$20B Housing Bond Taken Off Bay Area Ballot

A Bay Area initiative to fund up to 90,000 affordable housing units with a $20B regional bond has been pulled off the ballot as it faced a taxpayer lawsuit.

The Bay Area Housing Finance Authority (BAHFA) voted last week to remove the regional general obligation bond from the Nov. 5 ballot, citing the lawsuit and projecting that the measure would be defeated in the upcoming election.

When it unanimously voted two months ago to put the bond issue before voters in the nine-county Bay Area region, the agency predicted that funds from bonds generated by ad valorem property taxes could finance up to 90,000 units of affordable housing.

On August 7, a group of taxpayers filed a lawsuit against BAHFA and the election directors of the nine Bay Area counties, claiming that the ballot measure misstated the annual cost of repaying the bond at $670M instead of an estimated $911M.

BAHFA called an emergency meeting to correct the error but the lawsuit was not dropped, the San Francisco Business Times reported.

On Wednesday, the ballot measure was withdrawn by BAHFA at a public hearing held after a closed-door meeting with legal counsel on looming challenges to the bond measure.

In a statement, the BAHFA Board of Directors said it had “always understood that it would be a steep climb to establish this source of funding.” The board said the bond measure faced an uphill battle to win the required two-thirds majority (66%) approval to be enacted.

“Recent developments have led the Board to conclude that the wise choice is to look ahead to another election season for a regional housing measure when there is more certainty,” the BAHFA statement said.

The Yes on RM4 Coalition, which campaigned for the regional bond, said it was dropping the measure to focus on Proposition 5, a constitutional amendment on the November ballot that would make it easier to pass local and regional housing and infrastructure bonds by lowering the electoral threshold from two-thirds to 55%.

Had RM4, which stands for Regional Measure 4, stayed on the ballot, the $20M bond would have had to gain approval from 66% of Bay Area voters across San Francisco, Alameda, Contra Costa, Marin, Napa, San Mateo, Santa Clara, Solano and Sonoma counties.

If the bond issue was approved by voters, 80% of the $20B would have been divided between the nine counties and the region’s largest municipalities, setting aside 20% for BAHFA to develop housing for homeless or extremely low-income individuals across the Bay Area.

Under a state-mandated Regional Housing Needs Allocation (RHNA) Plan for the Bay Area, the California Department of Housing and Community Development required the region to plan for and revise local zoning to accommodate 442,176 additional housing units during the 2023-2031 period.

San Francisco’s state-mandated housing goal calls for the city to add 82,000 units by 2031, with more than half of the units affordable. Housing advocates are warning that the withdrawal of the regional general obligation bond from the Nov. 5 ballot makes it unlikely the city will meet its goal, the San Francisco Chronicle reported.

The report cited several early-stage affordable housing projects in San Francisco that are likely to face delays of several years, including a low-income residential complex in proximity to the Mission BART station.