The Question

Shall local bond measures to fund housing bonds for low- and middle-income Californians and public infrastructure projects be allowed to pass with 55% voter approval instead of the 66.7% approval currently required?

The Situation 

Bonds are a form of long-term borrowing used by cities, counties and special districts. Bond holders are repaid with interest and the repayment funds come from increased property taxes.  Local bond measures currently require approval of two-thirds of voters. The state of California is in critical need of more affordable housing. A typical house here costs around twice the national average and rents are about 50% higher than in other states. Upgrades to outdated local infrastructure like roads, hospitals, fire stations and water treatment facilities are also needed.

The Proposal

Prop 5 would:

• Lower the voting requirement so that some types of local bond measures could pass with 55% of the vote instead of two-thirds of the vote. This lower voting requirement applies to housing program bonds for low-income families, seniors, people with disabilities, veterans, and other groups. It could also be used to improve infrastructure for police, flood and fire protection, libraries, public health, and public transit. 
• Require those bonds to adhere to specific accountability provisions such as citizen oversight committees and annual independent audits.
• Apply to any qualifying local bond measure passed in the November 2024 election.

Fiscal Effects

The Legislative Analyst believes that if Prop 5 were to pass it would likely mean that more local bond measures would pass, resulting in increased funding for housing assistance and public infrastructure.  The amount of increase could be at least a couple billion dollars over the life of the bonds and would vary across local governments.  If more bonds were approved then local governments would have more costs, which would be paid with higher property taxes. The impact on California’s state budget is uncertain. There are possible long term state savings if local governments take greater responsibility for affordable housing.

Supporters Say

• Prop 5 gives local voters more autonomy to address the unique housing and infrastructure needs in their own communities.
• Prop 5 does not raise taxes.
• Qualifying bond measures would have strict accountability provisions, ensuring the funds are appropriately spent in the jurisdiction that approved them.

Opponents Say

• Prop 5 was written by politicians to push the cost of infrastructure onto local governments which increases debt. 
• Californians already struggle with the highest cost of living in the nation and Prop 5 would make everything more expensive.
• Prop 5 removes protections that California Constitution has provided taxpayers for many years.

For More Information