The Los Angeles City Council recently voted 9-5 in favor of placing a measure on the November ballot to address concerns about the city’s “mansion tax,” formally known as the ULA measure. This tax, levied on real estate sales over $5.3 million, was criticized for discouraging affordable housing construction. Council President Marquise Harris-Dawson noted a significant decline in housing starts since the ULA took effect in 2023, contrasting the situation with nearby cities where such taxes don’t apply.
Councilors Tim McCosker and Katie Yaroslavsky proposed a ballot measure to exempt multifamily and mixed-use buildings under ten years old from the tax. The measure still needs further votes to qualify for the ballot, and could be repealed before final approval.
While reform advocates welcomed the council’s decision, they emphasized that more reform is necessary. The proposed changes aim to mitigate the financial burdens that the ULA tax places on multifamily developments. However, tax proponents warned that altering the tax structure might lead to significant revenue losses for affordable housing initiatives.
In addition to the mansion tax-related measures, another proposal to exempt Pacific Palisades homeowners from taxes after a recent fire was also advanced. The situation is complicated by a separate measure from the Howard Jarvis Taxpayers Association aimed at eliminating the mansion tax altogether and making it harder to implement new taxes.
Measure ULA has raised around $1.2 billion over the last three years, but city officials have struggled to allocate these funds effectively for their intended housing-related purposes.
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