Following a successful petition by a coalition of labor unions and other organizations, and a 14-0 city council decision Wednesday, Los Angeles voters in November will consider a ballot measure that would create a tax on multimillion-dollar property sales to fund solutions to homelessness, including permanent housing.
The coalition began collecting signatures for the United To House L.A. ballot measure in January, with the goal of getting 65,000 signatures to qualify for the November 2022 general election.
On May 2, the group turned in 98,043 signatures, with a sufficient number verified by the City Clerk. On Wednesday, the city council decided to add the measure to the November general election ballot instead of calling a special election.
If approved by a majority of voters in November, the measure would create a 4% tax on properties sold for more than $5 million, and a 5.5% tax on properties sold for more than $10 million.
“In this moment, we need to do something really big. United to House L.A. will be the biggest investment the city has ever made in preventing homelessness and will provide hundreds of millions a year for affordable housing,” said Alliance for Community Transit-Los Angeles Director Laura Raymond, who co-chairs United To House L.A.
Raymond said in December that the revenue raised by the tax would be invested in affordable and permanent housing, as well as oversight of how the tax dollars are spent, including through a dedicated inspector general. She claimed it would provide “the strongest citizens oversight and accountability protections in the history of Los Angeles.”
The group contends the tax would have generated about $800 million between March 2019 and March 2020, by taxing only 3% of real estate sales that year.
The coalition anticipates the measure would create more than 26,000 homes for people experiencing homelessness or who are at risk of homelessness, helping about 69,000 people over the next 10 years. The group also claims the investment in homelessness prevention could help more than 475,000 at-risk renters stay in their homes each year.
The coalition includes Leaders from the Alliance for Community Transit-LA, the Korean Immigrant Workers Alliance, Los Angeles Community Action Network, the Los Angeles/Orange Counties Building & Construction Trades Council, Move LA, the NoHo Home Alliance, Renters’ Right to Counsel, and the Southern California Association of Non Profit Housing.
Raymond said Wednesday that 143 organizations had joined the effort.
“It’s estimated that in the first 10 years, this will build over 25,000 units of affordable housing that will house almost 70,000 people,” Frank Martinez, policy director for the Southern California Association of Nonprofit Housing, said. “The stability of a permanent source of funding is extremely important for those who build affordable housing. It allows them to plan ahead and build up their pipeline and keep that flow of affordable housing coming and make it increase. The affordability crisis and the homelessness crisis in Los Angeles will not go away without us as a society making decisions and commitments to help get there, and this is one of those opportunities to make one of those choices.”
Voters in November 2016 passed Proposition HHH to use $1.2 billion to build 10,000 units for homeless Angelenos, with the goal of more than tripling Los Angeles’ annual production of supportive housing.
The high cost of Proposition HHH-funded projects has been criticized by some. A January 2022 report by Controller Ron Galperin said the average cost of Proposition HHH projects is $600,000 per unit, up from $530,000 in 2020. When the proposition was passed by voters, the city anticipated that each unit of supportive housing would cost between $350,000 and $414,000.
Galperin’s report included details of the cost of Proposition HHH units in the last year, with one project in pre-development expected to cost $837,000 per unit, making it $100,000 more expensive per unit than the most expensive project in 2020.
Galperin said costs could reach $900,000 or $1 million per unit if the city doesn’t make any changes.
While the coalition’s proposal would build on Proposition HHH by prioritizing permanent housing, Los Angeles City Councilman Joe Buscaino has proposed a ballot measure that would require the city to prioritize emergency temporary shelter production over permanent housing. That measure would also prohibit encampments across the city if enough shelter is available and offered.