Meanwhile, some groups representing local governments have previously expressed reservations about such initiatives because they see tax breaks on property tax as reducing the increase in property tax revenues that would would normally come from the sale of a home.
Indeed, the official fiscal analysis done by the state's Legislative Analyst's Office estimates there would be losses in property tax revenues.
According to the nonpartisan office, the first few years could result in property tax losses for schools and local governments of about $150 million apiece annually. It estimates those losses could only grow over time, and result in schools and local governments each losing $1 billion or more annually. Also, it said there could be costs to the state for school and community college in some years due to the fiscal impacts at the local level and state laws that guarantee some public education funding levels.
Eva Spiegel, a spokesperson for the League of California Cities, said the group has not taken a formal position on the measure but indicated in the past they "opposed similar legislative proposals."
The league, a lobbying group representing cities around the state, estimated in March 2017 that about 78 percent of the counties in California had less property tax revenue than in 2008, when adjusting for the impact of inflation and population.
On the other hand, proponents dispute the impact of lower property tax revenues from the measure and insist the reduction in property taxes could be offset somewhat by economic activity elsewhere.
For example, they say with neighborhoods repopulated with young families there could be more spending in the community on such things as household furnishings, renovations and other economic activity. And in the case of renovations, it can raise the home's value and result in a higher assessed value for property taxes.
In recent years, 350,000 to 450,000 homes have sold in the California market annually, according to the Legislative Analyst's Office. It estimates that the proposed measure has the potential to increase that number "by as much as tens of thousands per year."
Finally, the California Chamber of Commerce supports the voter measure and says the state has "a massive housing shortage and needs at least 100,000 additional new units a year to meet demand." It also believes the initiative "could help ease the shortage by freeing up modest-priced homes and move-up housing for young families.