California's voters on election day gave the state's beleaguered housing market and the nation it's largest ever housing bond -- Proposition 46 -- a $2.1 billion measure that will largely create, but also preserve more than 160,000 affordable housing units throughout the Golden State.

Officially dubbed the "Housing and Emergency Shelter Trust Fund Act of 2002," the proposition passed with a majority vote -- 3,630,590 (57.5 percent) yes votes.

The new law offers a variety of housing from emergency shelters for battered women and housing for the homeless to affordable housing for working people and loan assistance for workers who help keep society running -- military veterans, teachers, police and firefighters.

Voters passed Proposition 46 not a day too soon.

Days after election day, the California Association of Realtors announced the Golden State's housing affordability index fell another five points in September to 28 percent -- fewer than one in three Californian households can afford to purchase a median-priced home in California. Nationwide, more than one in two households can afford the median priced home.

California also has a housing shortfall of crisis proportions. To help keep down the cost of housing California needs more than 200,000 housing units of all kinds per year through 2002. In 2001, fewer than 150,000 housing permits were issued, according to the state's Department of Housing and Community Development. The state added only one housing unit per four new jobs created from 1994 to 2001, when a 1.5-to-1 jobs-to-housing ratio is recommended by housing policy experts.

Millions voted against measure

The housing-jobs imbalance underscores a point in the argument against Proposition 46. The newly approved measure provides limited benefits to first time home buyers and does nothing directly to remove bureaucratic and regulatory barriers to affordable housing, according to the Howard Jarvis Taxpayers Association.

The proposition does, however, provide down payment assistance to 60,000 home buyers and, according to numerous studies, down payment funds are a primary stumbling block to home ownership.

While the measure does not directly raise taxes, the association also argued the housing measure and other bond issues could ultimately cost the state's taxpayers and 2,688,600 (42.5 percent) voters who voted against the proposition apparently agreed.

"This bond has a $2.1 billion face value. It will cost you at least $3.5 billion to pay it off. Of this $2.1 billion, only $290 million, about 15 percent, is put into the "Self-Help" fund that is supposed to help low-income, first-time home buyers with down payments, supposedly a major selling point for this bond. The very small piece of this bond that is supposed to help you buy a house has so many strings that you will probably never qualify," the association argued.

Most voting Californians, however, didn't buy those arguments but were swayed by the proposition's potential to ease California's housing crisis -- especially for those who need help most.

With many of the programs to be funded by the the bond issue already in place and ready for expansion, the measure is immediately effective, pending administrative preliminaries.

"It means as soon as it's legal to expand -- 40 to 60 days -- certifications can begin offering funds for people to apply as early as January," said Judy Nevis, chief deputy director of California's Department of Housing and Community Development, the agency changed with administering the bond funds and many of the programs.

Proposition 46 details

With the endorsements of AARP, the California Chamber of Commerce, the League of Women Voters of California, Habitat For Humanity, and groups representing battered women, nurses, firefighters and others, the proposition proved unstoppable.

Proposition 46 allows California to fund 21 housing programs under four umbrella allocations over a three to five year period.

The funds will provide annual subsidies for about 25,000 multifamily and 10,000 farm worker households, down payment assistance to about 60,000 home buyers and space for 30,000 homeless shelter beds.

The umbrella allocations are