Putting the Public Back in Housing – Part 2

Los Angeles is expanding its social housing footprint through the United to House LA (ULA) program, funded by a progressive “mansion tax” on high-value property sales. The city has allocated over $131 million for five new construction projects, aiming to create permanent affordability and tenant-led governance in a market-driven environment.

How does the ULA “mansion tax” fund social housing?

The ULA program operates via a real estate transfer tax on high-value transactions. As of July 1, 2025, the tax is 4% on property sales between $5.3 million and $10.6 million, and 5.5% on sales of $10.6 million or more.

Revenue flows into the “House LA Fund.” According to the program’s mandate, 70% of these funds go toward affordable housing production—with 22.5% of that portion dedicated to Alternative Models for Permanent Affordable Housing—while 30% is reserved for tenant assistance and homelessness prevention.

The funding stream has proven substantial. By January 2026, the ULA brought in more than $1 billion in total revenue, a figure that exceeds collections in any other American city.

Which projects are currently receiving funding?

In April, the mayor forwarded five “Alternative Models New Construction” awards totaling $131,304,442 to the City Council. These projects are expected to produce 491 new units.

The awards include $20 million for Phase II and III of One San Pedro in Council District 15, and $40,857,202 for Fourth Clover in Council District 10. Other recipients include 725 Hartford Avenue with $55,974,985 in development costs and the Linda Vista project.

Linda Vista in Boyle Heights serves as a model for small-scale social housing. Sponsored by LTSC Community Development Corporation, it involves the Community Power Collective and Fideicomiso Comunitario Tierra Libre to secure community land ownership for 47 units.

Why is the current financing model being questioned?

Councilmember Nithya Raman has argued that existing financing models are too cumbersome for true social housing. Currently, many ULA awards rely on Low-Income Housing Tax Credits (LIHTC), which Raman suggests are “strange bedfellows” for public housing.

The LIHTC process is driven by private, profit-seeking actors rather than community organizations. A significant risk is that LIHTC projects can convert to market rates once affordability covenants expire, typically after 30 years.

What alternative financing models could LA adopt?

Analysts suggest LA could follow the Seattle Social Housing initiative by establishing a development authority to issue social housing bonds. This could allow the city to avoid complex private bank financing and potentially increase the number of units built annually.

Another possibility is the creation of a Social Housing Development unit. This entity could use state power to acquire distressed properties before private investors do, rehabilitate them, and transfer them to the social housing sector.

The proposed LA Public Bank is also a potential tool. Currently awaiting a $450,000 feasibility study, such a bank could underwrite housing bonds at cost and provide low-interest bridge loans to tenant-led projects.

What political risks face the program?

The ULA program faces a significant challenge from the Howard Jarvis Taxpayers Association. An initiative qualified for the November ballot that could trim transfer taxes to one-twentieth of a sale’s value, which Jon Coupal, president of the association, suggests would heavily impact ULA funding.

Internal policy shifts may also reduce revenue. Councilmember Raman introduced legislation that could provide a 15-year ULA carveout for new multifamily and commercial projects, as well as exemptions for properties hit by natural disasters like the Palisades fire.

If passed, this carveout could reduce ULA revenues by 35%, or approximately $177 million. While a June vote for this measure was unsuccessful, the council continues to consider the issue.

Frequently Asked Questions

What are the income requirements for ULA social housing units?

At least 20% of units are reserved for Acutely Low Income (0-15% of Area Median Income) or Extremely Low Income (up to 30% of AMI) households. Another 60% must serve Low Income households (up to 80% of AMI), while up to 20% may be unrestricted to allow for cross-subsidies.

How does the “Alternative Models” program differ from traditional affordable housing?

The program emphasizes a process that is certain, fast, flexible, and perpetual. It tilts toward streamlined non-federal decision-making and encourages the use of public land and resident leadership.

Is social housing expanding beyond Los Angeles?

Yes. The Santa Monica city council has directed staff to study a nonprofit housing development entity similar to Seattle’s model. This would allow for mixed-income housing without the strict income bands prescribed by federal programs.

Do you believe city-led “mansion taxes” are a sustainable way to fund permanent affordable housing?