Researchers say LA\u2019s \u2018mansion tax\u2019 hurts new housing. Voters could get a chance to tweak it<\/p>\n
Los Angeles voters could soon get another chance to weigh in on Measure ULA, better known as the city\u2019s \u201cmansion tax.\u201d<\/p>\n
Los Angeles voters could soon get another chance to weigh in on Measure ULA, better known as the city\u2019s \u201cmansion tax.\u201d<\/p>\n
First approved by voters in November 2022, the measure<\/a> has taxed real estate selling for more than $5 million. It funds tenant protection programs and affordable housing construction.<\/p>\n But economists have found that because the tax also applies to apartments \u2014 not just mansions \u2014 housing developers are pulling back on building in the city compared to other parts of L.A. County. One UCLA study concluded<\/a> the city would have more low-income units on balance if the tax did not apply to new apartments.<\/p>\n Now, there\u2019s a new effort brewing at City Hall to change how the \u201cmansion tax\u201d works.<\/p>\n Learn the ins and outs behind L.A.’s housing crisis.<\/p>\n Sign up for Building Your Block, a seven-issue newsletter course from LAist that explains the obstacles around housing development in L.A. and what you can do to make things better.<\/p>\n City Councilmember Nithya Raman, chair of the council\u2019s Housing and Homelessness Committee, introduced a motion Friday to place a new measure on the June ballot. The ballot measure would ask voters to exempt recently constructed apartment buildings from the tax, among other changes.<\/p>\n \u201cWe’ve seen some real pressures on the market as a result of ULA,\u201d Raman told LAist. \u201cIt was sold to voters and talked about as a mansion tax. I don’t think it was intended to slow the construction of new apartments in a city with an acknowledged and widespread housing crisis.\u201d<\/p>\n Supporters of the tax say it\u2019s working as intended. They dispute<\/a> claims that ULA is responsible for slower housing growth in the city.<\/p>\n No council votes have yet been taken.<\/p>\n Local reform effort follows failed state bill<\/p>\n Supporters say the tax has funded eviction defense and rent relief programs. It has also produced the city\u2019s largest-ever pot of money for low-income housing development, though less than 200 apartments<\/a> have been completed and leased so far.<\/p>\n Joe Donlin, director of the group United to House L.A., called the latest reform effort \u201cirresponsible.\u201d<\/p>\n The proposed tax exemption for apartments built within the last 15 years would be \u201ca tax break for developers and billionaires,\u201d Donlin said.<\/p>\n \u201cThat would be giving money away from ULA programs that are protecting renters, that are keeping people from falling into homelessness, and building affordable housing,\u201d he said.<\/p>\n Raman\u2019s motion would also cancel the tax on homeowners affected by the Palisades Fire. Another change would restructure certain financing terms in order to attract traditional lenders to participate in ULA-funded affordable housing projects.<\/p>\n Many of the changes are similar to those proposed by state lawmakers in a bill that failed to advance<\/a> at the tail end of last year\u2019s legislative session in Sacramento.<\/p>\n Dueling effort at repeal is underway\u00a0<\/p>\n But those who support reform say without some changes, the tax could soon be thrown out entirely. The Howard Jarvis Taxpayers Association is collecting signatures for a separate ballot measure that would overturn not just Measure ULA, but similar taxes across the state.<\/p>\n