Local housing, planning and domestic-violence service leaders say they hope state voters this fall approve Proposition 1C, a $2.85 billion infrastructure bond that would put some money into building affordable housing, emergency shelters and smart-growth development.

Supporters of the bond may get their wish. An August survey taken by the San Francisco-based Public Policy Institute of California reported that 57 percent of respondents supported the ballot measure, more than the simple majority needed to approve the bond.

Despite that, there are still many questions about how Prop. 1C will fare in the Nov. 7 election.

Gov. Arnold Schwarzenegger has reportedly shown tepid support of the measure. State Republicans have flatly opposed it, even though the proposition is part of Schwarzenegger's and the Legislature's $42.7 billion infrastructure bond package.

Taxpayer groups say it would be irresponsible to add more state debt. And even the poll done by the policy institute -- whose board includes several development, architectural and land-use industry leaders -- suggested Prop. 1C could be shot down because voters think the overall $42.7 billion infrastructure package is just too expensive.

Housing, shelter … parks?

Although Prop. 1C is called the "Housing and Emergency Shelter Trust Fund Act of 2006," a large portion the $2.85 billion measure -- $1.05 billion -- would not be spent on housing or shelters, but on housing-related facilities and projects: parks, sewage, water and transportation, according to the nonpartisan Legislative Analysts Office.

Tom Scott, executive director of the San Diego Housing Federation, a partnership of builders and developers that support Prop. 1C, said the housing-related money is badly needed because cities and counties have spent little on such housing-related matters since Proposition 13 capped property taxes in 1978. However, Scott also said that Prop. 1C is something of an extension of a similar housing and emergency shelter measure, the $2.1 billion Proposition 46, which was approved by state voters in 2002.

Aside from the $1.05 billion it would spend on parks, sewage, water and transportation Prop. 1C would also generate:

• $300 million to be spent in grants to cities, counties and developers to encourage "smart growth" -- which refers to development techniques that "clusters" houses, stores and jobs next to one another, and puts new growth in existing urbanized areas and transportation nodes rather than sprawling farther out into rural areas.

• $625 million to be spent on homeownership programs. That would include $290 million to supply loans for low-income home buyers; $200 million for low-interest home loans for first-time or moderate-income home buyers; and $125 million on grants to be awarded to organizations that help low and moderate income family build or renovate their homes.

• $590 million to be spent on multi-family housing programs. The figure includes $345 million for low-interest loans for low-income renters -- apartment housing that is considered "affordable housing." It would also include $195 million to be spent on support housing for people moving from emergency shelters or transitional housing, such as victims of domestic violence. This section would also spend $50 million on low-interest rate loans for programs that provide housing for homeless young people -- such as foster children who "age out" of foster homes when they turn 18.

• $285 million to be spent on other housing projects. This would include $50 million on grants to develop homeless shelters, and $135 million on low-interest loans and grants to build housing for farmworkers -- a program that critics argue would give aid to illegal immigrants.

Proposition not biggest

Prop. 1C is actually the runt of the massive infrastructure bond-measure litter at just $2.85 billion.

By contrast, Proposition 1B will ask voters to OK $19.9 billion in bond debt to pay for transportation projects. Proposition 1D will ask voters to approve $10.4 billion in bonds to pay to upgrade school buildings. And Proposition 1E will ask voters to approve $4.1 billion to pay for water and flood control projects. A related measure, Proposition 84, will ask voters to approve $5.4 billion in bonds to pay for more water and environmental programs.

The Legislative Analyst's Office, which prepares reports for all ballot measures, states that Prop. 1C would be paid back out of the state's general fund over the next 30 years, at the rate of roughly $204 million a year. That would amount to a total payment of $6.1 billion, including the $3.25 billion in interest.

Cheryl Keenan, executive director for San Diego Habitat for Humanity, the local arm of a national Christian group that helps build homes for the needy, signed the ballot argument supporting Prop. 1C.

Likewise, Cindy Grossman, president of the San Diego Domestic Violence Council, said their organization, and the statewide Partnership to End Domestic Violence were backing the measure.

"We're in favor," Grossman said. "What this bill does is allow for dollars to go toward shelters -- that also provides for homeless families with children, which, locally, is a huge need."

Prop. 1C was also supported by the San Diego Association of Governments, the county's regional transportation planning group. The group's board consists of representatives from the County of San Diego and the county's 18 cities.

Meanwhile, Tom Scott of the San Diego Housing Federation said that Prop. 1C would help local families buy or rent affordable homes.

"We've created over 2,000 new affordable homes and shelter beds, and more than 1,000 first-time homebuyers were able to get funds to help them buy homes," Scott said. "Those (Prop. 46) funds run out this year. This proposition, 1C, would extend that."

Bad borrowing

But some say that voters would be crazy to give the state permission to pile any more debt atop the $45 billion the state is already carrying.

The Legislative Analyst's Office reports that the state makes its yearly payments on all bond debt by taking cash out of its general fund -- and not by raising taxes.

But tax advocates point out that bond debt can easily result in tax increases. If state revenues decrease, the governor and Legislature would have less money to pay off the bond debt. That leaves only a couple of options to come up with the cash: cut programs and services, or raise taxes.

"Let's see," Richard Rider, chairman of the San Diego Tax Fighters Association said. "All told, there are $42.7 billion worth of bonds on the Nov. 7 ballot. And none of them raise taxes. The money just magically appears. The tooth fairy pays for it.

"State bonds promise something for nothing," Rider said, "which, of course, they don't deliver."

- Contact staff writer Gig Conaughton at (760) 739-6696 or gconaughton@nctimes.com.