California voters regularly name out-of-reach housing costs and homelessness as among the most important issues facing the state.

Now lawmakers are calling their bluff. Next year the electorate will likely get the chance to put unprecedented gobs of money where its mouth is.

There’s the $10 billion bond proposal, spearheaded by Oakland Democratic Assemblymember Buffy Wicks and currently slated for the March ballot, that would replenish the coffers of some of the state’s premier affordable housing programs. If a majority of voters approve, it would be the largest housing-related IOU that California has issued since at least 1980.

Next, there’s the $4.68 billion measure, backed by Gov. Gavin Newsom and also scheduled for March, to build housing and expand psychiatric and substance abuse treatment for homeless Californians. That would be the largest-ever expansion of behavioral health funding in California, according to the governor’s office. As a housing-related bond, it would also be the third largest such measure in recent memory.

But both of those state measures could be dwarfed by a third proposed at the regional level. The recently created Bay Area Housing Finance Authority, tasked with funding affordable housing projects across the nine counties that surround the San Francisco Bay, is still figuring out exactly how much it wants to ask voters to sign off on in November 2024. But it could be as much as $20 billion.

Three of the largest housing bonds in California history would seem to be great news for housing advocates.

So why are some so worried?

“I’m a runner. I’ve never run my three best races in a row,” said Louis Mirante, a lobbyist with the Bay Area Council, where he focuses on housing legislation.

With lawmakers considering a bevy of other bond measures in 2024 that could total as much as $80 billion — more potential debt than the state has put on the ballot since at least 1980, even adjusting for inflation — the sheer scale of the state’s potential borrowing plans could test the upper limit of what voters are willing to stomach.

“It’s conventional wisdom that if you put a bunch of bond proposals in front of voters, they get overwhelmed and are like ‘I don’t want to pay all of this money, so I don’t want to pay any of this money,’” said Mirante.

And even before the question is put to voters, lawmakers will have to negotiate what goes on which ballot in the first place. Unlike the other initiatives, constitutional amendments and referenda that will already crowd the 2024 ballot, bond measures can only be put before voters with a vote by the Legislature and approval of the governor.

“There is only so much capacity that the state has for debt,” said Ray Pearl, executive director of the California Housing Consortium, which lobbies for more affordable housing construction in the Legislature. “And politically, for the governor and the Legislature, there’s only so much they are willing to take on.”

Lawmakers may not have long to hammer out those negotiations. Any bonds bound for the March ballot need to clear the Legislature by the end of the session on Sept. 14. Branch-on-branch negotiations have been slow to get going so far, but may ramp up once the lawmakers return from recess on Aug. 14.

“We want to make sure that we’re presenting a ballot to the electorate, in as much as we have the ability to, that is thoughtful and aims to tackle some of our tougher challenges, but in a way that doesn’t confuse voters with, like, ‘Here are your ten opportunities to vote for housing,’” said Wicks. “I anticipate over the next probably two or three months that we’ll start landing some of these planes.”

Not everyone in housing world is so concerned. The mere fact that so many housing-related bond measures are vying for space on next year’s primary and general election ballots is a sign that the state’s affordability crisis is finally getting the political and fiscal attention it deserves, said Kate Hartley, who directs the Bay Area Housing Finance Authority.

“I don’t know what voters will think about” a glut of bond measures next year, she said. “But I do know that voters really care about this and they want solutions.”

‘You name it, there’s a bond’

Some of the most competitive real estate in California these days is a spot on either of the two 2024 ballots.

The Legislature is considering as many as ten borrowing measures for either the March primary or November general election next year. Among them are competing school bonds, climate and flood protection proposals and a bond aimed at fighting the fentanyl crisis. Though it isn’t likely that all will make the cut, taken together, they come with a collective debt of at least $80 billion, with the price tag on one proposal still undetermined.

“We have so many crises for people facing so many different challenges,” said Chris Martin, policy director with Housing California, an affordable housing advocacy group. “You name it, there’s a bond for it being considered in the Legislature and there’s only so much bonding authority.”

The Newsom administration has reportedly set the borrowing limit for both of next year’s ballots at $26 billion, but the final number is likely to be ironed out in negotiations with legislative leaders.

Whatever the borrowing cap, it’s as much a question of political arithmetic as it is budget math. There is no legal limit on how much debt voters can approve in a given election. Budget analysts keep their eye on different metrics comparing the state’s debt payments to its discretionary cash cushion, its overall budget or the total size of the California economy. Projections of future interest rates and future budget surpluses and deficits also get considered.

One measure — the ratio of the state’s annual debt payments to the budget’s discretionary “general” fund — currently sits at roughly 3.5%, depending on how you measure it. That’s a tad high compared to other large states, but it’s far lower than it has been in the past. Keeping that figure below 6% is “generally considered prudent,” said H.D. Palmer, a spokesperson for the California Department of Finance.

There’s no evidence that voters have any of that in mind when they vote “yes” or “no.”

Californians have generally been perfectly happy to put big projects on the state’s credit card. That may be because bond proceeds are typically directed at politically sympathetic causes and the downsides of borrowing — higher debt payments in future years — are more abstract for the average voter.

Since 1980, the electorate has signed off on more than 75% of all state bonds put before them, approving $182 billion in new debt and rejecting only $42 billion. In contrast, voters have approved only about 40% of all non-fiscal propositions.

The prospect of ‘bond fatigue’

There are clear exceptions. Sometimes the voting public, presented with particularly eye-popping sums, gets into a tight-fisted mood.

The November 1990 election was the most bond-happy in recent history, with 14 borrowing proposals in total. Voters batted down 12 of them.

A more recent example of bond failure: The March primary election in 2020, when voters rejected what would have been the largest school bond in California history, a $15 billion IOU. One of the possible post-election explanations offered at the time: Voters, saddled with a bumper crop of borrowing measures at the local level, succumbed to “bond fatigue.”

Now, with 2024 approaching, some housing advocates worry the electorate is susceptible to the same condition.

As a matter of fiscal reality, the two major housing proposals — the affordable housing measure and the Newsom-backed mental health bond — are dipping from the same pool of fiscal overhead and electorate will.

But as policies — one that supports the construction of more housing and the other that boosts behavioral health treatment capacity for people living on the street — they could very well complement one another. According to the governor’s office, his mental health bond would allow for the shelter and treatment of 10,000 more unhoused Californians. As negotiations kick into gear, some proponents of both measures are hoping the governor and legislative leaders will see things that way.

“If you have temporary shelter beds and services for an individual suffering from mental health or substance abuse disorder but no affordable housing, that person is likely going to return to homelessness,” said Alex Visotzky, senior California policy fellow at the National Alliance to End Homelessness, which supports the affordable housing bond and is still reviewing the mental health-related proposal. “Conversely if you have affordable housing, but no services available, then that individual is going to struggle to maintain their housing.”

“We feel the Legislature has a real opportunity to connect the two,” he said.

A race against the clock

Politically, California voter frustration with unaffordable housing and homelessness could cut one of two ways.

Voters who believe public dollars are poorly spent may not welcome proposals to throw more money at the problem.

Earlier this year, lawmakers directed the state auditor’s office to dig into how the state’s homelessness funds are actually being spent. A 2020 audit from the same office called for an “overhaul” of California’s “cumbersome” affordable housing funding process, after the state allowed $2.7 billion in bonds to expire untapped. (The state application process has since been streamlined.)

But many housing developers hope it will translate into the popular political will to ratchet up the spending. In fact, they’re counting on it.

Of the roughly 2.5 million units the state Housing and Community Development department says California communities need to build over the next eight years to make up for years of under-building, roughly 1 million must be set aside for people earning less than 80% of the median income in their region.

But that planned-for boom in affordable housing won’t materialize without some extra help, said Heather Hood, who manages the northern California market for Enterprise Community Partners, a nonprofit that funds, consults and advocates for affordable housing.

“The state’s been, on one hand, very clear about what the ambitions and goals are,” she said. “And yet (it) hasn’t supplied the resources to enable that to happen.”

It’s unclear how many additional units $10 billion in extra state funding could bring online. The cost per-unit of affordable housing climbs year after year, occasionally exceeding $1 million. By that math, the eye-popping face value on the bond would only be enough to fund 10,000 new units. But state funding is almost always used to supplement private, federal and local sources of cash.

“Housing isn’t completely paid for by public dollars,” said Hood. “Having this kind of security in the public realm means that there’s more security in the private realm and so it smooths the pipeline.”

The last time the state turned to the voters to fund affordable housing construction was in November 2018. Voters overwhelmingly approved Proposition 1, giving the state the go-ahead to borrow $4 billion. Of that, about half went toward the construction, rehabilitation and preservation of income-restricted rental housing. The remainder was meant to be split between programs that promote homeownership, the construction of farmworker housing and other housing-related infrastructure projects.

The timing of Wicks affordable housing bond next year is also no coincidence. With a little over $656 million remaining, that Prop. 1 funding is expected to run dry by next year

But even if voters are feeling generous next year and sign off on each of the housing bonds on the ballot, Wicks said she is only just getting started.

“We have to have significant ongoing investments for a serious amount of time in order to crawl out of where we are right now,” she said. That could mean putting yet more bond measures on the ballot or dedicating more money from the state budget on an ongoing basis. “That’s something that I want to work on next year. And probably the year after that.”

Ben Christopher is a reporter with CalMatters.