Los Angeles City Council Approves $467 Million Affordable Housing Fund, Largely Backed by Measure ULA

The Los Angeles City Council recently approved a $467 million funding round for affordable housing, with $324 million allocated from Measure ULA, the city's transfer tax on high-value property sales. This marks the second round of the Homes for L.A. program, which is approximately 20% larger than the initial $393.9 million authorized last year. The program is set to open to developers on October 13, with project applications due December 4.

Measure ULA, often referred to as the “mansion tax,” imposes a 4% tax on property sales over $5.4 million and 5.5% on sales exceeding $10.9 million. Since its implementation in April 2023, the tax has generated nearly $1.4 billion. However, a study by researchers from Harvard, UC Irvine, and UC San Diego indicated a 50% drop in high-value property sales in Los Angeles due to the measure, with an estimated 80 cents of lost general fund property tax revenue for every dollar of ULA revenue.

The new ULA funds will be distributed across five programs, including $123.5 million for multifamily construction paired with low-income housing tax credits and $104.1 million for new construction under the “Alternative Models” program, prioritizing community land trusts. Additionally, the round incorporates $88.9 million from the county’s Measure A sales tax and $27 million from the city’s affordable housing linkage fee. Councilmember Imelda Padilla introduced an amendment requiring quarterly reports on funding use and project progress to ensure accountability.

This funding round provides crucial capital for developers and non-profits focused on affordable housing in Los Angeles, despite ongoing debate regarding Measure ULA's broader economic impact on the real estate market.