Los Angeles officials are prepared to make changes to the city’s so-called mansion tax as it launches a review that could reshape one of the region’s most controversial real estate policies.
On Wednesday, the Los Angeles City Council unanimously approved a motion to create a three-member ad hoc committee to examine and recommend changes to Measure ULA, the 2022 voter-approved transfer tax on property sales above $5.3 million, My News L.A. reported. Council president Marqueece Harris-Dawson introduced the motion earlier this month with Council member Ysabel Jurado, citing concerns the tax may be dampening housing production.
Despite its nickname, the tax applies broadly to large property transactions, including apartment buildings, office properties and development sites and not just luxury homes. Harris-Dawson said the committee’s goal is to preserve the intent of the ballot measure while addressing elements that may be undermining housing supply.
“I want to be clear that it’s the full intention to stay in keeping with the spirit of the voters,” Harris-Dawson said, per My News L.A. “There are things in ULA that I frankly think were not in the spirit of the voters, like taxing the building of affordable housing as one example.”
Studies on the matter, including one from the University of California, Los Angeles, have borne out the idea that ULA slowed apartment construction. Researchers estimate that ULA is preventing the construction of at least 2,000 market-rate units each year, as well as hundreds of affordable units, per My News L.A. At the same time, Measure ULA has been a boon for the city’s coffers; earlier this year, the city crossed the milestone of $1 billion raised via the transfer tax.
Supporters of the measure urged caution about weakening what they view as a critical funding source for housing and homelessness programs. “Right now, special interest groups are attempting to subvert voters through manufactured corporate panic,” Council member Eunisses Hernandez said. “We cannot allow greed to dismantle the progress made in making a dent in the eviction to homelessness pipeline.”
The City Council referred proposals to tweak Measure ULA back to committees in January. The ad hoc committee will now review those pending changes to the measure and is expected to dissolve by April 30 unless the council extends it.
Meanwhile, Council member Nithya Raman, who chairs the Housing and Homelessness Committee and is running for mayor in the June 2 primary, has floated a separate proposal to alter the measure via a June ballot initiative. Under Raman’s plan, newly built multifamily, commercial and mixed-use projects would be exempt from the tax for up to 15 years, and properties damaged by disasters would receive temporary exemptions.
— Chris Malone Méndez
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