Origins of Measure ULA

The City and County of Los Angeles are experiencing a profound crisis in the availability of housing affordable to the poor of this community.  In the County more than 75,000 and in the City more than 45,000 persons are homeless on any given night.  It is a crisis that continues to worsen despite significant prior efforts to address it.  

We at Move LA believe that there is a moral imperative to ensure that our community finds or creates the resources needed to address these crises.  But, it is imperative as well that the program for use of those resources address not only the impulse for quick fixes that move people off the streets into shelters and interim housing, but also recognizes the need as well for strategies and interventions that prevent people from becoming homeless in the first place as well as programs that ensure a robust supply of permanent affordable housing. 

Having succeeded with the passage of Measure H in March of 2017, Denny Zane, Move LA Executive Director was pondering strategies they might pursue to provide significant resources to address both the affordable housing and homelessness crisis.  Zane was frustrated by the reluctance of both local and state political leaders to take any political risks to provide permanent resources on the scale needed.

Denny had been following the process in California courts that was heading toward a decision that local voter initiatives that raise taxes should be able to be approved by a simple majority vote, rather than a 2/3 vote.  The courts were saying that local voter initiatives were not governed by Proposition 13, a constitutional amendment approved by California voters in 1978.

Having succeeded in winning three LA County ballot measures previously, Zane and Move LA staff approached Frances Engler, Political Director of Unite HERE Local 11, and proposed the convening of a labor/community coalition to discuss a possible voter initiative in the City of LA to raise the robust funds needed to prevent homelessness and to develop affordable housing at scale.  Unite HERE agreed to co-host such a meeting at their LA offices. 

Invited to attend this meeting were representatives from organizations such as ACCE, ACT-LA, CLUE, Home for Good/United Way, Inquilinos Unidos, KIWA, LA Voice, One LA, Public Counsel, Saint Barnabas Senior Services, SAJE, SCANPH, The Urban and Environmental Policy Department/Occidental College, Venice Community Housing, and the Western Center on Law and Poverty.  Organized labor leaders were invited from the LA County Federation of Labor, the LA-Orange County Building Trades Council, IBEW Local 11, Laborers 300, Operating Engineers, AFSCME DC 36, SEIU UHW, SEIU-721, SEIU 2015, UCLA Labor Center, UFCW Local 770, as well as Unite HERE Local 11.     

The Need

It was clear to all gathered for the meeting at Unite HERE that communities throughout the region, including the City of Los Angeles, were experiencing a profound shortage of affordable housing and a profound crisis in the numbers of and hardships experienced by homeless persons.  Rents were rising rapidly for working families, eviction activity and displacement were increasing and evidence showed a significant out-migration of working families from the region.  The crisis enveloped communities throughout LA County as well as other communities in the SCAG region and the state of California. 

Those gathered discussed their understanding of the underlying problem that was creating the housing and homelessness crisis.   Two explanations had emerged for these crises, each with different implications for the solution: 

Explanation #1: There is a large overall shortage of housing in Los Angeles County fueled by population growth and underbuilding of housing; the solution requires allowing rapid expansion of the supply of all forms of housing including and especially market rate housing;  or....

Explanation #2: Housing costs in Los Angeles County have spiked because of a spike in demand, driven by a large influx of a higher income workforce over a relatively short period of time.  This has led to a  specific shortage of housing affordable to low and moderate income households.  This shortage can only be addressed in the near term by direct regulation of rents and major public investments in affordable housing and assistance to keep families in their current housing.

Explanation #1 was inconsistent with data showing that population growth had actually slowed in Southern California since 2000, and even now was declining.  And its solutions were speculative and not timely enough for the crisis the county faces.   It is more of an ideology than a strategy.

All gathered at the Unite HERE Local 11 office felt the urgency of the crises required focus on nearer term public investments, especially providing direct investments in affordable housing and assistance to homeless persons. 

Why Local Action?

Could we look to the State of California for the resources needed?  No, redevelopment was long gone and no new funding, especially ongoing funding, for affordable housing from Sacramento was on the horizon.   SB 5, the one bill that offered the greatest potential for real funding for affordable housing throughout California had been vetoed by the governor.  Thus, we must work to find resources and solutions locally…while we continue to pressure Sacramento. 

So, the key discussion became, how do we generate a winning local ballot measure to provide robust resources to invest in homelessness prevention and development of affordable housing?

Why a Voter initiative?

We all agreed that we must take advantage of the opportunity created by the then recent California court decisions that provide that revenue/tax measures qualified for the ballot as a voter initiative can win in California with a simple majority vote.  We must identify a significant and appropriate revenue source, develop an expenditure plan, and propose it to the voters of the City of Los Angeles. 

Such a voter initiative could raise funding for homelessness prevention and affordable housing development on the scale needed.   Success could provide a model for other California communities.

A local voter initiative can provide funding for homelessness prevention and development of affordable housing that can be both robust and reliable for the long term as compared to any action taken by a city council or county supervisors.   

Goals of the Measure

We believed we needed a measure that could create between $500 M/yr. and $1 B/yr. for homelessness prevention and affordable housing development in the City of Los Angeles, a measure whose revenue would likely grow thereafter. 

Guiding Equity Principle

Move LA had already successfully passed three sales tax measures mostly for transit system development and operation and for services to the homeless.  Simple equity requires we seek an alternative to the sales tax. 

In addition, while there were big time winners in the real estate market including owners of high-end properties, landlords and real estate speculators, there were many more losers, those paying excessive rents or those who are now homeless. 

We believed, and our partners agreed, that we should develop a tax that applies to inflated real estate values, taxing those most likely to benefit from our current “real estate roulette” and use those resources to help those most likely to be the loser/victims of that roulette. 

Afterall, a significant share of rising real estate values is not truly earned but is derived from the perceived quality of the community, its environs and services (location, location, location) and the development standards adopted by each community.   In truth, real estate values are largely conferred by the community and are especially appropriate to be taxed.

Some of the taxing options considered by the discussion

1. Tax windfall rental income on the highest rent multifamily residential properties.
2. Tax gross rental income on larger commercial, industrial and multifamily residential properties who are benefitting from real estate inflation brought on by the “digital goldrush.”
3. Tax high value properties when sold; such values have been escalated by that same digital goldrush.

Exemptions thought to be equitable and smart
Find a criteria that will exempt all or nearly all single-family homes and condos owned by natural persons.  In effect, then, the tax should fall primarily on owners of income producing properties or very high-end homes when sold.

Conducting polling and determining financial performance
Polling and financial analysis was conducted for each option.  The simple selection criteria:  we want the measure that generates the most revenue to invest in preventing homelessness and building affordable housing that also performs very well in voter polls while being able to be structured to minimize impacts on owners of family homes that were not part of a speculative enterprise.

Selection of preferred revenue option

The committee agreed that the preferred option was a measure that taxed high end properties when sold, termed a real estate transfer tax or a documentary transfer tax, in that it was likely to generate greater revenue than the other options and polled most favorably with voters and easily enabled exemptions for smaller value sales, most likely to be single-family homes. 

In addition, since both counties and cities universally collect this form of tax now, albeit at much lower rates, the challenges of initial implementation should be modest.

Based on recent performance of the existing real estate transfer tax and the levels of activities in the real estate market, generating over $800 M/yr. even as much as $1 B/year seemed possible, even likely – unless the market suddenly performs counter to historic trends.

Addressing equity for those employed in construction of affordable housing development 

The drafting committee worked for months to draft and re-draft language on a variety of topics from financing to eligible projects to implementation timelines. The drafting committee invited expertise from experts in housing, homelessness, tenant rights, labor rights, transit oriented development, and more. It was a collaborative process with serious debate, deep research, and honest conversations that, ultimately, resulted in a measure that is comprehensive in its approach. It also brought groups and organizers closer together.

It was also agreed that the men and women providing construction work for affordable apartment buildings over 40 units should operate under a Project Labor Agreement with the City of Los Angeles thus ensuring labor union membership and middle class wages for all such workers.  This agreement came out of negotiations between Chris Hannan of the LA-OC Building and Construction Trades Council and Alan Greenlee of the Southern California Association of Non-Profit Housers (SCANPH). 

Ballot measure expenditure program

• No more than 8% for program management and implementation
• 30% of remaining funds for prevention of homelessness, including income support for very-low-income seniors and disabled persons, income support for tenants in short term crisis, right-to-counsel for tenants threatened by unfair evictions, outreach to tenants to ensure they know the resources available to them.
• 70% of remaining funds for development of multifamily or mixed-use residential projects deed restricted for extremely-loe, very-low, low, and moderate-income households. 50% will be used for development of new affordable housing; 10% will be used for acquisition and rehab of existing rental housing; 10% will be used for home ownership strategies.

Creating the Campaign Committee

Upon the completion of the drafting of the measure itself and conducting polling which confirmed the likely ready support for the measure by Los Angeles city voters, a campaign steering committee was created with Laura Raymond, ACT-LA, and April Verrett, SEIU 2015, as co-chairs; Eli Lipmen represented Move LA; Joe Donlin, SAJE; Anne-Marie Otey, LA-OC Building Trades Council; Tommy Newman, the United Way; Alan Greenlee, SCANPH; Frances Engler, Unite HERE Local; Antonio Sanchez, IBEW Local 11.

Qualifying the Measure and Winning the Vote

After coming to an agreement on the substance of the measure and agreeing to inclusion of labor justice provisions, Chris Hannan, Executive Secretary of the LA-Orange County Building and Construction Trades Council announced the Trades were prepared to invest significant resources to qualify the measure for the ballot; Frances Engler of Unite HERE Local 11 indicated that the hotel and restaurant workers were prepared to incorporate signature gathering for the measure in their signature gathering and campaign activities for other local measures; SEIU 2015 indicated it would make a major commitment to the campaign as well. 

United to House L.A. collected over 98,00 signatures. The required number of valid signatures was 61,076. The petition was presented to the Los Angeles City Council, and on June 15, 2022, the city council voted 14-0 to place the measure on the November 2022 ballot.

The UHLA coalition that championed Measure ULA

The UHLA Coalition is a remarkably broad-based coalition of labor, including the building trades and the service sectors, and social justice, tenants’ rights and affordable housing advocates.  It is perhaps the most broad based and cohesive coalition in the history of the City of Los Angeles. The coalition grew organically and collaboratively, which is remarkable considering the different constituencies groups represented. However, all shared the same passion for addressing affordability and homelessness in our City and this focus created a unique and enduring opportunity to work together towards a common goal. Organizations that opposed each other on other policy issues or candidates came together to pass Measure ULA.

The level of engagement of each sector of the coalition was remarkable and is reflected in the diversity of the financial base for the measure:  Building Trades:  $1,350,000; Carpenters:  $250,000;  service sector labor:  $944,000;  social justice and affordable housing organizations:  $1,060,000;  Individuals: $50,000. A total of $3,654,000 was raised for the qualifying and winning the measure.

This is especially significant for the future of the City of Los Angeles, especially in light of the shift of city election dates from spring of odd-numbered years to November of even-numbered years.  City elections will now coincide with national and state elections which ensures that a much more Democratic and renter electorate will vote on the selection of the mayor, city council members and ballot measures. 

A true labor/community coalition for Los Angeles

We believe Measure ULA was the first victory of a newly emerging governing coalition in the City of Los Angeles.  It is  a true labor/community coalition where power and influence, as well as effort, is shared democratically among participants. This is a coalition which has mastered the fine arts of campaigning – including direct voter contact hand-to-hand, door-to-door, earned media, targeted direct mail, television and radio advertising, and digital media - which is likely to ensure a significantly more progressive governing agenda for the city of the future.