Bay Area’s $20 Billion Housing Bond Pulled From Ballots, Leaving Advocates ‘Heartbroken’

This report contains a correction.

A proposed $20 billion affordable housing bond measure for the Bay Area will have to wait for a future election after it was pulled from the November ballot on Wednesday.

The proposal, called Regional Measure 4, was more than four years in the making and would have authorized funding for an estimated 70,000 new subsidized apartments and homes. It was ultimately imperiled, however, by a lawsuit challenging a “mathematical error” in the cost of repaying the bond, as well as by a desire to focus advocacy efforts on a related statewide proposition.

The Bay Area Housing Finance Authority, which introduced the measure, voted unanimously Wednesday to remove it from ballots in all nine counties.

Advocates for the regional measure said they were “heartbroken” by the decision.

“This is a really difficult day for the campaign side,” said Heather Hood, a vice president at the affordable housing builder Enterprise Community Partners. She teared up while recommending the authority pull the measure. “I really, deeply regret this.”

Authority officials estimated the measure would have raised property taxes by around $19 on average for every $100,000 of assessed home value, generating roughly $670 million a year. However, in a lawsuit filed on Aug. 8, a group of residents contested that assertion, saying the total cost of the bond — nearly $48.3 billion, spread out over roughly 50 years — would have actually generated nearly $911 million annually, costing taxpayers more money than the authority had stated.

“And most of that money would have gone towards financing costs,” said Jason Bezis, an attorney for the plaintiffs.

The authority amended the measure, and advocates said they were confident in defending against other allegations in the complaint that challenged the wording of its 75-word ballot question. Both sides were due to appear in court for a hearing on Wednesday.

The larger issue for advocates, however, was polling results that revealed a narrow path to victory for the regional measure, which depended largely on a separate statewide proposition passing to buoy the bond’s chance of success.

Currently, infrastructure and housing bonds require a two-thirds supermajority to pass. Proposition 5, which is still slated to appear before voters in November, proposes to amend the California Constitution by lowering the voting threshold for infrastructure and housing bonds from a two-thirds supermajority to 55%. If voters approve Prop 5, the regional bond would have been subject to the lower threshold.

“The yes vote, including ‘lean yes,’ was 52/54 percent (depending on wording) and 50 percent, respectively,” the staff report reads. “Given voter attitudes, it has been clear for several years that the Bay Area affordable housing bond’s viability is inextricably linked to passage of an amendment to the state’s constitution to adjust the vote threshold.”

A separate lawsuit, filed this month by the Howard Jarvis Taxpayers Association, had challenged the label that will appear on the ballot for the statewide proposition because it does not specify that the threshold would be reduced. The ballot label — a condensed version of the ballot title and summary — states instead that the proposition “[a]llows approval of local infrastructure and housing bonds for low- and middle-income Californians with 55% vote.”

However, the association lost on appeal. Laura Dougherty, director of legal affairs for the association, said the label will remain as is.

“It’s unfortunate for the voters,” Dougherty said, adding that if the proposition passes, “It allows an increase in property taxes that is not consistent with the spirit of Proposition 13 and is not consistent with the protection that we’ve had since 1879, which is to make sure that bonds require two-thirds voter approval.”

At the meeting on Wednesday, many supporters of Regional Measure 4 vowed to turn their attention to Proposition 5.

“We need to focus all of our efforts there to getting [Proposition 5] passed,” said Amie Fishman, executive director of the Non-Profit Housing Association of Northern California. “We knew that doing them both together would be hard. And right now, we have to pivot to a sequential plan.”

Critics, on the other hand, lauded the authority’s decision to pull the measure. San Mateo County Supervisor Ray Mueller said now was not the time to ask residents to dig into their pockets.

“Inflation is crushing our region’s residents. There’s a reason the polling for this measure has been negative,” he said. “It simply is a terrible time to ask residents to pay more taxes.”

Johnny Khamis, a former San Jose city council member and lead plaintiff in the lawsuit against the housing finance authority, pointed to a recent state audit, which blasted the city for failing to adequately track whether its current spending to address homelessness is actually working.

“Governments, even when they have money, have not proven to be good stewards of their money,” Khamis told KQED. “There’s no accountability here.”

Members of the authority said they planned to reintroduce some version of the bond measure in 2026.