Los Angeles is making a monumental investment in affordable housing, allocating a record $387 million to address the city’s pressing housing crisis. This unprecedented funding round, the largest in the history of the Los Angeles Housing Department, signals a significant commitment to increasing housing availability and affordability for residents. According to General Manager Tiena Johnson Hall, this marks a “historic moment” for the city.
Historic Investment in Affordable Housing
Who is Involved?
The Los Angeles Housing Department is the driving force behind this initiative, overseeing the distribution of the $387 million in funding. A wide array of applicants are eligible to apply, including both nonprofit and for-profit developers, community land trusts, limited equity housing co-ops, and other public entities. This broad eligibility aims to encourage diverse and innovative approaches to affordable housing development across the city.
What Happened?
On Friday, September 5, 2025, the Los Angeles Housing Department officially launched the application period for this landmark funding round. The $387 million available dwarfs previous funding rounds, which typically ranged from $50 million to $75 million. This substantial increase reflects the city’s intensified focus on tackling the housing shortage and its commitment to providing more affordable options for its residents, as reported by the Los Angeles Times.
When and Where?
The application window opened on September 5, 2025, and will remain open until October 20, 2025. The funding is specifically designated for affordable housing projects located within the city of Los Angeles. This initiative marks the commencement of a new annual funding cycle dedicated to affordable housing development within the city limits.
The “Why” Behind the Funding
Measure ULA’s Impact
The allocation of this significant funding is a direct response to the city’s critical housing shortage. A substantial portion of the funds, $316 million, originates from Measure ULA, also known as the “mansion tax.” This measure imposes a transfer tax on property sales exceeding $5 million, generating revenue specifically earmarked for affordable housing initiatives. As noted by Beritaja.com, Measure ULA has generated over $784 million since its implementation in 2023, making this funding commitment the largest allocation of ULA funds to date. An additional $71 million is derived from a combination of state and federal programs, further bolstering the city’s capacity to address the housing crisis.
Anticipated Impact and Strategic Shifts
Percentage-Based Funding Approach
This record funding is poised to reshape the affordable housing landscape in Los Angeles. The funds are intended to support a range of activities, including new construction, housing preservation, and operating assistance for existing affordable housing units. A notable shift in the funding strategy involves moving away from per-unit awards to a percentage-based approach for covering development costs. This new model allows projects to receive between 30% and 100% of their total expenses, depending on the specific needs and characteristics of the project. The Los Angeles Housing Department believes this streamlined approach will accelerate project development and encourage a higher volume of applications, according to department reports.
Addressing the Housing Shortage
The city anticipates a significant increase in application volume due to the substantial increase in available funding. By providing more comprehensive financial support and streamlining the application process, the Los Angeles Housing Department aims to attract a wider range of developers and accelerate the pace of affordable housing construction. This initiative represents a crucial step in the city’s ongoing efforts to combat the housing shortage and address the growing problem of homelessness, with the hope of creating more stable and affordable living options for its residents.
Streamlining Development for Affordable Housing
The strategic shift toward percentage-based funding is designed to streamline the development process and encourage innovation in affordable housing projects. By offering more flexible and comprehensive financial support, the city hopes to empower developers to create high-quality, sustainable, and community-integrated affordable housing options. This approach recognizes that each project has unique needs and challenges, and aims to provide tailored financial solutions to maximize their impact.
Long-Term Vision
This record investment in affordable housing reflects a long-term vision for a more equitable and sustainable Los Angeles. By prioritizing affordable housing development, the city aims to create vibrant, diverse communities where all residents have access to safe, stable, and affordable housing options. The success of this initiative will depend on the collaboration of various stakeholders, including developers, community organizations, and government agencies, all working together to achieve the shared goal of creating a more inclusive and affordable city.
In conclusion, Los Angeles’s record $387 million investment in affordable housing marks a pivotal moment in the city’s efforts to combat the housing crisis. Supported by Measure ULA and strategic shifts in funding allocation, this initiative promises to accelerate construction, preserve existing affordable units, and ultimately provide more residents with access to stable and affordable homes.
