Los Angeles will reap what it has sown with a new funding round backed by the local transfer tax on high-value property sales known as the “mansion tax.”
The Los Angeles City Council voted 13-0 on Tuesday to open a $467 million affordable housing funding round, with $324 million of it coming from Measure ULA.
The second round of the city’s Homes for L.A. program, which opens to developers Oct. 13, is about 20% larger than the $393.9 million the council authorized during the first round last year, according to the housing department.
That money is slowly making its way into the hands of housing developers, land trusts and nonprofits, with awards to 80 projects approved this spring. Housing officials told the council’s Housing Committee on Sept. 16 that it would “begin executing loan agreements” for 71 of those projects in October. The nine others are awaiting state tax credit decisions.
Councilmember Ysabel Jurado, who previously chaired the council’s ad hoc committee on Measure ULA, said the program “shows what it looks like when we invest in people with intention, not just in theory, but with real dollars, real projects, and real homes.”
And United to House L.A., the coalition that campaigned for Measure ULA in 2022, called the round “record-breaking” in a press release.
“ULA is working and is wildly successful,” Joe Donlin, executive director of the coalition said in a statement.
The announcement, however, was not without its detractors. Mott Smith – an urban planning researcher and chair of the Council of Infill Builders, a pro-development group – disputed that characterization.
“This city is very, very proud of its aspirations and is not really being realistic about the work it has or has not completed,” Smith said. “It’s very premature for the city to be celebrating this.”
What’s clear is that while the tax has brought in nearly $1.4 billion since it went into effect three years ago, it’s also come at a cost to multifamily developers and their lenders, who are increasingly shifting their development pipeline outside the city. A study by researchers from Harvard, UC Irvine and UC San Diego published in August found that high-value property sales have dropped 50% in Los Angeles due to Measure ULA. And each dollar of ULA revenue is offset by about 80 cents of lost property tax revenue that would go towards the city’s general fund, the study found.
Where the money goes
The new pot of ULA money will be split among five programs, according to the housing department’s Aug. 17 report:
• $123.5 million for multifamily construction that can be paired with low-income housing tax credits
• $104.1 million for new construction under the ULA “Alternative Models” program, which gives priority to community land trusts
• 38.4 million for operating assistance to struggling existing buildings
• $32.7 million to preserve buildings whose affordability covenants are expiring
• $25.4 million to preserve financially distressed buildings
For the first time, the round includes $88.9 million funded by the county’s Measure A sales tax. And it also got a $27 million boost from the city’s affordable housing linkage fee, which will go towards stabilizing entire nonprofit housing portfolios instead of individual buildings.
This year, the council made a few changes that will help it keep closer tabs on how the money is being spent.
An amendment introduced by housing committee chair Imelda Padilla requires the housing department to report to the council every quarter on funding awarded and spent, the number of projects and units moving forward, project timelines and any significant delays.
“When we are talking about an investment of this magnitude, the council’s job does not end when we cast our vote,” Padilla said. “We need to follow these dollars and make sure they are producing the affordable housing Angelenos deserve.”
Housing officials also recommended some changes to certain program terms, including loosening those for the alternative models program since only two first-round projects were able to pencil out under the program’s loan structure, even with below-market interest rates, according to the department’s report.
Projects underway
United to House L.A. says the first ULA-funded projects are beginning to open.
A spokesperson for the coalition said a preliminary “accelerator plus” round announced in October 2023 allocated $57 million in ULA funds for 795 units across nine buildings. That includes nonprofit developer Little Tokyo Service Center’s 187-unit Santa Monica & Vermont project in East Hollywood, which opened in April 2025. Two buildings totaling 105 units at Flexible PSH Solution’s 316 N. Juanita Ave. are also completed.
And Venice Community Housing is awaiting $12 million awarded through the alternative models program in the first round for its three-building Slauson Preservation development.
The buildings are struggling with “significant deferred maintenance and repairs that are not possible to address with current reserve levels and cash flow,” Venice Community Housing’s Victor Tran said in a statement.
Sponsor applications for the second round are due Nov. 13, and project applications are due Dec. 4, according to the NOFA regulations.
Efforts to change the tax
All told, Measure ULA has generated nearly $1.4 billion since it went into effect in April 2023, according to the city’s online dashboard. Only 41% of that has come from sales of single-family homes.
The so-called “mansion tax,” which levies a 4% tax on property sales of more than $5.4 million and a 5.5% tax on sales of more than $10.9 million, has faced repeated efforts to reform or repeal it since voters approved it in 2022.
Mayor Karen Bass worked with state lawmakers to draft a bill last fall to overhaul the tax, but that effort quickly fell apart. In January, Councilmember Nithya Raman, who backed the measure in 2022, asked the council to place changes on the June ballot to exempt new multifamily projects from the tax for their first 15 years. Faced with an outcry from labor leaders and community groups that support ULA, the council sent the proposal back to the housing committee. Donlin said in a statement the motion represented “tens of millions, if not over a hundred million dollars, in cuts” to ULA revenue.
And in July, the council shelved yet another proposal to exempt new multifamily projects from the tax on the November ballot.
At the state level, the Howard Jarvis Taxpayers Association teamed up with the California Business Roundtable to qualify a measure for the November 2026 ballot that would have sharply capped municipal transfer taxes and targeted ULA in particular. But Howard Jarvis shelved the measure in June after lawmakers swiftly passed language for a substitute asking voters to require a two-thirds vote for new special taxes. That would not apply to existing taxes, allowing ULA to stand.
In response, Assemblymember Buffy Wicks, an Oakland Democrat, proposed AB 736, which would limit most transfer taxes, including ULA, to 1.5%. The bill’s status is unclear.
Smith said he does not expect another opportunity for state reform until 2028.
