What is Proposition 5?
California Proposition 5 (Prop. 5) was a proposed amendment to the state's constitution to lower the supermajority requirement from two-thirds (66.67%) to 55% for all local bond measures to fund affordable housing, supportive housing, and public infrastructure. It appeared in the November 2024 General Election.
These local bond measures reference:
Public service infrastructure, such as “education, police, fire protection, parks, recreation, open space, emergency medical, public health, libraries, flood protection, streets or highways, public transit, railroad, airports, and seaports.”
Projects for natural disaster recovery and seal level rise.
Utility, common carrier, or similar projects, including those related to energy, communications, water, and wastewater facilities or infrastructure.
Equipment used for fire suppressions, emergency response, police, or sheriff personnel.
You can see the complete list in the bill's text.
Essentially, Prop. 5 makes it easier for local communities to pass these local bond measures by lowering the current two-thirds majority vote to 55%.
Additionally, the proposition required local governments to conduct annual financial and performance audits to ensure the proper use of bonds. Citizen-based oversight committees would also be appointed to supervise spending.
Historical Context
Proposition 5’s goal was to amend Proposition 13, a 1978 California Constitutional amendment that tied property taxes to the property’s fair market value when it was purchased. Proposition 13 has other impacts as well, such as:
It limits a property owner’s general levy tax to 1% of the assessed value. For instance, a home assessed at $500,000 would owe $5,000 in property taxes.
Low property tax rates encourage homeowners to hold onto their properties instead of selling them, reducing the amount of property taxes local governments receive and making them more dependent on state funding.
Prop. 5 is similar to Proposition 39 in 2000, which lowered the voter threshold for school bonds from two-thirds to 55%. However, instead of schools, Prop. 5 focuses on housing and infrastructure.
Since Proposition 39’s passing, Californians have voted on nearly 1,150 local school bond measures and approved 911 of them—nearly 80%.
Passed or Failed:
Proposition 5 failed by a vote of 55% against vs 45% for. It needed a supermajority vote of 66.67% to pass.
Arguments For and Against Prop. 5
Arguments For
Shift from state to local: Many proponents of Proposition 5 argued that it would shift spending away from state government and give local voters and taxpayers more of a choice to address housing affordability and improved infrastructure.
More efficiency: Others argued that Prop. 5 would empower local communities to pass much-needed local bonds to affordable housing, hospitals, and first responders more quickly.
Increased guardrails: Additionally, Prop. 5 ensures more guardrails with increased transparency, accountability, auditing, and citizen oversight compared to current state laws and funding.
Arguments Against
Heighten the financial burden: Opponents argued that Prop. 5 would increase bond debt and local property taxes. It would also shift the financial burden from state to local communities and increase costs to homeowners and renters in already expensive areas.
Unclear language: Moreover, many opponents argued that the state’s definition of affordable housing and infrastructure is vague, so voters couldn’t fully understand its impact on their communities.
Difficulty tracking tax changes: Lastly, the amendment allowed multiple bonds to be passed more easily, making it difficult for citizens to track and thoroughly understand how their property taxes are being spent.
Actual Impact
Proposition 5's failure to pass generally lowers property taxes because local governments must meet a higher threshold to pass local bonds that affect affordable housing and infrastructure.
That said, not passing the proposition does make it more difficult for cities and counties to fund infrastructure and affordable housing gaps, which can negatively impact already struggling communities.
How Ownwell Can Help
What’s most important is for homeowners and property owners to continue to be vigilant and aware of local bonds and measures that affect their property taxes. For instance, Los Angeles County had 45 property tax-related measures in the November 2024 election.
At Ownwell, our mission is to make the cost of real estate clearer and more equitable. Hopefully, this article has helped you achieve that.
We’re also very aware of the burden property taxes impose on homeowners and businesses. If you own property in California, you don’t have to accept your property value and tax bill as final!
Ownwell can protest your property taxes, potentially reducing your annual financial burden. On average, the save homeowners $1,148 each year in property taxes!
See how much Ownwell can reduce your property taxes!
