Los Angeles ‘mansion tax’ fuels record affordable housing funding

Los Angeles will make $387 million available for affordable housing projects — reportedly the largest single funding round in the city housing department history.

Applications for the funds opened Sept. 5 and close Oct. 20.

Eligible applicants include nonprofit and for-profit developers, community land trusts, limited equity housing cooperatives, public entities and other organizations, the Los Angeles Times reported.

Most of the money — $316 million — comes from Measure ULA, a transfer tax on property sales above $5 million that voters approved in 2022.

Another $71 million comes from state and federal sources.

‘Mansion tax’

Measure ULA — sometimes referred to as the “mansion tax” — has drawn both support and criticism.

Opponents argue slows commercial development and reduces property sales. Supporters say it provides the city with a crucial tool to address housing shortages and homelessness.

The levy has raised more than $784 million in 2½ years, though much of it remained unspent amid court challenges.

After those efforts failed, the city approved a $150 million ULA spending plan in 2024 and another $425 million plan in July.

According to leaders, previous funding rounds typically totaled between $50 million and $75 million. The new $387 million offering is reportedly intended to become a regular occurrence.

Funding distribution

Los Angeles is also changing how it allocates money.

In prior years, funding was awarded based on the number of units in a project. This year, awards will be tied to a percentage of development costs — with higher amounts available.

Los Angeles Housing Department General Manager Tiena Johnson Hall told the Times that the new approach gives the city flexibility to better calibrate funding amounts to help developers meet the fluctuating cost of projects

Eligible categories include multifamily housing, affordable housing preservation and adaptive reuse projects such as converting commercial buildings into housing.