Los Angeles Announces Historic $387 Million Investment โฃin Affordable Housing
Los Angelesโ is allocating a record $387โข million โto affordableโค housing initiatives, with the majority of the funds stemming from the city’s “mansion tax,” officially known as measure ULA. Applications for โคthe โfunding, released as a notice of Funding Availability (NOFA), โopened Friday and will close on Octoberโข 20th.
The funding is open to a wide range of applicants including nonprofit and for-profit developers, community land trusts, limited equity housing co-ops, public entities,โค and otherโข organizations. Housingโฃ Department General โManager Tiena Johnson Hall described the allocationโ as a “historic moment,” emphasizing the funds will support not only โnew construction but also housing preservation and operatingโฃ assistance.
The $387 millionโ isโ comprised of $316 million generated โคby Measure ULA,alongside $71 million from state and federal programs. This represents the city’s largestโฃ commitment of ULA funds since the taxโ – a transferโ tax on L.A. property sales above $5 million -โ took effectโค in 2023.โค
To date, Measure ULAโ has raised over $784 million,โ though spending has been cautious dueโ to ongoing legal challenges. the city โคpreviously approved a $150-million ULA spending plan in 2023 and a $425-million plan in โฃJuly.
johnson Hall noted that the department typically distributes funding in rounds ranging fromโ $50 million to $75 million, making the current $387 million NOFA a significant increase. โ She also stated that, because Measure ULA provides a continuous revenue stream, the Housing โDepartment plans to releaseโค new funding opportunities on a yearly basis. The city anticipates receiving 30 to 35 applications, though interest is โขexpected to be higherโค given theโข increased funding available.
This funding round marks aโข strategic shift in the city’s approachโ to โฃaddressing the housing crisis. Previously, funding โwas allocatedโค based on the number โฃof โคunits a project would create. Now,funding will beโ based on a percentage of overall development costs,resulting in โฃlarger awards โfor developers. This changeโ is intended to provide โฃthe city with greaterโข flexibility inโ adjusting funding amounts to account for fluctuating โฃproject costs.
funds can cover between 30% โฃand 100% of project costs, depending on the specific initiative. Eligible categories โคinclude multifamilyโ construction, affordable housingโฃ construction, affordable housing preservation, and adaptive reuse projects – such as convertingโฃ vacant commercial buildings into housing. The money willโค be awarded as eitherโ gap financing or soft loans with minimal or no interest.
The implementation of Measure ULA has faced criticism, with โขsome arguing it hasโ hindered โcommercial development and โslowed property sales. โAโข UCLA report earlier this year claimed the tax led โขto a $25-million lossโข inโฃ property tax revenue. However, proponents haveโ challenged the โreport’s methodology, asserting that Measure ULA โis a vital โfundraisingโค tool for the city’s โฃhousing and homelessness prevention efforts.