A new real estate transfer tax won the approval of L.A. voters after being promoted as a “mansion tax.” No some real estate and development experts are saying that the new transfer tax will have a much broader impact on the real estate market.
“Just weeks after Los Angeles voters backed a new measure that puts a one-time transfer tax on property sales above $5 million to generate money for affordable housing and homelessness prevention, the city’s affluent homeowners are exploring potential ways of avoiding the tax,” reports Jack Fleming for the Los Angeles Times. Prop-development advocates in the city are also concerned about the measure’s likely effect on the development market in the nation’s second-most-populous city.
Measure ULA, as the voter-approved measure is called, imposed a 4 percent tax on sales of property valued at more than $5 million, increasing to 5.5 percent on property worth more than $10 million.
Jason Oppenheim of the Oppenheim Group is quoted in the article saying the 4 and 5.5 percent taxes amount to 20 to 30 percent of developer profits. “So those developers will choose to develop in other luxury communities where they won’t have to pay the tax, such as Beverly Hills, West Hollywood or Newport Beach.”
Shane Phillips, Housing Initiative Project Manager for UCLA’s Lewis Center, is also quoted in the article explaining his opinions of the measure’s effect likely effect on the development.
“[G]iven L.A.’s housing shortage, he thinks developers building new, mixed-income multifamily construction should be exempt from the tax, or else they might be discouraged from building such housing. As it stands, developers who buy land for less than $5 million and then construct multifamily housing on it, likely pushing its value above $5 million, would owe the transfer tax whenever they sell the property,” writes Fleming.
Phillips and others from the Lewis Center, have published a pair of reports on the expected effects of Measure ULA in recent months:
FULL STORY: L.A.’s rich are already scheming ways to avoid new ‘mansion tax’
LA ‘Mansion Tax’ Yielding Less Revenue Than Predicted
The tax on property sales above $5 million has brought in less revenue last year than experts projected, but the measure could still become a significant contributor to affordable housing funds.
New Los Angeles Rent Relief Program Targets Pandemic Debt
The program prioritizes the lowest-income tenants who accrued debt during the early part of the pandemic.
Lawsuit Filed to Halt L.A.’s Mansion Tax
The Howard Jarvis Taxpayers Association is among the groups suing to block the city of Los Angeles’ voter-approved ‘mansion tax.’
Planetizen Federal Action Tracker
A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.
Chicago’s Ghost Rails
Just beneath the surface of the modern city lie the remnants of its expansive early 20th-century streetcar system.
Amtrak Cutting Jobs, Funding to High-Speed Rail
The agency plans to cut 10 percent of its workforce and has confirmed it will not fund new high-speed rail projects.
Ohio Forces Data Centers to Prepay for Power
Utilities are calling on states to hold data center operators responsible for new energy demands to prevent leaving consumers on the hook for their bills.
MARTA CEO Steps Down Amid Citizenship Concerns
MARTA’s board announced Thursday that its chief, who is from Canada, is resigning due to questions about his immigration status.
Silicon Valley ‘Bike Superhighway’ Awarded $14M State Grant
A Caltrans grant brings the 10-mile Central Bikeway project connecting Santa Clara and East San Jose closer to fruition.
Urban Design for Planners 1: Software Tools
This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.
Planning for Universal Design
Learn the tools for implementing Universal Design in planning regulations.
Caltrans
City of Fort Worth
Mpact (founded as Rail~Volution)
City of Camden Redevelopment Agency
City of Astoria
City of Portland
City of Laramie