California voters narrowly approved a measure that will dramatically restructure the state’s mental health system.

The Associated Press called the race two days after polls closed. Proposition 1, which was the only statewide measure on California’s ballot on Super Tuesday, is key to Gavin Newsom’s plan to address the homelessness crisis.

Proposition 1 marks the first update to the state’s mental health system in 20 years and a win for the Democratic governor, who spent significant time and money campaigning on the measure’s behalf, raising more than $13m to promote it with the support of law enforcement, first responders, hospitals and mayors of major cities. Opponents raised just $1,000.

The measure will raise $6.4bn over 20 years to build more housing and treatment facilities for people with mental health and substance use disorders. It will also enact new requirements on how the state’s mental health budget would be spent – redirecting about a third toward housing and rental assistance for unhoused people with serious mental illness or addiction, and another 35% toward treatments for that population.

Newsom celebrated after the proposition passed narrowly two weeks after election day. “This is the biggest change in decades in how California tackles homelessness, and a victory for doing things radically different,” he wrote in a statement. “Now, counties and local officials must match the ambition of California voters. This historic reform will only succeed if we all kick into action immediately.”

Early polls suggested that the measure would easily passed, but as vote counting began it became clear that Californians remained deeply divided over it. Conservatives have balked at the measure’s borrowing costs – but Prop 1 was also criticized by local officials, because it would take money away from community-based preventative mental health programs in order to fund in-patient treatment programs. Disability rights advocates also fiercely opposed Prop 1 because it will fund locked-door psychiatric institutions and involuntary treatment, which could be counterproductive and re-traumatize people with severe mental illness and substance abuse disorders.

It is one of the most complex and convoluted measures voters have had to decide on in recent years. The full text of the proposition in the state’s 112-page voter guide takes up 68 pages.

Newsom had touted the measure as a way to “prioritise getting people off the streets, out of tents and into treatment”. But critics pointed out that while the measure would provide more housing for veterans and others, it would also fund programs that facilitate coerced in institutionalisation. Newsom’s other landmark mental health reforms include the Care court program, which empowers families, healthcare providers and outreach workers to ask state courts to compel people with certain severe mental disorders into treatment programs designated by local governments, and SB43, which expands the group of people who can be placed in involuntary psychiatric holds.

Mental health and social welfare researchers have said that while involuntary treatment may provide relief to families struggling to help relatives in the depths of crisis, involuntary treatment does not tend to help patients.

“Few who review the existing evidence conclude that on balance, involuntary treatment improves the lives of those who experience it,” said David Cohen, a professor of social welfare at the University of California, Los Angeles, in an interview last month. “It’s literally a Band-Aid solution.”

The group opposing the measure initially conceded, but this week had retracted their concession as the race remained too close to call. The latest vote totals showed the measure winning 50.2% to 49.8%.