A broad exemption of commercial and multifamily development sales from Measure United to House Los Angeles could result in a reduction of approximately 35 percent, or an estimated $177 million, in annual revenue for housing and homelessness prevention programs, officials reported on May 15.
A committee is currently conducting hearings to understand the impacts of potentially reforming Measure ULA, with the goal of establishing recommendations to be decided on by all 15 members of the City Council and Mayor Karen Bass.
On Friday, the City Council’s three-member Ad Hoc Committee on Measure ULA convened to discuss a report from the Los Angeles Housing Department on the impacts of proposed changes to Measure ULA. Currently, elected officials are exploring whether to exempt newly constructed multifamily and commercial buildings from Measure ULA for up to 15 years, and exempt properties impacted by natural disasters like the Palisades Fire from the tax for up to three years.
They are also exploring potential changes to financing terms to allow traditional lenders to participate in funding ULA-supported housing projects, among other possible reforms. LAHD officials reported that a combination of the broadest exemption scenarios for commercial and multifamily properties could reduce total revenue by approximately 35 percent, or an annual reduction of $177 million in ULA revenue.
Officials warned that actual loss may be higher considering potential lost interest revenue associated with ULA loans. Specifically, exempting properties built or substantially remodeled within the last 15 years (excluding single-family homes, duplexes and triplexes) could reduce revenue by 29 percent or an estimated $145 million per year.
Exempting properties built within the last 15 years (excluding single-family homes, duplexes and triplexes) it could reduce revenue by about 13 percent, or an estimated $64 million per year. Exempting residential transactions of properties impacted by the Palisades Fire could reduce revenue by 6 percent or about $32 million annually during the period that is agreed to. Exempting single-family homes destroyed by the fire could reduce revenue by 2 percent or an estimated $8 million annually for however long it is agreed upon.