California voters approved Proposition 12 five years ago, authorizing a $900-million bond issue to help military veterans buy homes and farms. But while the number of returning vets is still high, their interest in buying houses with state-backed low-cost mortgages isn't.
Last week, lawmakers passed a bill that would let voters amend Proposition 12 to shift two-thirds of the bonds — none of which has been issued — to building affordable apartments for veterans, with an emphasis on projects that align rental housing with services for the homeless. The change would impose new costs on the state, but supporters argue that the expense would be more than offset by the revenue and savings generated when homeless vets return to productive lives. Gov.
Leaders of the state's CalVet Home Loan program had sought the $900 million in bonds in 2008 because they worried that the expected influx of veterans from the wars in Iraq and Afghanistan would deplete their reserves. But although California continues to attract more veterans than any other state, the program granted only 112 loans last year, largely because vets could get conventional mortgages at equally low rates.
Meanwhile, the demand for affordable rental housing for vets, and especially for supportive permanent housing for homeless ones, remains high. By one estimate, more than 32,000 veterans are expected to become homeless at least temporarily in the next 21/2 years, and the supply of affordable housing is far too low to meet the demand. Developers say they can't build affordable housing projects without the government's help because the cost of land, labor and materials is too high, and there's a limited amount of that help available — none of it targeted specifically to veterans.
On Wednesday, lawmakers approved AB 639, a bill by Assembly Speaker John A. Pérez (D-Los Angeles) that would schedule a vote next June on a ballot measure to restructure Proposition 12. The new measure would cut the amount of bonds for CalVet loans to $300 million, while authorizing the state to issue $600 million in bonds for affordable, multifamily housing for vets. Unlike the bonds for the home loans, which are repaid entirely by the vets who take out mortgages, the ones for apartment projects would be financed by the state at an estimated cost of $25 million a year for 30 years.