Your guide to Proposition 1: Borrowing money for low-income and veteran housing

By one measure, California is short nearly 1.4 million homes for people earning very low incomes. At the same time, middle-income families also struggle to afford housing in the state, where single-family homes sold for a median price of $887,680 in July.

In response, lawmakers are asking voters to let the state borrow $11.25 billion through the sale of bonds to build and maintain housing that low- and middle-income residents can afford.

It’s called Proposition 1, or the Veterans and Affordable Housing Bond Act of 2026.

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Oct. 1, 2026

The largest chunk of this money — $7.2 billion — would be doled out as loans to builders who agree to rent some of the homes to low-income families; in Los Angeles County, a family of four earning about $133,000 a year qualifies as low-income.

Researchers recently found that the construction of nearly 40,000 low-income homes was in limbo because of a lack of funding.

The second-largest portion of these funds — $1.25 billion — would be set aside for housing for veterans, in the form of homeownership loans. Voters last approved this type of statewide bond for veteran home loans in 2018.

According to the Legislative Analyst’s Office, the remaining dollars would be spread across several other initiatives and could subsidize up to 40,000 rental apartments, 2,500 homes for farmworkers and 1,200 beds for university students:

• $1.1 billion to help low- and middle-income families buy homes through direct loans and funds to nonprofits
• $500 million for infrastructure related to new housing, such as road and water repairs
• $450 million in loans or grants to build or upkeep affordable housing for farmworkers
• $350 million to build affordable housing for students, split evenly among the University of California and California State University
• $200 million available for tribal members to use to build or repair housing
• $200 million available to city and county governments and other entities hoping to pilot programs to build low-cost housing

Fundraising data will be updated regularly until the election.

When lawmakers voted to put this funding on the ballot this year, the votes were split almost entirely among party lines, with state Democrats in support.

“Through this historic bond, we’re giving voters the opportunity to help more Californians achieve homeownership, expand access to affordable housing, and give more families a real shot at the California Dream,” Gov. Gavin Newsom said about the proposition in June.

The bill to put this item on the ballot also was widely supported by organizations that provide low-income housing, plus various municipal governments, including San Diego, Orange and Santa Barbara counties.

Republicans, who represented all of the votes against Proposition 1, said on the legislative floor that the state instead should curtail building regulations to bring down the cost of housing without burdening taxpayers.

“We know the cost of building in California is extraordinarily, exponentially higher than it needs to be,” said Assemblymember Carl DeMaio, a Republican who represents cities and towns just east of San Diego. “We need reforms first before we take out the credit card and borrow money.”

The bill to fund these programs initially was introduced in the Legislature last year. Lawmakers noted that the state housing department has estimated that builders will need to construct 2.5 million new homes by 2031 to keep up with demand, and that a little less than half of these homes need to be affordable to low-income families.