent with Assemblywoman Bonnie Garcia’s (R-Cathedral City) Assembly Bill 1231, which calls for HCD to make infrastructure grants to cities and counties for construction or acquisition of capital assets. It requires the grants to be used for infrastructure directly related to facilitating the development of the infill housing project. If the housing identified in the grant application is not produced in five years, the grant would have to be reimbursed. The depth of affordability of the housing units would be one of the factors considered in rating the applications, but specific thresholds have not been set.

The California Housing Consortium (CHC), which co-directed the Yes on Prop 1C campaign along with Housing California, has offered its own ideas. CHC believes that developers and housing sponsors should be eligible to apply for these funds. CHC says the funding should not be exclusively reserved for cities and counties to pursue housing incentive programs and off-site infrastructure improvements, said Executive Director Jeff Loustau.

CHC, a statewide advocacy organization that takes a “big tent” approach to affordable housing issues, also has proposed that a minimum of 10 percent of a project’s units be set aside at 60 percent of the area median income (AMI) for rental projects and 120 percent of the AMI for homeownership projects.

Housing California, a statewide affordable housing advocacy and education organization, also wants to see developers be eligible to apply. It would like to see 25 percent of the homes in any project that’s allocated funds from the infill program set aside for very low income residents. Housing California also supports having net density threshold requirements for a project.

Officials hope that legislation is finalized by this spring or early summer. Overall, about half the bond funds will go toward affordable rental housing and half toward homeownership programs.

Although the passage of the measure was good news, housing advocates are quick to point out that the bond is not a permanent source of funding for affordable housing. They are hopeful that the state will establish a housing trust fund.