This citizen-sponsored ballot initiative would amend City law to add a tax on the sale or transfer of real property valued over $5 million to fund affordable housing and tenant assistance programs. The City collects a tax on the sale or transfer of property. The proposed ordinance would impose an additional tax as follows:
- A 4 percent tax on the sale and transfer of real property valued over $5 million but less than $10 million; and
- A 5.5 percent tax on the sale and transfer of real property valued at $10 million or greater.
The property value threshold subject to the tax would be adjusted annually based on the Chained Consumer Price Index. Qualified affordable housing and government entities would be exempt from the tax.
This tax is estimated to generate $600 million to $1.1 billion annually. At least 92 percent of the proceeds from the tax would fund affordable housing under the Affordable Housing Program and tenant assistance programs under the Homeless Prevention Program. No more than 8 percent would fund program administration, reporting, compliance, and implementation.
This measure’s goals include increasing the supply of affordable housing, addressing the need for tenant protections and assistance programs, and building organizational capacity of organizations serving low-income and disadvantaged communities, among others.
The Affordable Housing Program would fund the development of affordable housing to serve acutely low, very low, and low-income households. Housing units would be affordable for 55 years or permanently, if permitted by law, and be subject to resale restrictions. This program would fund affordable housing, including:
Development of multifamily housing;
- Alternative housing solutions that can include new supportive and affordable rental or mixed rental/homeownership projects, with up to 20 percent of the units available at market rate and 20 percent set aside for acutely or extremely low-income households;
- Acquisition, preservation, lease, rehabilitation, or operation of affordable housing;
- Homeownership opportunities, capacity-building for Community Land Trusts and similar organizations, operating assistance, and rental subsidies.
The Los Angeles Housing Department (LAHD) would have authority to approve funding of up to $50 million per project without City Council review and approval. The measure would require payment of prevailing wages and housing developments with 40 or more units would need to comply with certain project labor agreements. If a project results in displacement of a tenant, relocation assistance and right of first refusal for a comparable unit in the development would apply.
The Homeless Prevention Program would fund resources such as:
- Rental and income assistance;
- Eviction defense and prevention programs;
- Tenant outreach and education;
- Tenant harassment protections;
- A Tenant Council, comprised of tenants and currently homeless individuals living in the City. Members with diverse backgrounds would be appointed by the Mayor, subject to approval of the City Council. The Tenant Council would advise LAHD, the Citizens Oversight Committee, and City Council on activities related to tenant protections and fair housing.
This measure creates a 15-member Citizens Oversight Committee, comprised of 13 voting members and two advisory youth members. Members with diverse backgrounds and expertise would be appointed by the Mayor, subject to approval of the City Council. The committee would make recommendations to the City Council on funding guidelines, conduct housing-needs assessments, monitor program implementation, and audit fund expenditures.
LAHD would provide an annual Expenditure Plan to the Citizens Oversight Committee and the City Council with projected revenue and expenditures for at least three years. Funds must be expended within a specified timeline and may be periodically reallocated among categories in accordance with need, subject to certain procedures.
Source: City Attorney's Impartial Analysis of Initiative Ordinance ULA