CITY OF OAKLAND STAFF/COUNCIL ANALYSIS
Prop 1: The Veterans and Affordable Housing Bond Act of 2026 TO: Honorable Members of the Oakland City Council
FROM: Office of Mayor Barbara Lee
STAFF CONTACT: César Macias, State and Federal Affairs Manager, Office of the Mayor SUBJECT: RESOLUTION IN SUPPORT OF PROPOSITION 1, WHICH, IF PASSED BY VOTERS IN THE GENERAL ELECTION ON NOVEMBER 3, 2026, WOULD AUTHORIZE $11.25 BILLION IN STATE GENERAL OBLIGATION BONDS FOR HOUSING
AFFORDABILITY PROGRAMS
RECOMMENDED COUNCIL ACTION
Mayor Barbara Lee recommends 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.
Summary:
The Veterans and Affordable Housing Bond Act of 2026 would authorize the state to issue $11.25 billion in general obligation bonds to fund several categories of existing housing programs, including:
• Multifamily Housing Program
• Infill Infrastructure Grant Program
• CalHome Program
• Farmworker Housing
• Tribal Housing Grant Program
• Higher Education student housing
• Local pilot programs
• Veterans’ Housing
Full text of measure: Bill Text - SB-417 The Veterans and Affordable Housing Bond Act of 2026.
LAO Analysis: Proposition 1 [Ballot]
Major Provisions:
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 mixedincome 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.
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.
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 California1.
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.
Mayor Lee’s Advocacy with the Big City Mayors:
Mayor Barbara Lee has made state investment in affordable housing a central part of her advocacy with the Big City Mayors, the coalition of mayors of California’s 13 largest cities.
On August 19, 2026, Mayor Lee joined the mayors of Sacramento, San Diego, San Francisco, Fresno, and Long Beach at the State Capitol to urge California voters to approve Proposition 1.
In her remarks, Mayor Lee presented Oakland as proof that sustained housing investment delivers results, and she was clear that the City cannot keep its pace of production, or finish what it has started, without Proposition 1. She noted that California’s last housing bond, approved by voters in 2018, was fully committed years ahead of schedule, and that tens of thousands of affordable homes across the state, including projects in Oakland, are waiting on the last increment of funding to break ground. Mayor Lee also emphasized that Proposition 1 would help working families become homeowners, which matters for equity in communities where Black and Latino homeownership has not recovered from decades of redlining and discriminatory lending.
Oakland’s Record on Affordable Housing Production:
Oakland was the first city in the Bay Area to earn the State of California’s Prohousing Designation, and the City has not stopped building. Oakland voters approved local housing bonds, including Measure KK (2016) and Measure U (2022), and the City has focused its direct subsidies where they matter most: deeply affordable housing and housing for people exiting homelessness. The results:
• Since 2018, Oakland has completed 17,000 new homes, including 3,000 affordable units.
• In the last five years, Oakland has completed 2,600 units of affordable and homeless housing.
• In the last year alone, 1,000 homes opened their doors, 340 of them built specifically to move people out of homelessness and into stability. prop1.pdf1
• Today, 1,600 more units are under construction, with 800 designated as exits from homelessness.
These investments are paired with a coordinated response to homelessness. Oakland created its first Office of Homelessness Solutions, adopted a citywide Homelessness Strategic Action Plan, and launched a five-point plan to reduce homelessness by 50 percent in five years. Overall homelessness in Oakland has dropped 20 percent in the last two years.
The Need for More Production:
Oakland’s progress does not yet match the scale of the need. Under its 2023–2031 Housing Element, Oakland must plan for 26,251 new homes, including 10,261 homes affordable to very low- and low-income households. Local bond dollars alone cannot close that gap.
Affordable housing developments typically depend on a state funding award to complete their financing, and with the 2018 state bond fully committed, approved projects in Oakland are waiting on that last increment of funding to break ground.
How Proposition 1 Would Help Oakland Complete Its Pipeline:
Proposition 1 would replenish the state programs that Oakland’s affordable housing pipeline relies on:
• The Multifamily Housing Program ($5.1 billion) provides the gap financing that moves approved affordable rental projects into construction. • Supportive housing funds ($1.15 billion) would create permanent exits from homelessness, with up to 15 percent available to convert interim housing to permanent housing.
• The Portfolio Reinvestment Program ($750 million) and acquisition and rehabilitation funds ($200 million) would preserve existing affordable homes and keep residents housed.
• The Infill Infrastructure Grant Program ($500 million) and the Affordable Housing Innovation Fund ($200 million) would support infill development and local housing trust funds.
Without Proposition 1, Oakland’s pipeline stalls. With it, the City can complete the projects already approved, sustain its pace of production, and keep turning shelter beds into permanent exits from homelessness.
Fiscal Impact:
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.
Adoption of this resolution has no direct fiscal impact on the City of Oakland.
Existing Policy:
The City of Oakland is a member of the League of California Cities and supports Cal Cities’ 2026 Advocacy Priority to secure investments to increase the supply of affordable housing, including state and federal programs that assist in providing financing for affordable housing, as well as the development of fiscal tools and incentives to assist local governments in their efforts to encourage housing and finance the infrastructure to support housing and the establishment of an ongoing state commitment for funding affordable housing.
The City of Oakland holds the State’s Prohousing Designation and has an adopted 2023– 2031 Housing Element. Oakland voters have approved local housing bonds, including Measure KK (2016) and Measure U (2022), and the City has established an Office of Homelessness Solutions and adopted a citywide Homelessness Strategic Action Plan.
Mayor Lee is a member of the Big City Mayors coalition, which is urging voters to approve Proposition 1. Support for Proposition 1 is consistent with these policies and commitments.