Lefty LA pols tout ‘Mansion Tax’ — but less than 1% of $1B raised has gone to affordable housing

LA lefties this week crowed about the “mansion tax’’ they created to curb homelessness — but forgot to mention the city hasn’t been able to spend more than 1% of its $1 billion pot on housing.

That’s because of a mind-boggling snafu that stems from the fact that while city voters approved the 2023 tax, the progressives behind it failed to include a way to loan the money to developers of low-income housing — the key component of the plan, critics said.

Voters would have to pass a fresh measure to set up a system to dole out loans to developers from the tax pot, they said.

“What voters thought they were approving was housing,” said Mott Smith, an adjunct professor of real estate at the University of Southern California who reviewed the city’s numbers, to The Post.

“What they got was a billion-dollar pot of money that can’t be used.”

City Councilwoman Eunisses Hernandez, a Democratic Socialist and one of the chief architects of the controversial tax, mounted the steps of City Hall on Tuesday to tout the $1 billion raised through the measure so far.

Hernandez did not mention the far-less-flattering reality.

Instead of the tax-generated big bucks flowing into new homes or other supportive brick-and-mortar projects, the bulk of Measure ULA’s spending to date has gone to administrative overhead and legal defense

That includes shelling out the money to staff up bureaucracies, pay consultants and lawyer up to fend off lawsuits tied to the tax itself.

The measure slapped a steep transfer tax on high-dollar real-estate sales, targeting properties sold for $5 million or more.

Supporters promised the levy would unleash billions of dollars for affordable housing construction and homelessness prevention — mainly through loans to developers.

But city records show that to date, while $1.03 billion has been collected since the tax kicked in, $93.9 million has actually been spent — barely 9% of the total, according to Los Angeles Housing Department data reviewed by The Post.

Only $9.38 million — less than 1% of all revenue — has gone toward affordable housing construction, acquisition or rehabilitation.

The lion’s share of spending, $67.9 million, or 72.3%, has gone to homelessness prevention programs rather than housing production.

The single largest outlay was $30.4 million for short-term emergency rental assistance.

Administration and overhead consumed another $16.6 million, accounting for 17.7% of all spending.
In raw terms, ULA has spent far more running the program than producing the homes voters were promised.

“They’re celebrating how much money they’ve collected,” Smith said.

“But that money is a cost to the local economy — at least a billion dollars — and the real cost is far greater.”

Smith said the tax has meanwhile effectively frozen development across the city.

A UCLA Lewis Center study he co-authored found that property transactions above the ULA threshold dropped 30% to 50% in Los Angeles compared to the rest of the county.

Danny Brown, a principal in the Luxury Estates Division at Compass with more than 23 years of experience, added, “The domino effect of Measure ULA is that the entire real estate ecosystem — a massive economic engine and revenue generator for our city — has plunged by more than 50 percent.
“If the funds were truly being spent as intended to support poor families who need housing, we would all be behind ULA.

“Instead, this is another corrupt money grab by the city, misrepresented as a solution for low-income housing,’’ he said.

Supporters of Measure ULA — including Hernandez, labor unions, progressive advocacy groups, and City Hall-aligned activist organizations — sold the tax as a bold fix that would rapidly deliver housing at scale.

The measure was backed by the United to House LA coalition, which included unions such as SEIU 2015 and UNITE HERE Local 11, along with homelessness service providers and left-wing policy groups.

Then, Gov. Gavin Newsom publicly praised the initiative during the campaign, arguing that only “sustained, ambitious and innovative” funding could address homelessness statewide.

Also listed as supporters on the ULA’s websites was People’s City Council Los Angeles, a far-left coalition formed in 2020 by City Hall agitators who accused elected officials of moving too slowly on housing and homelessness during the pandemic.

The group gained notoriety for protests outside officials’ homes and raised more than $1.1 million during the 2020 unrest, according to public reporting.

Hernandez did not respond to a Post request for comment. Newsom’s office did not immediately respond, either.