On Monday evening, in her first State of the City address, Los Angeles Mayor Karen Bass unveiled a bold plan for $1.3 billion in spending for her administration’s continued efforts to alleviate the city’s homelessness crisis.
On Tuesday afternoon, Bass’ proposed budget shed light on the source of some of that funding: $150 million that will come from Measure ULA, the city’s signature — and legally contested — new transfer tax.
Of the $150 million in Measure ULA funds that made it into Bass’ proposed budget, $62 million is slated for property acquisition and rehab, $25 million each will go toward eviction defense and income help for seniors and people with disabilities, and $20 million is earmarked for short-term emergency assistance for tenants. Smaller amounts are dedicated for tenant outreach and harassment protection programs.
But the $150 million figure represents something of a cautious bet.
Measure ULA, which voters passed in November, is expected to generate well over that amount annually — the latest 2023 fiscal year revenue estimate is $672 million. It’s also currently being opposed in court by landlord and taxpayer groups, who argue the tax is illegal and should be nixed.
If the city ends up losing in court, it could end up with no funding from the measure at all, a fact the mayor acknowledges. “Measure ULA is currently in litigation,” the budget summary reads, “creating uncertainty around available funds.”
In the event the city loses and the tax is invalidated, the $150 million would instead come from “anticipated federal reimbursements,” the budget summary says, noting that city staff has already identified such reimbursements.
Measure ULA, which imposes a new transfer tax of 4 percent on most property deals in the city above $5 million and a 5.5 percent tax on most deals above $10 million, took effect April 1 after months of outcry from the industry and some frantic last-minute trading. Further legal action regarding the pending lawsuits is expected later this month, when a judge will hold a hearing over whether to combine two lawsuits against the city.
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