Part 3: The Money and the Mechanisms from Letters to the Housed by Paul Asplund of Second Grace LA

Vision for LA 2028: Vienna-model social housing featuring sustainable design, transit connectivity, and community gardens—11,700 units possible before the Olympics with $700M in available funding.

Part 3:The Money & The Mechanisms

How LA Can Build Vienna-Style Social Housing Now

Introduction: The Money Is Already Here

If you've read this far, thank you. This is Part 3 of our series on building social housing in Los Angeles by 2028, and it will be the most detailed. I'm going to cover everything I've learned about financing Vienna-style social housing in LA.

I was most surprised to find how doable this actually would be. We have SO MUCH MONEY in LA—billions of dollars floating around and, when it comes to housing, usually into the pockets of profiteers. Well, enough is enough. People are literally dying on the streets every day from homelessness and all its attendant risks. It's unconscionable to me, as I've said in almost every article I've written.

We need to end the affordable housing crisis, so why not choose the most cost-effective and humane solution? I've read most of the arguments against building social housing, and my resolve is greater than ever. So read on, and keep in mind that Radical Hope makes all things possible.

The Crisis and The Solution

In parts 1 and 2, we established the crisis and the solution:

We need 500,000 affordable housing units
Commercial developers are walking away
The Olympics give us less than three years and force a choice: hide people like Paris did, or house them like Vienna has for 105 years

Every article I read against building affordable housing boils down to this question: "Where's the money coming from?"

Every article I read in favor tells me it's already here. We just need to redirect it.

The Reality of Available Funding

As I mentioned in parts 1 and 2:

Los Angeles voters approved Measure ULA in November 2022, generating $270-300 million annually
Pacific Palisades is being rebuilt—$20-22 billion in property, 16.5 million square feet of development
The Olympics will generate an estimated $700 million-$1 billion in revenue
The Transit Connector project received $1 billion in federal funding in January 2025

At current rates, we're building only 17,000 units annually when we need 57,080. LIHTC developments cost $708,000 per unit—the highest in the nation—with affordability that expires after 30 years.

Let's dig deeper and explore where the money is now and what we can do with it.

FUNDING STREAM 1: Measure ULA

Current Status

Measure ULA imposes a 4% transfer tax on property sales between $5-10 million and 5.5% on sales exceeding $10 million. Implementation began April 1, 2023. As of December 2024, the measure has collected $480 million.

Annual projections:

FY 2024-25: $271.1 million
FY 2025-26: $301.1 million

November 2024 set a record with $40 million collected in a single month.

Current Allocation

The ordinance mandates a 70/30 split:

70% to affordable housing ($189.7 million annually)
30% to homelessness prevention ($81.4 million annually)

Within the affordable housing allocation, $100 million is specifically designated for Alternative Models including social housing, community land trusts, and limited equity housing cooperatives. Twenty percent of units must serve households earning 0-30% of Area Median Income. Up to 20% market-rate units are permitted for financial viability.

Vienna-style social housing is already embedded in Measure ULA with $100 million allocated.

The Leverage Factor

In its first 18 months, Measure ULA funded 795 affordable housing units across 9 projects:

Total ULA funding: $54.7 million
Total combined investment: $514.8 million

For every $1 of ULA funding, the city leveraged $10 from state, federal, and private sources.

This 1:10 leverage ratio means $270 million in annual ULA funding becomes $2.7 billion in total investment capacity.

Vienna's annual housing budget is €450-470 million ($258 per capita) for 1.9 million residents. LA needs $1.0 billion annually to match Vienna's per-capita investment. At $2.7 billion through ULA leverage, we exceed Vienna's rate.

So, we have all the money we need.

What Can Be Done Now to Move Things Forward

The following actions don't require voter approval, just City Council action:

Increase Alternative Models allocation from $100 million to $150-180 million annually
Establish a Public Development Authority similar to Seattle's Social Housing Developer
Launch a land banking program using ULA capital for strategic acquisition
Streamline permitting for social housing projects (12-18 months maximum)
Accelerate spending of the $435 million sitting unspent

If we can rebuild Terminal 5 at LAX, we can certainly build 5,000–10,000 units of affordable housing.

Immediate Actions for Q4 2025 / Q1 2026

Ask City Council to revise expenditure plans to increase Alternative Models allocation to $150-180 million annually
Establish a Public Development Authority with independent authority
Direct $100 million toward 3-5 flagship projects using Vienna's four-criteria model
Partner with existing community land trusts: LA Community Land Trust, T.R.U.S.T. South LA, Fideicomiso Comunitario Tierra Libre
Publicize early successes to build public support

FUNDING STREAM 2: Pacific Palisades Reconstruction

The Opportunity and Current Reality

The January 2025 Palisades Fire destroyed $20-22 billion in property values:

Approximately 5,000 single-family homes averaging $4+ million
74 apartment buildings with 870 units
67 retail buildings
26 office buildings

All of this property will be rebuilt—16.5 million square feet of development over the next several years.

Existing Legal Framework

LA already has an affordable housing linkage fee structure (effective June 2018):

$8-15 per square foot for residential development
$3-5 per square foot for commercial development

Maximum legally justifiable fees were calculated at $42-74 per square foot—meaning there's legal headroom to increase if needed.

Revenue Potential

Estimated total rebuilding:

15,000,000 sq ft residential
870,000 sq ft multifamily
595,000 sq ft commercial
Total: 16.5 million sq ft

Using high-market designation ($15/sq ft residential, $5/sq ft commercial):

Residential: $225 million
Commercial: $3 million
Total potential: $228 million

Implementation Strategy

Tiered requirements:

Large projects (50+ units or $10+ million): 10-15% affordable units OR in-lieu fee at full rate
Medium projects (10-49 units or $2-10 million): 5-8% affordable units OR lower in-lieu fee
Small projects (under 10 units or under $2 million): Voluntary participation with incentives

Alternative compliance options:

Land dedication valued against fee obligation
Off-site construction elsewhere in LA
Contribution to regional affordable housing fund
Long-term deed restrictions on existing units

FUNDING STREAM 3: Olympic Legacy Fund

Projected Olympic Revenue

The LA 2028 Olympics projects:

$5-6 billion in revenue
$4-5 billion in expenses
Potential surplus: $700 million-$1 billion

The "no-build" approach using existing venues and UCLA dormitories eliminates typical $2-10 billion in construction costs.

Instead of the debt usually left behind by most Olympics, the LA 2028 Olympic legacy is housing.

Structure of the Fund

Capitalization: Dedicate 10-15% of Olympic surplus ($70-150 million) to permanent affordable housing

Strategic use as permanent capital: Capitalize revolving loan funds where initial capital creates loans to limited-profit housing associations

Leverage multiplier: At 1:10 ratio, $100 million generates $1 billion total investment—2,000 units at $500,000 per unit

Geographic distribution: Prioritize housing along the $2 billion Transit Connector

Timing: The city borrows against projected Olympic revenue in late 2025/early 2026

THE INTEGRATED FUNDING STRATEGY

Combined Investment Through Summer 2028

Measure ULA ($180M annually):

Direct investment: $540 million (Q4 2025 - Q2 2028)
Leveraged at 1:10: $5.4 billion
Units: 9,000-10,800

Palisades reconstruction:

Direct revenue: $60-100 million
Leveraged: $600 million-$1 billion
Units: 1,000-1,700

Olympic funds:

Borrowed: $100-150 million
Leveraged: $1-1.5 billion
Units: 1,700-2,500

Short-term rental enforcement: 7,500 units recovered

Total capacity:

Direct public investment: $700-790 million
Total leveraged investment: $7-7.9 billion
Social housing units: 11,700-15,000
STR units recovered: 7,500
Total units impacted: 19,200-22,500

FINANCIAL SUSTAINABILITY MODEL

Five Principles

Public land banking: Allocate $50-100 million from ULA starting Q4 2025. Buy strategically. Never sell. Lease to developers at below-market rates.
Quality-focused competitions: Vienna keeps costs at €300-400K per unit versus LA's $708K through competitions evaluating social sustainability, architecture, environmental sustainability, and economic feasibility equally.
Maintain 1:10 leverage ratios through diverse funding sources, professional grant writing, strong project pipelines, and proven track record.
Establish revolving loan funds where initial capital creates 30-40 year loans at 1-3% interest. Montgomery County has done this since 1974.
Continuous production at 5,000-10,000 units annually achieves economies of scale.

CRITICAL SUCCESS FACTORS

Finding the Political Will

We need to:

Convince Mayor Bass to champion Vienna-style social housing as THE Olympic legacy
Convince City Council to pass ordinances in Q4 2025 / Q1 2026
Ensure sustained commitment through the Olympics and beyond

Vienna succeeded because Social Democrats held power for 15 years, then the model survived because it worked.

THE PATH FORWARD: Two Choices

Path 1: Business as Usual

Continue building 17,000 units annually (only 1,700 affordable) at $708,000 per unit
Take 27 years to meet state mandates
Result by 2028: 75,000+ people experiencing homelessness. Crisis worsened. Paris-style shame.

Path 2: Vienna Model with Olympic Urgency

Redirect Measure ULA to $180M annually
Apply strengthened Palisades requirements
Dedicate Olympic surplus
Enforce STR regulations
Build 11,700-15,000 social housing units by 2028
Result by 2028: Substantial social housing occupied plus 7,500 STR units recovered. Homelessness visibly declining. Model proven to international audience.
Result by 2045: 100,000+ Angelenos in permanent social housing. 10-15% of city population. Vienna-style mixed-income communities throughout LA.

THE NEXT SIX MONTHS

We're in Q3 2025. The Olympics are less than three years away. The window for Palisades capture has narrowed, but substantial opportunity remains.

If City Council acts in Q4 2025 / Q1 2026 on ordinances for:

Strengthened Palisades requirements
Measure ULA reallocation
Public Development Authority creation
Olympic Legacy Fund dedication
Streamlined permitting
STR enforcement

Then by summer 2028, LA will have substantial social housing occupied and permanent infrastructure producing 5,000-10,000 units annually for decades.

CONCLUSION

We have less than three years and funding of $700-790 million identified and available. Vienna proved the model works for 105 years. The Olympics create urgency. The opportunity exists through Measure ULA plus remaining Palisades reconstruction plus Olympic surplus.

What we need is collective will to:

Pass ordinances in Q4 2025 / Q1 2026
Redirect funding toward permanent solutions
Establish infrastructure
Acquire land
Launch competitions
Break ground in early/mid 2026
Have substantial units occupied by summer 2028

To show the world that American cities can build social housing. That Olympics can solve crises rather than create them. That another way is possible.

Vienna did it from post-war devastation. Los Angeles can do it from wealth and abundance.

Take Action

This concludes this series on Vienna-style social housing in LA. For more information:

GPLA.co (Vienna model)
ulacoc.org (Measure ULA)

Contact your City Council member and Mayor Bass's office to advocate for Vienna-style social housing.

AUTHOR'S NOTE: This article draws heavily on the Vienna social housing model as documented by multiple academic sources, housing policy researchers, and direct studies of Vienna's system. All statistics about Vienna's housing are from Austrian government sources (Statistics Austria) and peer-reviewed research. Comparisons to U.S. housing models come from HUD documentation and housing policy organizations like Shelterforce and Funders Together to End Homelessness.

This document contains 66 numbered citations with sources drawn from over 200 authoritative references including government reports, academic research, news articles, and policy analysis.