In a landmark decision, the Los Angeles City Council has approved a $150-million spending plan for funds raised by Measure ULA, a move that marks the first time such funds will be specifically earmarked since the measure was passed in November. The funds will be directed towards six key areas, including 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. Councilmember Nithya Raman hailed the measure as a "transformative" source of consistent revenue for the city.

Measure ULA, also known as the ‘mansion tax,’ came into effect on April 1, imposing a 4% charge on all residential and commercial real estate sales in the city above $5 million, and a 5.5% charge on sales above $10 million. Despite initial projections suggesting that the tax would raise around $900 million per year, the actual revenue has been significantly lower, with only $55 million raised since April. This discrepancy is largely attributed to the slowing real estate market and homeowners seeking to avoid the tax through various means.

Los Angeles City Council Passes $150 Million Measure ULA Spending Plan

The Los Angeles City Council has approved a $150-million spending plan for funds raised by Measure ULA. This marks the first time the funds will be specifically allocated since the tax was passed by Angelenos in November.

Six Programs to Benefit from the Funds

The spending plan will be channeled towards 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. Councilmember Nithya Raman described the funding as the largest consistent source of revenue the city has ever had for such uses.

The $150 million will be distributed with $23 million going toward eviction defense, another $23 million for income support for rent-burdened seniors, and $18.4 million for rent debt assistance. The emergency rental assistance program will be the first to be implemented, set to launch on September 19.

‘Mansion Tax’ Raises Funds

Measure ULA, often referred to as a ‘mansion tax,’ came into effect on April 1. It introduces a 4% charge on all residential and commercial real estate sales in the city above $5 million, and a 5.5% charge on sales above $10 million. Since its implementation, the tax has raised approximately $55 million. However, city officials stated that the money can only be spent as it comes in, meaning the full $150 million can’t be used until the tax generates an equivalent amount.

Community Support for Measure ULA

Before the vote at Tuesday’s meeting, several tenants and community activists expressed their support for the funding, highlighting the desperate need for tenant-outreach and eviction-defense programs. Community members, including Karely De La Cruz from TRUST South L.A. and Chad Williams from the Alliance of Californians for Community Empowerment, emphasized the importance of the funds for ensuring housing rights and serving the community.

Challenges Ahead

Despite the approval, a couple of major challenges await Measure ULA. An ongoing court case arguing the tax’s constitutionality and a state ballot measure Californians will vote on next year could potentially dismantle Measure ULA. Despite these hurdles, Councilmember Bob Blumenfield confirmed that the full $150 million will be spent even if the measure is eventually overturned.

Takeaways

The passing of the $150-million spending plan from Measure ULA funds by the Los Angeles City Council is a significant step towards addressing housing issues in the city. The allocation of funds to six crucial programs could transform the lives of many low-income tenants and seniors. However, the challenges ahead with the ongoing court case and the 2024 ballot measure are considerable and could potentially overturn Measure ULA. As such, it’s crucial for stakeholders to keep a close eye on these developments.