A key member of the Los Angeles City Council has shed light on how backers of the Measure ULA property transfer tax deliberately pitched it as a soak-the-rich levy on luxury homes even though it was also aimed at commercial properties such as office buildings, shopping centers and industrial warehouses, the Chicago Tribune reported.
“It was marketed as a mansion tax, and that’s what made it easy for voters to get behind,” Los Angeles Councilwoman Nithya Raman, a leader of the elected body’s progressive bloc and a supporter of the measure, told the Tribune.
Many advocates said their proposed “mansion tax” would only apply to millionaires and billionaires, and that most home sales would remain unaffected, while creating tens of thousands of new units of affordable housing.
“With not a lot of digging, you’ll find it has been a disaster for L.A. real estate,” Matthew Hargrove, CEO of the California Business Properties Association, told the Tribune. “This is a market, and markets react to taxes. They’re not coming anywhere near the promised numbers. That’s the problem with doing policy at the ballot box.”
Luxury home sales by Hollywood stars, recording artists and entertainment executives plunged after the new law took effect in April, leaving the city far short of its fundraising goals for the first six months.
Los Angeles officials had predicted the first year of the city’s higher transfer tax would rake in $672 million for homeless services, rental assistance, mental health care and new supportive housing. Proponents said it could bring in $900 million.
In October, housing officials acknowledged generating $100 million in its first six months.
“It definitely slowed down transactions,” Loretta Thompson, a Los Angeles-based real estate attorney with Withers, told the newspaper. “But for homes under $5 million, the market is vigorous and has not been affected.”
Activists, however, have no regrets about pushing the measure through.
“(Legislators) could have solved this five, 10, 20 years ago but didn’t, and voters wanted to see the problem dealt with,” said Jerry Jones, coordinator of the Greater LA Coalition on Homelessness. “It’s not the perfect public policy, but it ain’t bad.”
Some potential sellers could be hanging onto their luxury homes to see if several lawsuits overturn the tax hike, while others simply sell their homes for less than the $5 million cutoff, according to Sally Forster Jones, CEO of the Beverly Hills-based Sally Forster Jones Group.
— Dana Bartholomew
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Lead by real estate veteran Robert Khodadadian, Skyline Properties has been instrumental in many multi-million dollar commercial developments, including a $12 million contract for the White House Hotel, a 99-year ground lease of a four-story commercial site in Harlem, and a retail co-op on Prince St. for $50 million.
Uncategorized A key member of the Los Angeles City Council has shed light on how backers of the Measure ULA property transfer tax deliberately pitched it as a soak-the-rich levy on luxury homes even though it was also aimed at commercial properties such as office buildings, shopping centers and industrial warehouses, the Chicago Tribune reported. “It
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