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Analysis of Potential Economic Impacts from Proposition 5

Proposition 5 would provide an easier path for residents to approve GO bonds that fund infrastructure and housing investments critical to advancing local needs and priorities by reducing the two-thirds voter approval requirement to 55 percent. Economic & Planning Systems (EPS) quantified the net economic gains arising from a hypothetical $100 million GO bond measure approved under the provisions of Proposition 5, and found the likely benefits to be as follows:

● Production of 1,500 to 4,600 affordable and moderately priced housing units, depending on targeted affordability levels and location, by leveraging State and federal programs and/or private investment. 

● A reduction in the average cost per housing unit produced by roughly $40,000 for 2,500 new units if used by communities to defray the costs of public infrastructure necessary to develop new housing

● A reduction of $6,000 to $14,000 in annual housing costs per household, resulting from lower rents, freeing up discretionary spending for those residents on other economic activities. 

● The creation of 11,300 to 30,500 one-time jobs in residential construction and from economic ripple effects across a wide range of other sectors. 

● The creation of additional housing opportunities in job rich, labor constrained locations which will enable on-going economic growth in these communities, including:

o 2,140 to 17,600 permanent jobs

o $241 million to $2.0 billion in economic output

o $138 million to $1.2 billion in value added (i.e., gross domestic product)

o $91 million to $760 million in labor income

● A net benefit from reduced greenhouse gas emissions and vehicle miles travelled of $2.5 million to $20.2 million per year.