SACRAMENTO, Calif. — California lawmakers and Gov. Gavin Newsom announced Monday an agreement to place an $11.25 billion affordable housing and homeownership bond before voters in November 2026, a proposal supporters say would represent one of the largest housing investments in state history and help address the state’s persistent housing affordability crisis.
The proposed Veterans and Affordable Housing Bond Act of 2026 would fund the construction, preservation and rehabilitation of affordable housing, expand homeownership opportunities, support veterans’ housing programs and provide resources for a range of state housing initiatives.
If approved by the Legislature and signed by the governor in the coming days, the measure will appear on the statewide ballot in November 2026.
The announcement comes as California continues to confront a severe housing shortage that state officials say has developed over decades of underproduction. According to a legislative analysis of Senate Bill 417, authored by Christopher Cabaldon, California needs approximately 2.5 million additional housing units, including 1.2 million units for lower-income households. The analysis estimates the state needs about 180,000 new homes annually to keep pace with demand but has produced fewer than 100,000 units per year over the last decade.
Supporters of the bond say the proposal is designed not only to increase housing production but also to preserve existing affordable housing and create pathways to homeownership for working families and veterans.
“The agreement reached today is the reflection of the hard work done in the Legislature to address and respond to the critical housing needs that Californians are facing across the state,” said Senate President Pro Tempore Monique Limón.
“The Legislature continues to prioritize access to housing in the Golden State for everyone,” Limón added. “Thank you to leaders in both the Senate and Assembly, as well as Speaker Rivas and Governor Newsom, for working together to deliver billions of dollars to support needed housing.”
According to legislative leaders, the proposal would direct $5.1 billion to the state’s Multifamily Housing Program, California’s primary affordable housing development program. Projects receiving funding would be required to reserve at least 10 percent of units for extremely low-income households.
The bond would also invest $1.25 billion in the CalVet Home Loan Program, which provides low-cost mortgages to veterans and military families.
Newsom described the agreement as part of a broader effort to reverse decades of housing underproduction and increase opportunities for Californians seeking stable housing.
“Today’s agreement builds on our work with the Legislature to expand opportunity and make homeownership and affordable housing more attainable for Californians,” Newsom said.
“For far too long, our state failed to build enough housing to meet the needs of growing families and communities,” he continued. “We’re once again turning the page on decades of inaction and making bold investments needed to tackle one of our state’s greatest challenges.”
Newsom said the state’s long-term economic future depends on whether residents can afford to remain in California.
“California’s future depends on whether people can afford to put down roots, raise a family, and build a life here,” Newsom said. “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.”
The governor’s remarks reflect a growing consensus among state leaders that housing affordability has become one of California’s defining policy challenges. State housing officials and advocates have repeatedly linked the housing shortage to rising homelessness, increasing rents and declining homeownership rates among younger Californians.
According to the legislative analysis of SB 417, more than 2 million extremely low-income and very low-income renter households currently compete for roughly 750,000 affordable rental units statewide. The analysis further notes that more than three-quarters of extremely low-income households spend more than half their income on housing costs.
Assembly Speaker Robert Rivas said the bond proposal builds upon recent legislative efforts to accelerate housing construction and reduce barriers to development.
“California has been building toward this moment,” Rivas said. “We’ve cut red tape, fast-tracked construction, protected renters.”
“And now, we’re going bigger: $11.25 billion for affordable housing to expand homeownership for veterans and working families, drive down costs and prove that the door to opportunity is open to everyone,” Rivas continued. “This is California delivering.”
The proposal expands on SB 417, which originally authorized a $10 billion affordable housing bond. According to the Assembly Floor Analysis, the legislation would provide billions of dollars for affordable multifamily housing, supportive housing for individuals experiencing homelessness, tribal housing initiatives, farmworker housing programs, homeownership assistance and preservation of existing affordable housing developments.
The measure also seeks to capitalize on recent federal changes that housing advocates say could significantly increase affordable housing production if California provides sufficient matching funds. Legislative analysts noted that federal financing changes enacted in 2025 may allow affordable housing developers to leverage substantially more federal tax credits and bond financing than previously possible.
Cabaldon, whose district includes Yolo County, said the proposal would have broad impacts across multiple housing sectors.
“With one vote, California will build tens of thousands of new homes, prevent existing affordable housing from disappearing, and help Californians who need a hand to buy a home or partner with organizations like Habitat for Humanity,” Cabaldon said.
“The legislation builds rooftops for homeless and foster youth, students, and farmworkers, and supports our veterans with the largest-ever investment in the CalVet home loan program,” he added.
Housing advocates have argued that preserving existing affordable housing is as important as constructing new units. The legislative analysis notes that many affordable housing developments financed decades ago face potential conversion to market-rate housing unless additional resources are made available to maintain affordability restrictions.
The bond proposal would also fund supportive housing developments that combine affordable housing with services for individuals experiencing homelessness or behavioral health challenges. State lawmakers have increasingly emphasized supportive housing as a key component of efforts to reduce chronic homelessness.
Assemblymember Buffy Wicks said lawmakers must match their stated priorities with financial commitments.
“We all know the stats in California—two thirds of lower-income renters are rent-burdened, 170,000 people are unsheltered, and we are 1.2 million units short of the affordable housing we need,” Wicks said.
“But what gets lost when we’re counting housing units and debating dollars and cents is that we’re really talking about families who need a roof over their heads,” she continued.
Wicks argued that the state can no longer delay major housing investments.
“Time and time again, we say that housing affordability and homelessness are top priorities, so it’s incumbent on us to put our money where our mouth is and invest in housing programs that have proven their ability to deliver real results,” Wicks said. “What we can’t afford is to wait.”
The legislative analysis estimates that the original $10 billion bond proposal would result in approximately $17.4 billion in total repayment costs over 30 years, including interest, with annual General Fund debt-service payments estimated at roughly $580 million when all bonds are sold. Actual costs would depend on future interest rates and the timing of bond issuances.
Supporters contend those costs are justified by the scale of California’s housing shortage and by the potential to leverage billions of dollars in additional federal and private investment.
The coalition supporting SB 417 argued in legislative filings that California has historically relied on voter-approved bonds to finance affordable housing construction and that funding authorized by the state’s 2018 housing bond has already been fully allocated. According to supporters, new state funding is necessary to take advantage of available federal housing resources and expand affordable housing production statewide.
The Legislature is expected to take final action on the measure in the coming days. If approved and signed into law, California voters will decide in November 2026 whether to authorize the $11.25 billion investment.
Supporters say the measure offers an opportunity to make a generational investment in affordable housing, homelessness prevention and homeownership at a time when housing costs continue to outpace incomes in many parts of the state.
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