Proposition 1: Behavioral Health Bond and Services Act on the March Ballot

To provide more help for the unhoused, the Governor has placed a ballot measure on the March election.  In Gavin Newsom’s mental health plan is going to voters. Here’s what you need to know by Kristen Hwang (Link) we learn that “California voters next spring will get to decide on a ballot measure to create housing and treatment options, especially for homeless individuals with serious mental illness. If it passes, the measure championed by Gov. Gavin Newsom would mark the first major overhaul of the state’s community mental health system in 20 years.”

Hwang says, “The two-pronged proposition on the March primary election ballot includes a nearly $6.4 billion bond to build 10,000 treatment units and supportive housing. It also asks voters to redefine how counties spend money collected from a special ‘millionaire’s tax’ to allocate a share of it for housing for people with behavioral health illnesses.”

Newsom and supporters have promoted Proposition 1 as a way to help address the state’s deteriorating homelessness and addiction crises. They contend increased investment and an update to the state’s Mental Health Services Act is ‘long overdue.’ The most significant change put forth by the governor is a requirement that counties invest 30% of their Mental Health Services Act tax dollars — roughly $1 billion based on last year’s revenue — in housing programs, including rental subsidies and navigation services. Counties would have to spend half this money on people who are chronically homeless or living in encampments. They could also use up to one quarter of the money to build or purchase housing units.

The second half of Newsom’s proposal places a $6.4 billion general obligation bond before voters to dramatically expand the state’s psychiatric and addiction treatment infrastructure.

The California Chamber of Commerce has endorsed Prop 1. “California employers are on the front lines of our state’s homelessness crisis and many have been challenged with safety issues for both their workers and customers,” said CalChamber President and CEO Jennifer Barrera. “Today, the CalChamber board voted to support Proposition 1 because it provides an effective and ambitious plan that addresses the three interrelated social crises of homelessness, untreated serious mental illness and drug abuse in California. Importantly, the measure includes accountability metrics that will ensure funds are spent in the most effective ways possible so that services that are foundational for treatment are successful.”

“If approved by voters, Proposition 1 will authorize $6.38 billion in general obligation bonds to finance, among other things, more treatment beds and supportive housing units for Californians with severe behavioral health challenges and substance use disorders. Specifics of the measure can be found here (chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.lao.ca.gov/ballot/2024/proposition-1.pdf?utm_campaign=Press%20Release&utm_medium=email&_hsmi=285782820&_hsenc=p2ANqtz-8fof2z3RGTJKSlmnLCMydGBbipKEBp-mswQyltiCgAWlLhO5WRRGOirYR58HtW7Zj-lryPFn-0cVYW5UwSIwZWS-gmnLGDj8tSFQd1orfx78szdmU&utm_content=285782820&utm_source=hs_email).”

“In addition to support from the business community, Prop. 1 has been endorsed by health care entities and cities.”

Other support for Prop 1 was found In the PPIC Statewide Survey: Californians and their Government, (December 2023

https://www.ppic.org/publication/ppic-statewide-survey-californians-and-their-government-december-2023/) where “two in three likely voters would vote yes on Proposition 1, which includes the Behavioral Health Bond and Services Act.”

“Six in ten Californians name economic conditions, homelessness, and housing as the three most important issues facing the people of California today.”

“A solid majority continues to view homelessness as a big problem in their part of California. Most are concerned about the presence of homeless people in their local community and see someone who is experiencing homelessness on a frequent basis. About two in ten say they have frequently interacted with homeless people or that they or someone in their close family has experienced homelessness or housing insecurity. Overwhelming majorities say that substance abuse (78%) and lack of affordable housing (70%) are major factors in homelessness in their local community. Majorities across parties favor policies to help people experiencing homelessness.”

“Californians name jobs, economy, and inflation, homelessness, and housing as the top state issues. Overwhelming majorities across the state’s major regions view housing affordability as a big problem in their part of California. About half say the cost of housing is a financial strain, and about half of lower-income adults and renters report that the cost of housing causes “a lot” of financial strain. Majorities of Californians across partisan and demographic groups and regions say the state needs more policies geared toward making both homebuying and rental housing more accessible.”

Given the housing crisis in California which contributes to the growth in homelessness, there is some good news for 2024.  In California’s Economy: Reasons For Optimism  (https://cbcal.com/californias-economy-reasons-optimism/), UCLA Anderson Forecast report “expects a continued recovery in the housing market, including consistent new homebuilding and a demand for housing. Real estate represents a large portion of California’s GDP. According to Statista, finance, insurance, real estate, and leasing (grouped together in this metric) were $477 billion in 2022, second only to professional and business services. 2023 has been a fairly unstable year for housing throughout the country.”

“In September, the California Association of Realtors (C.A.R.) released its 2024 Housing Market Forecast. Their predictions were guardedly optimistic, including the following:”

• Housing affordability (the percentage of households able to afford a home at the median price) will remain flat at 17%.
• The median home price will reach $860,300, a rise of 6.2%.
• Sale of existing single-family homes will increase to 327,100 units, a rise of 22.3% from 2023.
• Slower growth and declining inflation will reduce mortgage interest rates and help stimulate home sales in California.

These housing market forecasts are another reason to be cautiously optimistic about the overall strength of California’s economy in the coming years.