Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: PROPOSITION 1 RESOLUTION OF SUPPORT - VETERANS AND AFFORDABLE HOUSING BOND ACT OF 2026
Date: October 13, 2026
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council adopt a resolution supporting The Veterans and Affordable Housing Bond Act of 2026, which authorizes $11.25 billion in state general obligation bonds to fund several housing affordability programs.
Background
The state uses general obligation bonds to fund various housing programs. Bonds are a way the state borrows money to cover the up-front costs of a development and then repays the money plus interest over time.
Proposition 1 would allow the state to sell $11.25 billion in general obligation bonds for housing purposes. This amount consists of (1) a $10 billion bond for a variety of housing programs that would be repaid by the State’s General Fund and (2) a $1.25 billion bond that would be repaid by veterans’ payments on their home loans.
According to the nonpartisan Legislative Analyst’s Office, Prop. 1 would provide subsidies for as many as 40,000 multifamily rental units and about 1,200 beds for university students. The funds could also help up to 40,000 households, including about 2,100 veterans, with homeownership.
Analysis/Discussion
The Veterans and Affordable Housing Bond Act of 2026 is a measure placed on the November 3, 2026, ballot by the Legislature that would replenish existing housing programs for the development, preservation, and rehabilitation of affordable housing projects. Additionally, the measure would provide funding to support the development of youth and veteran housing and promote homeownership in California. Here are the specific funding allocations proposed in the ballot measure:
$5.1 billion to the Multifamily Housing Program.
$1.25 billion to provide farm and home aid for veterans under the Veterans’ Farm and Home Purchase Act of 1974.
$1.15 billion to the Housing Rehabilitation Loan Fund, to be used for supportive housing.
Up to 15% shall be used to assist in the acquisition, conversion, or rehabilitation of interim housing to permanent housing.
$750 million to the Portfolio Reinvestment Program to preserve existing affordable housing projects.
$600 million to the CalHome Program.
$500 million to the Home Purchase Assistance Fund for home purchase assistance programs.
$500 million for the Infill Infrastructure Grant Program to assist in the construction and rehabilitation of infrastructure to support high-density, affordable, and mixed-income housing in infill locations.
$450 million to the Joe Serna, Jr. Farmworker Housing Grant Fund to support housing for agricultural employees and their families.
$350 million for new affordable student housing projects. $200 million to fund the acquisition and rehabilitation of unrestricted housing units and attach long-term affordability restrictions on housing units. $200 million to the Affordable Housing Innovation Fund to assist local housing trust funds in developing, owning, lending, or investing in affordable housing. $200 million to the Tribal Housing Grant Program to help tribes rebuild and reconstitute their communities.
$150 million for youth housing defined as housing for current or former foster youth, homeless minors or youth, or youth at risk of homelessness.
Arguments in Support
Proponents of the measure argue that it gives Californians the opportunity to provide housing to working families, veterans, people with disabilities and seniors; helps prevent homelessness by keeping vulnerable persons in their homes; expands homeownership opportunities; and maintains strict fiscal accountability and transparency without new taxes. They also argue that it would jumpstart the construction of tens of thousands of shovel-ready affordable homes across California.
The League of California Cities which has long supported investments that increase the supply of affordable housing also supports Prop. 1. Cal Cities maintains that, if approved by the voters, Prop. 1 would replenish funding for several successful state programs used by cities to support affordable housing and infrastructure. Prop. 1 could also fund innovative local programs like regional housing trusts and support cities in meeting their Regional Housing Need Assessment (RHNA) goals for current and future cycles.
In addition to funding new affordable housing projects, the measure would fund the rehabilitation and preservation of existing affordable housing, increase funding for homeownership programs, and support specific housing projects, such as student housing, infill development, supportive housing, and foster youth housing.
No argument against Proposition 1 was submitted to the California Secretary of State The full text of measure is attached, in addition to the Legislative Analysts Office (LAO) summary.
Financial Considerations
Support of Proposition 1 would not have any direct fiscal impacts to the City.
According to the nonpartisan Legislative Analyst's Office, the state General Fund cost to repay the bond would be $500 million to $600 million annually for about 25 years. The estimated annual cost would be about one-quarter of 1% (0.25%) of the state’s total General Fund budget.
Environmental Issues
Where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review.
This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.