A ballot measure in Los Angeles Funding affordable housing by imposing a new tax on property sales or transfers over $5 million has been targeted by companies and real estate groups in an ad campaign calling it “the biggest property tax increase in the world.” ‘history of Los Angeles’.
This statement is false. The ULA measure is not a property tax, which is an annual assessment on all property that is used for general government functions. If passed by city voters on Nov. 8, the measure would be a one-time sales tax that would go into a special fund dedicated to the city’s housing and homelessness crisis.
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“Calling it a property tax is a dishonest attempt to scare off landlords,” said Peter Dreier, a Occidental College professor who co-wrote a report on the measure’s impact and is part of United to House LA, the group working for his passing. “Nobody’s property taxes will be affected,” Dreier said.
California cities and counties actually have no authority to raise property taxes. This can only happen if state voters amend Proposition 13 with a statewide constitutional amendment.
The study by Dreier and researchers from UCLA, USC and Occidental estimated that Measure ULA would affect less than 3% of sales of single-family homes and condominium units. Indeed, in the 2021-22 fiscal year, only 727 homes and condos sold for more than $5 million, or 2.6% of the 28,378 homes sold in the city.
According to the study, the measure would generate about $900 million a year that would be used to build more housing for low-income people and provide rent relief to vulnerable tenants, especially seniors. The ballot measure includes a provision to create an oversight board to ensure funds are used as required by the measure.
Measure ULA is supported by the United Way of Greater Los Angeles, numerous community and tenant advocacy groups, nonprofit developers of affordable housing, nonprofit homeless service providers, labor unions, and many faith groups.
The two opposition committees leading the anti-ULA campaign are called Angelenos for Affordability and Angelenos Against Higher Property Taxes. The largest donors to date, according to documents filed with the Los Angeles Ethics Commission, include:
- The California Business Roundtable, the state’s largest business lobby group ($2,276,098)
- Westfield Property Management, which owns 82 shopping centers worldwide, including Westfield Century City, and intends to sell all of its shopping centers in the United States by next year ($541,118)
- National Association of Realtors, the national lobby group for real estate agents ($544,328)
- California Association of Realtors, the state lobby group for real estate agents ($469,000)
Other six-figure donors include the California Business Properties Assn. ($300,000), commercial real estate lobby, self-storage company Public Storage ($395,000), developer Hudson Properties ($250,000) and real estate investor AP Properties ($100,000).
The California Business Roundtable has also received direct support from opponents of Measure ULA. For example, in addition to its $50,000 direct donation to the anti-ULA campaign, Kilroy Realty in October donated $555,000 to the California Business Roundtable PAC. Similarly, Douglas Emmett Properties, which directly contributed $50,000 to the anti-ULA campaign, recently donated $1,000,000 to the California Business Roundtable PAC.
Blackstone — the real estate investment and private equity firm — has not made direct contributions to any of the anti-ULA committees, but on July 1 it donated $1 million to the California Business Roundtable PAC . Blackstone became one of the biggest landlords in the country after buying a large inventory of properties after the 2008 housing crash, when many owners faced foreclosure. It has bought at least 82,000 homes, including thousands in LA A UN report on Blackstone says its subsidiary Invitation Homes has raised rents to nearly double the Los Angeles average.
The California Business Roundtable did not respond to requests for comment.
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