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Smart Voter
Los Angeles County, CA November 7, 2006 Election
Measure H
Affordable Housing General Obligation Bonds
City of Los Angeles

Bond Measure - 2/3 Majority Approval Required

Fail: 407,375 / 62.86% Yes votes ...... 240,703 / 37.14% No votes

See Also: Index of all Measures

Information shown below: Summary | Fiscal Impact | Impartial Analysis | Arguments | Tax Rate Statement | Full Text

To provide safe, clean affordable housing for the homeless and those in danger of becoming homeless, such as battered women and their children, veterans, seniors and the disabled; assist first time homebuyers; provide low income working families safe and affordable rental housing; shall the City of Los Angeles issue $1,000,000,000 of bonds, with independent citizen oversight, mandatory annual financial audits, and prosecution for criminal misuse of funds?

Summary:
Title

Affordable Housing General Obligation Bonds
City of Los Angeles Proposition H

The Issue

To provide safe, clean affordable housing for the homeless and those in danger of becoming homeless, such as battered women and their children, veterans, seniors and the disabled; assist first time homebuyers; provide low income working families safe and affordable housing; shall the City of Los Angeles issue $1,000,000,000 of bonds, with independent citizen oversight, mandatory annual financial audits, and prosecution for criminal misuse of funds?

The Situation

Affordable housing is scarce in Los Angeles.

More than 88% of City residents cannot afford to buy a median-priced home. Today, a family needs to earn more than $100,000 to buy such a home in the City. People such as teachers, construction workers, and nurses do not earn enough to buy a home in the City.

Rental housing is unaffordable by Federal standards if a family spends more than 30% of its income on rent. Almost half of City renters spend more than 41% of their income on rent.

50,000 homeless people and families live in the City.

The Proposal

The City would issue $1,000,000,000 of bonds to provide about 10,000 new homes and rental units over ten years. These funds would be placed in the Affordable Housing Trust Fund to be used as follows:

  • $250,000,000 to help working families buy their first home
  • $350,000,000 to build rental housing affordable to low-income working families
  • $250,000,000 to build housing for homeless people
  • $150,000,000 to be allocated for rental or homeless housing based on future needs.

These bond funds would attract additional investment from Federal, State, and private sources.

A citizen’s committee and an administrative oversight committee would monitor how funds are spent and would receive an annual independent audit.

A Yes Vote Means

You want to issue $1,000,000,000 of bonds to build affordable housing.

A No Vote Means

You do not want to issue $1,000,000,000 of bonds to build affordable housing.

Fiscal Impact from City Administrative Office William T. Fujioka:
This measure authorizes the City to issue up to $1 billion in general obligation bonds to fund the acquisition, construction, rehabilitation, development and financing of safe, clean affordable housing for the homeless and those in danger of becoming homeless, such as battered women and their children, veterans, seniors and the disabled; of housing to assist first-time homebuyers; of safe and affordable rental housing for low-income working families; and of affordable rental housing through loans to private and nonprofit entities. General Obligation bonds permit the City to borrow funds at the lowest possible interest rate. The debt service will be paid from additional property tax revenues based upon the assessed value of all taxable property within the City.

The issuance of the bonds will result in average annual debt service payments of approximately $58 million for 30 years. This results in the owner of a home with an assessed value of $500,000 having an average annual tax of $73 for 30 years. The issuance of these bonds will not cause the City’s debt service payments to exceed 15% of General Fund revenues, as established in the City’s Financial Policies. Debt service payments will increase from 5.30% to 9.35% of General Fund revenues in the year in which debt service is the highest for this bond program.

Impartial Analysis from Chief Legislative Analyst Gerry F. Miller
This proposal would authorize the City to issue general obligation bonds in the amount of $1 billion for the acquisition, construction, rehabilitation, development and financing of safe, clean, affordable housing for the homeless and those in danger of becoming homeless, such as battered women and their children, veterans, seniors and the disabled; to assist first-time homebuyers; to provide low-income working families safe and affordable rental housing; and to make loans to private and nonprofit entities to develop affordable rental housing.

Bond proceeds would be deposited into the City’s Affordable Housing Trust Fund and administered by the Los Angeles Housing Department with oversight from a Citizen Advisory Oversight and Accountability Committee (CAOAC) and an Administrative Oversight Committee (AOC). Bond funds would be used only for the stated purposes, and funding commitments would be approved by the City Council and Mayor.

This measure would require the Housing Department, every two years, to develop a work program, which must be approved by the CAOAC, AOC, City Council and Mayor. The work program shall establish the priorities and guidelines for use of the bond proceeds and will take into account conditions of the housing market and areas of greatest need for affordable housing. The first two-year work program must be approved by June 30, 2007.

Funds will be spent as follows:

A. A minimum of $250 million for affordable rental housing for extremely-low income individuals and households, including the formerly homeless, ranging in income from 0% to 30% of the Area Median Income (AMI);

B. A minimum of $350 million for affordable rental housing for individuals and households, ranging from 30% to 80% of the AMI, with not less than $250 million for affordable rental housing for individuals and households between 30% and 60% of the AMI;

C. $250 million to help individuals and households at or below 150% of the AMI to buy their first homes, with $37.5 million to assist individuals and households at or below 80% of the AMI, if feasible;

D. Remaining funds are to be allocated to Programs A and B above in accordance with the two-year work programs.

Priorities for spending bond funds will include serving those most in need of affordable housing, smart growth and transit-oriented development, leveraging of funds from other, non-City sources, such as the federal and State governments, increasing the overall supply of affordable housing, and stabilization of neighborhoods.

This measure would prohibit the use of bond proceeds for eminent domain over single-family homes or parks. Any criminal misuse of the bond proceeds will be referred to the appropriate authorities for investigation and prosecution to the fullest extent possible under the law. Bond funds will not be used to replace funding currently allocated by the City for affordable housing, so long as these current funds remain available.

This measure will require that a financial audit be conducted each year by an independent auditor, which must be made available to the public. The City Administrative Officer will annually report on the status of the programs, funds collected and expended, and projects approved for funding.

The measure would become effective with a two-thirds vote.

  Official Information

L.A. City Election Division
Organizations in Favor

Homes ForLA Families
Organizations Opposed

MooreIsBetter.com
News and Analysis

Los Angeles Council Places $1 Billion Housing Bond on Ballot
(Steve Hymon, L.A. Times, 7/27/06; posted by Knowledgeplex.org)

Google News Search
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Arguments For Measure H Arguments Against Measure H
Los Angeles has the nation’s largest homeless population. Every night, over 40,000 homeless people and families including veterans and victims of domestic violence, sleep on the streets or in cars because there are beds for only 2,000.

The middle class is being forced from Los Angeles. Only 12% of our families can afford to purchase the average priced home. Only 35% of renters can afford the average apartment.

Many low-income families who work full time are forced to live in slums or overcrowded apartments and garages.

Businesses leave the community because there is no affordable housing for their workers.

It is time to do something about the housing crisis.

Proposition H will:

  • Expand housing opportunities for thousands of families who are homeless or in danger of becoming homeless;
  • Provide low- and moderate-income families with financing assistance to become first-time homeowners; and
  • Build secure, decent and affordable rental housing for low income working families, seniors and the disabled.

We all benefit from Proposition H.

Business and economic leaders agree that investing in affordable housing is one of the best ways to create new jobs and improve our local economy.

“Secure housing and homeownership strengthens neighborhoods and improves public safety,” Police Chief William Bratton

Proposition H is a good deal for local taxpayers.

Every local $1 will be matched with up to $5 in state, federal and private investment.

Proposition H prohibits the use of funds to destroy parkland or single-family homes.

Proposition H requires tough independent citizens’ oversight with public audits and the law requires criminal penalties for fraud and the misuse of public funds.

That’s why one of the largest bipartisan coalitions of community leaders in Los Angeles history urges you to vote YES on Proposition H.

For more information: http://www.HomesforLAfamilies.org

ERIN RANK
President/CEO,
Habitat for Humanity
of Greater Los Angeles

PAT McOSKER President,
United Firefighters of
Los Angeles City

ROBERT ERLENBUSCH
Executive Director,
Coalition to
End Hunger & Homelessness

MARY LESLIE
President,
Los Angeles Business Council

DAVID FLEMING
San Fernando Valley
Economic Alliance

ANTONIO R. VILLARAIGOSA
Mayor,
City of Los Angeles

ERIC GARCETTI
President,
Los Angeles City Council

WENDY GREUEL
Chair, Los Angeles
City Council
Transportation Committee

HERB J. WESSON, JR.
Chair, Los Angeles
City Council Housing,
Community & Economic
Development Committee

REV. CECIL L. MURRAY
Retired Minister

Rebuttal to Arguments For
Proposition H taxes all property owners regardless of income.

The bond increases the property taxes of homeowners for 20 years, regardless of their income, making housing less affordable for everyone who has already worked hard to buy a home.

The bond gives millions to the well-off.

Unlike normal housing programs, which help only the poor, Section C of Proposition H makes available millions of taxpayer dollars to upper income people.

Don't be fooled by the bond proponents' talk about the homeless. This bond increases your taxes and constitutes "welfare for the rich."

The bond is unnecessary.

The city is taking in $717 million more this year than last. That money should be used to pay for housing programs for the truly needy -- instead of forcing homeowners to repay a billion-dollar loan, plus another billion in interest.

For more reasons to vote NO on Proposition H visit: http://www.MooreIsBetter.com/VoteNo.htm

JON COUPAL
President, Howard Jarvis Taxpayers Association

RICHARD CLOSE
President, Sherman Oaks Homeowners Association

JOEL FOX
President, Small Business Action Committee

ERNEST DYNDA
President, United Organizations of Taxpayers, Inc.

WALTER MOORE
Real Estate Broker

To build more "affordable" housing, city politicians will make it more expensive to own a home in Los Angeles.

If Measure H passes, homeowners' tax bills will go up to subsidize those who, in some cases, have not yet arrived in Los Angeles.

Homeowners are already paying higher taxes for four Los Angeles Unified School District bonds, two Los Angeles Community College District bonds, bonds for police facilities and the zoo, several assessments for parks, one of the highest utility user taxes in the state, and a parcel tax that county officials promised would maintain trauma centers. In addition to the local property tax, some homeowners already are already paying an extra $1000 a year, or more, to meet these obligations. And they are about to see a 154% increase in their city trash bills.

As if taxpayers don't have enough to worry about, look at your ballot. Voters are being asked to approve over $41 billion in state bonds, including Proposition 1C, a $2.8 billion state bond for housing - that's right, another housing bond. And there are billions more in potential taxes, including Proposition 88 a new statewide property parcel tax.

The purpose of the Measure H bond is to fund a social welfare program. Homeowners and other property owners should not have their taxes increased for social welfare. If needed, the funds should come from all taxpayers. Programs like this should be paid from state and federal funds and grants, not city money. Local taxes are for police fire, sanitation and other local services, not for subsidized housing for some who may not yet live in Los Angeles.

The city has a budget of $6 billion a year. We are already paying more than enough.

Vote no on Measure H.

JON COUPAL
President, Howard Jarvis Taxpayers Association

RICHARD CLOSE
President, Sherman Oaks Homeowners Association

JOEL FOX
President, Small Business Action Committee

ERNEST DYNDA
President, United Organizations of Taxpayers, Inc.

WALTER MOORE
Real Estate Broker

Rebuttal to Arguments Against
Proposition H is a great deal for Los Angeles property owners.

Proposition H will cost the average homeowner less than $50 a year, only about $4 a month.

Every dollar of local money can be matched with as much as $4 or $5 in state and federal funds to create desperately needed affordable housing. If we do not pass Proposition H, those state and federal dollars will be spent in other communities.

Proposition H will address our city’s terrible homeless crisis and help thousands of families get off the street and into safe housing.

Proposition H will assist low and moderate income first time home buyers and revitalize our neighborhoods.

Proposition H will provide quality affordable rental housing.

And Proposition H contains tough independent audits and full public accountability.

That’s why one of the broadest coalitions in Los Angeles history says vote Yes on Proposition H.

MARIA ELENA DURAZO
Executive Secretary Treasurer
Los Angeles County
Federation of Labor

MAYNARD W. BROWN
Junior Achievement
Teacher of the Year 2006

MARLENE SAVAGE
Westside Community Leader

JAY H. GOLDBERG
Valley Community Leader

WILLIAM J. BRATTON
Chief of Police

ERIC GARCETTI
President,
Los Angeles City Council

JAN PERRY
Assistant President
Pro Tempore,
Los Angeles City Council

ED P. REYES Councilmember,
1st District

BILL ROSENDAHL
Councilmember,
11th District

VIVIAN G. RAMIREZ
Executive Director,
L.A. Family Housing

Tax Rate Statement from City Administrative Office William T. Fujioka
The bonds will be issued in equal increments over 10 years. It is anticipated that the bonds will be issued in a series of $100,000,000 per year for 10 years.

In the first fiscal year after the first series of bonds has been issued, the estimated tax rate will be 0.12% per every $100 of assessed valuation. In the 11th year, the first fiscal year after the issuance of the last series of bonds and the year in which the tax rate will be the highest, the estimated tax rate will be 2.6% per every $100 of assessed valuation. In the 11th year, the year of highest debt service, a home with an assessed value of $500,000 will have a maximum annual tax of $129.

Over the life of the bonds, the average annual tax rate is 1.5% per every $100 of assessed valuation. A home with an assessed value of $500,000 will have an average annual tax of $73 for 30 years.

Full Text of Measure H
The general obligation bond proceeds shall be deposited into the Affordable Housing Trust Fund to be used only for the purposes of acquisition, construction, rehabilitation, development and financing of safe, clean affordable housing for the homeless, those in danger of becoming homeless, such as battered women and their children, veterans, seniors and the disabled, assisting first time homebuyers, and providing low income working families safe and affordable rental housing, and making loans to private and non-profit entities to develop affordable housing by the following programs:

A. $250,000,000 or more for affordable rental housing for extremely low income individuals and households, including the formerly homeless, ranging from zero income to 30% of Area Median Income (AMI), as established and revised by the U. S. Department of Housing and Urban Development.

B. $350,000,000 or more for affordable rental housing for individuals and households, ranging from 30% of AMI to 80% of AMI, with not less than $250,000,000 for affordable rental housing for individuals and households between 30% of AMI and 60% of AMI, with the remaining $100,000,000 for affordable rental housing for individuals and households between 60% and 80% of AMI.

C. $250,000,000 to help individuals and households at or below 150% of AMI to buy their first homes, of which $37,500,000, if feasible and an efficient use of funds, shall be for individuals and households at or below 80% of AMI.

Funds not committed above shall be allocated to programs A and B in accordance with the Two-Year Work Program policies and guidelines, as recommended by the Citizens Advisory Oversight and Accountability Committee and the Administrative Oversight Committee, subject to approval by the City Council and Mayor. The Two-Year Work Program shall also establish standards as to if and when bond proceeds should be re-allocated among the programs so that recommendations may be made to the City Council and Mayor for approval on re-allocating bond proceeds to programs A and B.

A Two-Year Work Program shall be developed by the Housing Department with recommendations and approval by the Citizens Advisory Oversight and Administrative Committee and the Administrative Oversight Committee, subject to approval by the City Council and Mayor. It shall establish priorities and guidelines for use of the bond proceeds. Priorities shall include, but not be limited to, serving those most in need of affordable housing, smart growth and transit oriented developments, leveraging of funds from non-City sources, increasing the overall supply of affordable housing, and stabilization of neighborhoods. The first Two-Year Work Program shall be approved by June 30, 2007 and be revised every two years.

Additional Provisions:

1. Bond proceeds shall be administered by the Housing Department with oversight from a Citizens Advisory Oversight and Accountability Committee and from an Administrative Oversight Committee, with funding commitments to be approved by the City Council and Mayor.

2. The Citizens Advisory Oversight and Accountability Committee shall be comprised of three members appointed by the Mayor and four members appointed by the President of the City Council.

3. The Administrative Oversight Committee shall be comprised of a member of the Mayor’s Office, the Chief Legislative Analyst, and the City Administrative Officer.

4. A financial audit shall be conducted each year by an independent auditor and be made available to the public. The City Administrative Officer shall annually report on the status of the programs, funds collected and expended and projects approved for funding.

5. Bond proceeds shall not be used for purposes of eminent domain over single-family homes or parkland.

6. Bond proceeds shall not be used to supplant funding for affordable housing from existing sources currently allocated by the City, including but not limited to the Community Development Block Grant program, the Home Investment Partnership Program (HOME) subject to the continued availability of these funds.

7. Any criminal misuse of the bond proceeds shall be referred to the appropriate authorities for investigation and prosecution to the fullest extent possible under the law.


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