EDITOR'S NOTE: Multimedia journalist Tara Lynn Wagner spoke with a formerly homeless person and the United to House LA director about affordable housing. Click the arrow above to watch the video.
LOS ANGELES — Los Angeles city officials and supporters Thursday celebrated the one-year anniversary of Measure ULA, a real-estate transfer tax that they say has generated $215 million for affordable housing to date.
City Council members Nithya Raman, Bob Blumenfield and Hugo Soto-Martinez held a joint news conference Thursday morning with housing advocates, developers, renters and other stakeholders to highlight the significance of Measure ULA, also known as the "mansion tax." They also discussed a new report, called "Measuring LA's Mansion Tax," which found that the measure has "generated an unprecedented amount of money for affordable housing production and preservation."
LA voters passed ULA in November 2022, placing a 4% tax on all properties that sell for more than $5 million and a 5.5% charge on sales above $10 million. It took effect April 1, 2023.
The council previously approved a plan to use $150 million of proceeds from the tax for six programs — short-term emergency rental assistance, eviction defense, tenant outreach and education, direct cash assistance for low- income seniors and people with disabilities, tenant protections and affordable housing production.
In its first 10 months, ULA raised $192 million, an amount that exceeds the annual reveune of the city's Measure HHH anti-homelessness measure and is more than double the annual direct affordable housing funding Los Angeles receives from the federal government, officials said. To date, the measure has generated $215 million, according to the city's Housing Department.
Researchers at UCLA, USC and Occidental College studied the effectiveness of ULA, and published their findings Thursday, which can be found here.
"The pace at which ULA is generating revenue, especially over the last quarter, is impressive," Joan Ling, a real estate adviser and policy analyst in urban planning and a lead author on the report, said in a statement. "ULA is enabling Los Angeles to finally meet the big structural challenges driving our housing crisis — like the skyrocketing costs of land and construction — so that we can build more homes more quickly."
The report found that ULA funds are expediting the construction of 795 affordable housing units, including 331 supportive housing units — providing some form of health-related or social service programs. It also found that for every $1 of ULA funding for affordable housing projects, the city has received $10 from the state, federal and private funding, for a total of $514.8 million; and ULA has helped create more than 10,000 jobs by financing affordable housing projects.
According to the report, ULA also prevented thousands of evictions by providing rental assistance to 4,652 renters and providing full legal representation to 1,262 renters to fight eviction cases.
While supporters of the measure hail the $215 million in revenue generated by the tax, it's far below city estimates. The city initially estimated the tax would generate nearly $900 million, then reduced to about $672 million.
Part of the trouble stems from lawsuits challenging the measure, and real-estate transactions dropping below normal levels of activity, as many homeowners tried selling their properties before the tax went into effect.
In October 2023, an LA County judge dismissed a lawsuit filed by the Howard Jarvis Taxpayers Association, the Apartment Association of Greater Los Angeles and Newcastle Courtyards, which argued the measure was unconstitutional. City officials have said they expect appeals.
Representatives for The Howard Jarvis Taxpayers Association and the Apartment Association of Greater Los Angeles did not immediately respond to a request for comment Thursday morning.
The LA Times reported this week that the city's luxury real-estate market had dropped at a pace double other nearby cities.
"From April 2022 to March 2023, the year before Measure ULA hit, L.A. had 366 single-family home sales of $5 million or more," The Times reported. "In the 12 months since, there were just 166 — a drop of roughly 68%."
Critics of Measure ULA are also banking on a statewide ballot initiative in November, known as the Taxpayer Protection Act, spearheaded by Kilroy Realty. The act calls for a referendum on local special tax increases passed after Jan. 1, 2022. If approved, it would put Measure ULA at risk. The measure would require a two-thirds vote for tax measures to pass instead of a simple majority.