Facing a nearly $1 billion deficit, the city of Los Angeles is set to finance much less affordable housing over the next year under a proposed budget released this week by Mayor Karen Bass.
The budget calls for a nearly 80% drop in city financing of new affordable housing units, declining from 770 homes in the current fiscal year to 160 homes in the next fiscal year.
Speaking with reporters Tuesday at a San Fernando Valley car dealership, Bass said economic conditions are increasingly unfavorable to housing development.
“The housing market, period, has been in decline because of interest rates and the general economy,” Bass said. “We have to look for how we cut back everywhere. Obviously, we want to see housing produced citywide, considering the shortage.”
Why such a steep drop?
The downward projections come at a time when Angelenos continue to struggle with the city’s entrenched housing crisis. Most L.A. residents are renters, and most renters are paying more than 30% of their income on housing costs, a level the federal government deems unaffordable.
Clara Karger, a spokesperson for the mayor’s office, said the decline in the city’s affordable housing financing is the result of the sunsetting of Proposition HHH, passed by voters in 2016. That $1.2 billion bond measure has subsidized the creation of thousands of new permanent supportive housing units.
Measure ULA, the so-called “mansion tax” approved by voters in 2022, created a new source of affordable housing revenue. However, it has not increased the number of low-rent apartments in the city’s pipeline yet, officials said, because the measure continues to face litigation.
For now, they said, the city is taking a wait-and-see approach before committing money from Measure ULA to new…
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