The Los Angeles City Council has greenlit a groundbreaking financial plan, tapping into Measure ULA—commonly known as the city's "mansion tax"—to allocate $150 million toward essential housing programs and initiatives. This marks the first time funds have been dispersed since the measure was ratified last November, according to an article from the Los Angeles Times.
With an overarching aim to enhance housing stability and affordability, the funding will be funneled into a suite of crucial projects. These include emergency rental aid, legal assistance for those facing eviction, educational programs for tenants, safeguards for renter rights, financial assistance for low-income elderly and disabled residents, and the creation of affordable housing options.
Nithya Raman, a prominent Councilwoman, underscored the transformative potential of this financial reservoir, declaring, "This is the most substantial and consistent revenue stream that the city has ever earmarked for these crucial objectives. It is a game-changer for the city of Los Angeles." To date, the tax has accumulated $55 million, and the full allocation of $150 million will commence once the collected revenue hits this benchmark. The hierarchy of funding priorities, encompassing areas like rental help and low-cost housing, is still under review.
Breaking down the $150 million allocation, the Los Angeles Times reports that $23 million will be set aside for eviction defense, another $23 million will assist seniors burdened by high rents, and $18.4 million will go toward alleviating rental debt. Details about the funds allocated to affordable housing development are yet to be disclosed.
Starting on September 19, the emergency rental assistance initiative will launch, focusing on helping tenants clear their back rent.
Introduced on April 1, Measure ULA institutes a 4% tax on both residential and commercial real estate sales over $5 million and a 5.5% tax on sales exceeding $10 million. Despite initial forecasts greatly overestimating the tax revenue—early estimates pegged the collection at around $900 million annually—the City Administrative Office later revised the projection to $672 million in a March report.
Since the measure took effect, the high-end real estate market in Los Angeles has seen a perceptible deceleration. In the month of April alone, just two properties were sold at a price tag exceeding $5 million. The market has not yet rebounded to its previous vigor, as luxury property owners have either held off on listings or sought alternative methods to circumvent the tax.
While Mayor Karen Bass' initial budget proposal for the fiscal year estimated a mere $150 million in revenue from Measure ULA, Councilman Bob Blumenfield reassured that, despite ongoing legal disputes, the entire sum will be deployed in line with its designated purposes. The fiscal year's total budget amounts to $13.1 billion.
