Developers rejoice: L.A. is about to divvy up $387 million for affordable housing projects.<\/p>\n
The money is being doled out by the L.A. Housing Department<\/a>, and it\u2019s the largest solicitation in the department\u2019s history. The majority is funded by Measure ULA<\/a>, the so-called \u201cmansion tax\u201d that charges a transfer tax to all L.A. property sales above $5 million.<\/p>\n Applications for the notice of funding availability, or NOFA, open Friday and close Oct. 20. Funds are available to nonprofit and for-profit developers, as well as community land trusts, limited equity housing co-ops, public entities and other organizations.<\/p>\n Housing Department General Manager Tiena Johnson Hall called it \u201chistoric moment,\u201d saying that the funding will go toward not only new construction, but housing preservation and operating assistance funding.<\/p>\n The $387 million \u2014 which consists of $316 million from ULA funds and $71 million from state and federal programs \u2014 represents the city\u2019s biggest commitment of ULA spending since the measure took effect in 2023. The tax has raised more than $784 million<\/a> in the last 2\u00bd years, but much of it hasn\u2019t been spent due to concerns that the tax could be overturned in court.<\/p>\n As legal challenges faded, the city passed a $150-million ULA spending plan<\/a> last year and a $425-million spending plan<\/a> in July.<\/p>\n Johnson Hall said the department doles out funding to housing projects every few years, but typically within the range of $50 million to $75 million, so the $387-million NOFA is a massive step up. Since Measure ULA is a continual source of funds, the Housing Department will be releasing new funding on a yearly basis going forward.<\/p>\n Typically, each round of funding receives about 30 to 35 applications from developers, though this round probably will attract more since there\u2019s more money to go around.<\/p>\n The funding marks a strategic shift as the city looks to expedite construction in the midst of a housing crisis. In previous rounds of funding, the city doled out money based on the number of units in a project. This time, funding is based on a percentage of development costs, and developers will receive higher awarded amounts than they usually do.<\/p>\n Johnson Hall said the new approach gives the city flexibility to better calibrate funding amounts to help developers meet the fluctuating cost of projects.<\/p>\n Funds can cover 30% of costs all the way up to 100%, depending on the project. Categories include multifamily construction, affordable housing construction, affordable housing preservation and construction of adaptive reuse projects, such as turning empty commercial buildings into housing.<\/p>\n The money is awarded as either gap financing or soft loans, which have little or no interest.<\/p>\n Critics of Measure ULA claim that the tax has stifled commercial development and slowed sales. A UCLA report<\/a> earlier this year claimed that the chilled market led to a $25-million loss in property tax revenue.<\/p>\n