City Council

(22) 24-0544 HOUSING AND HOMELESSNESS and PERSONNEL AND HIRING COMMITTEES’ REPORT relative to a Middle-Income Affordable Housing Pilot Program, and related matters. Recommendation for Council action: ADOPT the following in lieu of the recommendations listed in the October 20, 2025 Los Angeles Housing Department (LAHD) report: 1. AUTHORIZE the General Manager, LAHD, or designee, to amend the Affordable Housing Bond Policies and Procedures approved by City Council in August of 2019 to allow for the creation of a Middle-Income Pilot Program to operate within the boundaries of the City of Los Angeles that could utilize partnership with a conduit issuer to issue governmental bonds for the purpose to develop, acquire, and operate real property assets; and to impose covenants or regulatory agreements limiting the occupancy of housing units in such properties to families with incomes between 50% and 120% of the area median income for Los Angeles County, to be leased at affordable rental rates to such families with rents capped at 4 percent annually. 2. INSTRUCT the LAHD to address the following when the Bond Guidelines are amended and to submit the Conduit Issuer Bond Guidelines to the City Council for approval before any bond is issued: a. To issue, the bond, the City will have no liability b. That Possessory Interest tax will not ever become the responsibility of the tenant or the City but will be the responsibility of the developer should it be required. c. That future potential property taxes are offset by other taxes and tenant savings d. Construction completion will be protected by performance bonds, insurance and completion reserves. 3. DIRECT the LAHD to report back with the value of potential loss of tax revenue, if any. 4. INSTRUCT the LAHD to report back within 30 days on the parameters of the Los Angeles County Affordable Housing Solutions Agency social bond program and how it interrelates to the creation of a City-led Middle-Income Pilot Program. 5. INSTRUCT the LAHD to report back during the FY2026- 27 Budget process on staffing needs for this pilot program. Fiscal Impact Statement: The LAHD reports that there is no General Fund impact for the requested position, Financial Development Officer II, to develop the expertise to manage the pilot program, select partnership entities, and monitor investments. The cost of this position is $178,538.65 to be paid from the Municipal Housing Finance Fund No. 815. These middle-income projects are exempt from property taxes and could potentially replace other developments that would contribute property tax revenue. In 2024, property tax revenue represented 34.64% of total revenue for the City’s General Fund.