Developers working on affordable housing in California often run into a stubborn problem: the expense of building new homes outpaces what affordable rents can support. Proposition 1, a proposed $11.25 billion housing bond set for the November ballot, targets this financial shortfall and could change how affordable housing projects move forward statewide. Of the total, $10 billion would go to existing affordable-housing programs and $1.25 billion would back veterans’ home-loan assistance. The measure, formally called the Veterans and Affordable Housing Bond Act, is scheduled for a statewide vote in November 2026. The bond would act as gap financing, helping projects reach the minimum feasibility lenders and tax-credit investors require, especially in high-cost markets where regulated rents fall short of covering land, labor, materials, and compliance. GlobeSt.com and other outlets have reported that the measure is structured to leverage federal Low-Income Housing Tax Credits, local funding, and private investment.
Welton Jordan, chief real estate development officer at EAH Housing, said public funding is essential for making these projects work. According to Jordan, the Veterans and Affordable Housing Bond would let developers combine state funds with federal tax credits, local contributions, and private investment. This mix, he said, makes it possible to build affordable homes that no single funding source could deliver. EAH Housing manages more than 1,500 homes statewide that could benefit from the investment if the bond passes.
Funding predictability and project planning
Jordan pointed out that predictable funding is critical for developers to plan, secure financing, and keep projects moving. The bond proposal comes as California’s funds for affordable housing have reportedly dried up, leaving more than 46,000 homes across nearly 500 planned projects waiting for state dollars. A separate estimate cited in voter-guide coverage put recent affordable-housing projects near Menlo Park–Atherton at more than $750,000 per apartment, showing why public subsidies are needed even when state funding covers only part of the total development cost. The Sacramento Bee described about $10 billion of the bond as aimed at closing financing gaps for nearly 40,000 affordable rental homes already in the pipeline, though project definitions and methodologies may differ between sources. The bond’s practical effect would depend on how quickly state agencies allocate awards and whether developers can keep other financing commitments while waiting. The Sacramento Bee also called for the state to create a transparent public dashboard tracking project costs, awards, construction progress, and completed homes (Sacramento Bee).
He also said the bond's impact depends on how efficiently the funds are used. "The opportunity is not just to allocate funding, but to deploy it in a way that helps projects move forward efficiently and creates affordable homes that serve communities for decades," Jordan said. Local-government and housing-sector organizations, including the League of California Cities, have publicly supported Proposition 1, highlighting the chance for cities and developers to compete for funding from statewide programs. Some local officials, such as Vacaville Vice Mayor Silva, have raised concerns about the allocation for veterans and the complexity of applying for funds, stressing that implementation—not just voter approval—will determine whether smaller jurisdictions and nonprofit developers can access the money efficiently.
Barriers beyond funding
While public investment plays a major role, Jordan noted that building affordable housing in high-cost markets such as Oakland, Los Angeles, and the Monterey Peninsula takes more than money. Developers must work through complex permitting and approval processes and manage rising construction costs. They also need to coordinate multiple sources of financing. These hurdles can delay or even derail projects. Jordan also said that delays in one funding source can put the entire capital stack at risk, making predictable state funding crucial for keeping a steady development pipeline.
Streamlining development processes and improving coordination among agencies could further boost the effectiveness of Proposition 1, according to Jordan. For organizations like EAH Housing, these changes would help ensure that new affordable homes reach communities where they are needed most. The reported beneficiaries of the bond include affordable-housing developments serving low-income renters, veterans, seniors, people with disabilities, farmworkers, students, and first-time homebuyers.
California's approach to affordable housing policy may offer lessons for other states, as Jordan told GlobeSt.com. The focus on combining funding sources and improving predictability could help address similar challenges elsewhere. Related efforts to strengthen tenant protections have also been reported earlier in California cities.
Fiscal impact and debate
The California Legislative Analyst’s Office estimated that repaying the housing bond would cost the state about $500 million to $600 million annually for roughly 25 years, reflecting debt service on a general-obligation bond. Critics, including the San Jose Mercury News editorial board, have argued that borrowing costs make the measure more expensive than funding housing directly from available state revenues and warn that it could constrain future state budgets (San Jose Mercury News). Some Republican lawmakers objected that veterans would receive only about 11.1% of the bond proceeds, or $1.25 billion, while most would go to broader affordable-housing programs. The California Republican Party was reported as officially neutral on the measure, and formal opposition has remained limited (Jefferson Public Radio).
As the state waits for the November vote, Proposition 1’s potential to change affordable housing development remains a central issue for policymakers, developers, and residents.
