Knock LA

Among those who caught the social housing bug is LA City Councilmember — now mayoral candidate — Nithya Raman, a onetime planner. Her broad housing experience enabled her to suggest some changes to how LA now finances social housing.

“One of ULA’s mandates requires that the City spend a percentage of the ‘House LA Fund’ on permanently affordable housing where tenants have the right to participate in their building’s governance,” Raman said in a 2023 newsletter. “This model of housing, known as social housing has been implemented in cities such as Paris and Vienna. Unlike market-driven models, social housing can create permanent housing affordability, and even provide pathways to homeownership.”

“However, in order to build these units, we have to find a new kind of financing model. Existing financing models simply will not work, especially the cumbersome process of financing affordable housing,” Raman said. “That’s why my office introduced a motion in partnership with Councilmembers Marqueece Harris-Dawson and Eunisses Hernandez to research and come up with the financing models that can generate social housing,” she said. 

The council approved the motion. The program Raman referred to — ULA, or United to House LA — is a sustainable funding stream dedicated to affordable housing production and homelessness prevention. It traces its origin to the widely debated (and widely cursed in the real estate community) “mansion tax.” ULA became law as the result of an initiative passed by Los Angeles voters in 2022 with a 58% yes vote — pretty nearly a landslide.

The initiative, implemented in 2023, established a progressive real estate transfer tax on high-value property transactions. The tax, effectively adjusted as of July 1, 2025, is 4% on property sales between $5.3 million and $10.6 million, and 5.5% on property sales of $10.6 million or more. The revenue goes into the “House LA Fund,” which has two categories: 70% for the production of affordable housing, (22.5% of which must go to the Alternative Models for Permanent Affordable Housing funding) and 30% for homelessness prevention and tenant assistance.

The Alternative Models Affordable Housing Program, one of several new ULA programs, is now the place to jump start social housing projects in LA. It emphasizes a process that is certain, fast, flexible and perpetual, with a decided tilt toward more streamlined non-federal decision making. 

The program has a minimum of 40 units per project, and 20% of the units are reserved for Acutely Low Income (0-15% of Area Median Income (AMI)) or Extremely Low Income (up to 30% of AMI) households. Up to 20% of the units may be unrestricted when it comes to income (which enables a cross-subsidy), and the remaining 60% of units must serve Low Income households (up to 80% of AMI). Use of public land is encouraged by favorable scoring in the application process.

How much this social housing program receives in a given year depends on how much revenue is raised. So far, though below projections, it’s been a lot — far more than any other American city. By January 2026, ULA brought in more than $1 billion in total revenue, a portion of which was allocated to social housing. While 2023 collections lagged, there’s been a steady increase in revenue, possibly reflecting positive market adjustments since enactment. The most recent round of awards, forwarded by the mayor to the City Council in April, were big for social housing. They include five project awards of ULA Alternative Models New Construction, totaling $131,304,442. The five new construction projects, slated to produce 491 new units, were:

• Phase II and Phase III, One San Pedro (Council District 15), sponsored by Century Affordable Development Inc (two awards of $10 million each). Total development cost for Phase II was $136,806,907 for 144 units, with a total cost per unit of $950,048. Total development costs for Phase III were $104,352,502 for 11 units. Cost per unit: $940,113.
• Fourth Clover, sponsored by West Hollywood Community Housing Corporation (Council District 10). $40,857,202 award. Development costs $67,828,202 for 89 units. Cost per unit: $756,165.
• Linda Vista (Community Land Trust), sponsored by LTSC Community Development Corporation (Council District 14). Development $34,582,468 for 47 units. Cost per unit: $735,797.
• 725 Hartford Avenue, sponsored by LAFHBUILDS, Inc. (Council District 1). Development costs $55,974,985. Cost per unit: $559,750.

Linda Vista, a Boyle Heights awardee that includes a community land trust, provides a useful snapshot of how social housing comes together on a relatively small scale. The community-owned housing development involved several local groups: Fideicomiso Comunitario Tierra Libre, a community land trust securing land for community ownership; Little Tokyo Service Center, an affordable housing developer with decades of LA experience, and; Community Power Collective, a grassroots organization building tenant power to shape housing decisions.

For Linda Vista, community input included four canvassing rounds, two focus groups, 100+ community surveys and a social housing workshop — with more to come. The award will fund 47 units across three sites, focusing on places for families and transitional-aged youth, on-site supportive services, community space and garden, and a food pantry.

Applicants showed far more interest in the ULA Alternative Models for New Construction than for the related, rehab-oriented social housing category, Alternative Models Preservation, which saw 19 applications with only two awards. The Alternative Models seeks, through new construction, to develop housing that is certain, fast, flexible and perpetual, using resident leadership and donated public land, where possible. While $52,707,574 was available for preservation projects, awards for the two winning projects totalled $15,383,360. Project winners were Slauson Preservation ($12,095,528) and 2611 Vallejo ($3,287,832).

Award letters should be going out in the near future and LAHD is gearing up for LA NOFA (Notice of Funding Availability) Round 2 in late summer. It also plans to prepare the FY 26-27 ULA Expenditure Plan for consideration before July 1, 2026. 

Fixing the Financing Methods

Councilmember Raman’s advice about the need to take a close look at ULA financing methods was on target. For example, most of the awards made for the Alternative Models Affordable Housing New Construction this year involve Low-Income Housing Tax Credits, which makes for strange bedfellows. LIHTC focuses on private actors, rather than public/community organizations. The many intermediaries in the complex LIHTC process have one thing in common — all are driven by profit, not public ownership or tenant control. As the Hillside tenants found, LIHTC projects can convert to market rate when affordability covenants expire, typically after 30 years. Rent increases for some tenants in existing LIHTC projects can be more than double nearby tenants in comparable buildings.

Perhaps the most important potential ULA finance change — a change that would put it in the housing big leagues — would be to follow the model of the Seattle Social Housing initiative, which established a development authority to issue social housing bonds — an authority ULA lacks — and thereby greatly increase available funds.

Municipal bonds, secured by anticipated revenue from the “Mansion Tax,” can be issued while avoiding costly and complex private bank financing, enhancing the ability to finance thousands more units in any given year. Using a conservative 5-1 bond ratio, a Seattle-style $10 million bond investment by the ULA Alternative Models Affordable Housing Program could yield $50 million up front to finance social housing in a given year. 

One proposal under consideration by social housing analysts would use a type of housing jiu jitsu to transfer housing out of the private market and place it in the public sector. This would come about via the creation of a Social Housing Development unit, which would use the power of the state to acquire distressed properties before the private market can, proceeding to rehabilitate the property, then eventually transferring it to the social housing sector.The authority would provide low cost financing, if necessary, to the social housing entity. This crowding out of real estate “vultures” could have the effect of lowering overall housing costs.

Another key social housing financing change may involve the proposed LA Public Bank, which now looks to be in the cards (next step: full funding for a $450,000 public bank feasibility study). Among other things, the public bank could issue housing bonds, saving millions in Wall Street fees. It could underwrite housing bonds at cost, keeping associated fees within LA. The bank could use its own deposits to purchase the city’s housing bonds, in effect enabling the city to borrow from itself, reducing long-term debt service costs in the process. 

Finally, a public bank is far more likely than traditional banks to provide low interest bridge/construction loans to tenant-led, publicly owned social housing. Supporters argue that a public bank could become a major financing tool for future social housing projects. 

Where does this put social housing in LA? Even without bond authority or the existence of a public bank, when it comes to funding shovel-ready social housing projects, LA’s approach differs from those in other cities by directing funding toward projects that are already moving through the development pipeline. The Seattle social housing initiative has yet to produce newly constructed housing units, though supporters argue it has established a framework for future development.

There are signs that Southern California social housing initiatives will not end with LA. The Santa Monica city council recently directed staff to study the creation of a Seattle-like nonprofit housing development entity that could build mixed-income housing at a scale the LIHTC program cannot achieve by itself. The development entity would be able to secure land, access tax exempt financing and develop mixed income, without the complexity and income requirements of LIHTC. According to City Manager Oliver Chi, “Rather than being limited to income bands prescribed by federal programs, the entity could develop mixed-income housing serving a range of needs — from the very low-income through moderate and workforce levels.”

The program also faces political challenges. The Howard Jarvis Taxpayers Association-sponsored initiative to penalize cities that make use of ULA-like transfer taxes recently qualified for the November ballot. The initiative would trim transfer taxes to one-twentieth of a real estate sale’s value. Since the ULA transfer tax is 100 times that value, supporters say it could significantly reduce funding for the program. 

ULA is a big Jarvis target. According to Jon Coupal, president of the association, “I think that ULA was not just the straw that broke the camel’s back, but the redwood tree that broke the camel’s back.” 

When it comes to social housing in LA, the relatively smooth standing up of the ULA funding mechanism represents the best of times. Passage of the Jarvis amendment in November would, of course, represent the worst of times. In January, Councilmember Raman introduced legislation, backed by real estate interests but opposed by social housing advocates, calling for a June vote providing for a 15-year ULA carveout for newly built multifamily, commercial and mixed use projects, as well as an exemption for residential properties impacted by natural disasters, such as the Palisades fire. The initiative could cut ULA revenues by 35%, or $177 million. The measure calling for the June vote was not successful, but the council continues to consider the issue.

With another round of awards slated for later this year, and a pending vote on the deadly Jarvis initiative, it should be an interesting — if somewhat fretful — summer and fall for LA social housing.

Brian Michael Doherty worked as a reporter for Housing Affairs, a Washington DC-based national housing trade publication, as a housing and banking legislative aide in the House of Representatives, as mortgage lending enforcement senior staff for HUD’s Office of Fair Housing and Equal Opportunity, and as senior manager responsible for enforcing affordable housing mandates at the Federal Housing Finance Agency.