California ballot measure recommendations, March 2024 – Yes on Prop 1

Proposition 1, the only measure on all California ballots this primary election, is primarily about how we prioritize our state resources to mental health and substance use, focusing on people who are homeless or are at risk of becoming so, and how we incorporate housing into the picture.

It does two things at once: first, raises a new bunch of capital to build both housing and treatment facilities ($6.4 billion dollars’ worth); and second, amends the Mental Health Services Act of 2004 to reallocate existing funding that comes from that law’s tax on millionaires.

I’ll address quickly the question I usually ask for measures: did this need to be on our ballots, or could the Legislature have done it on its own? It did need a vote for two reasons: (1) bonds require a statewide vote under the constitution; and (2) the MHSA was itself passed as a ballot measure which prevented the Legislature from refashioning it on its own.

As you’ll read in the voter guide, of the new money raised, $2 billion would go to build or renovate housing for use for the homeless (or near-homeless), while $4.4 billion would go to new mental health and substance use (let’s just say behavioral health) treatment facilities.

The housing would be primarily what’s called “permanent supportive housing” – not typical apartments but smaller ones designed specifically to bring people out of homelessness, with wraparound services. (About half of it needs to target homeless veterans, though the facilities should be able to bring in others if there’s room.)

The exact kinds of behavioral health treatment facilities build would mostly be up to the state and localities ($2.9b for doling out by the state, $1.5b by counties or cities), but the law lists possibilities as:

…short-term crisis stabilization, acute and subacute care, crisis residential, community-based mental health residential, substance use disorder residential, peer respite, community and outpatient behavioral health services, and other clinically enriched longer term treatment and rehabilitation options for persons with behavioral health disorders in the least restrictive and least costly setting.

So not just psychiatric hospitals, although those are allowed, but a wide range of treatment types. Focused on, to be frank, the kind that provide places for people to be off the street, but outpatient services are possible too.

That’s the capital spending. How does it amend the MHSA? 

If you were around in 2004, you may remember the MHSA as Prop 63. That measure was heavily focused on giving counties money to fund mental health services, so that, for example, it can’t treat people with a substance use disorder if they don’t also have a mental health disorder. It can be used for supportive housing, but doesn’t have to be, and most counties don’t.

While it was used as promised for more mental health care overall, there were a lot of hitches. It’s heavily volatile, being funded by an extra 1% tax on incomes over $1 million. That revenue floods in with booms and dries up with busts. (Think IPOs and people cashing in their stock options.) It’s very complex in that the MHSA wanted counties to provide new services of particular descriptions like “full-service partnerships”, but the requirements it imposed gave counties trouble spending the money. Over 58 counties, some engaged in shenanigans and spent the money dubiously. In 2018, the State Auditor found hundreds of millions had been left unspent, and the state imposed spend-down requirements. 

Prop 1 doesn’t solve that volatility. It reallocates MHSA so that at least 30% of it has to go to housing interventions for people at or at risk of homelessness, and the rest for a range of behavioral health interventions similar to what it was funding before. (It also allows the money to go to people with only substance use disorders.) Housing interventions could include paying someone’s rent for a time, or for renovations so they can stay in their home, or helping someone find housing, or other help in that vein.

Is this a good idea? Well, it won’t solve homelessness. At the core, homelessness is a housing problem: most interventions against homelessness are bound to be insufficient as long as they don’t address the problem that the rent is too damn high. In West Virginia, there’s a great deal of substance use disorder, but there’s little homelessness because housing is available for cheap or free. High housing costs mean that when people have problems in their lives, they don’t have the space to work on those problems, but are thrown out on the street where they spiral. High housing costs mean that for every person you lift out of homelessness, one or two more become newly homeless. 

(Imagine an editorial cartoon: a bunch of people are looking at a growing pool of water from a burst pipe, from which water is still pouring. One of them declares: “We need a bigger mop!” None of them are looking at the pipe.)

Another problematic factor is that we were promised in 2018 (and I passed along in this blog) that the No Place Like Home Act would fund 20,000 units of permanent supportive housing, and now six years later, it’s only produced 1,797 such units. The state estimates even when all the money is spent, it will have produced fewer than 8,000 units. NIMBYs hate, hate, hate this kind of housing being built anywhere near them, so they obstruct big-time. Even after overcoming NIMBYs, how we build permanent supportive housing is inefficient and subject to ever-higher construction costs. 

But if we could wave a wand to make studio apartments available to anyone anywhere for $500/month, such that the flow of people newly homeless reduced to a trickle—we would still have all our fellow human beings already in the extremely harmful and stressful state of homelessness who deserve our help. So Prop 1 does dedicate more to that needed aid, and to my mind is necessary overall.

Some mental health advocates (NAMI) are for Prop 1, while others (Mental Health America) are against. One criticism is that by requiring counties spend more of the unchanged source of MHSA dollars on housing-related services and supports, it could cut off money for some existing programs, and that’s not untrue. However, we generally agree housing is critical to recovery. (Can you imagine getting treated for alcoholism without having a room of your own?) So it makes sense to make it part of the mix, and has a shot at making our array of services more effective. 

The vast majority of people with severe behavioral health issues are housed, and there is general agreement that there are far too few facilities for them to be treated in.

Since Obamacare, insurance has been more and more required to pay for behavioral health services on parity with physical health services, so there has been new regular funding being layered on top, possibly making the bespoke county-by-county MHSA funding less vital. Having the insurance benefit doesn’t mean the service is available: because so many needed treatment facilities have withered on the vine over decades of neglect, and not come back, people can be covered and still be on waitlists, or end up in jail instead. And that brings us back to the bond, which does pay to make more of those needed facilities! So it all plausibly fits together.

One objection that’s in my opinion overblown is the question of locked facilities. In an earlier draft, Prop 1 said it could not be spent on locked facilities, e.g., designed for involuntary treatment. At some point in the legislative process, that ban disappeared, so now the bond money can be spent on such wards. And with Newsom’s CARE Courts, the state has been leaning harder on the idea of involuntary treatment recently. But some locked facilities might be needed, alongside less restrictive ones wherever possible. How much of which kinds are actually built is deferred to future decisionmaking by state and localities—Prop 1 just makes the money available, which everyone should want. It is not the case that this is about reinstitutionalizing the inconvenient, as some have suggested. It will unlock many more ways to help people housed and unhoused.

There’s a lot Prop 1 doesn’t fix. But what it does is broadly a step in the right direction. Yes.

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