Los Angeles Mayor Karen Bass withdrew a legislative proposal this week to repeal Measure ULA, a so-called “mansion tax” that has undermined the housing market and slowed rebuilding in fire-ravaged areas.
Breitbart News explained the background to the tax earlier this year:
Measure ULA was sold to voters as a “mansion tax,” but in practice it applies to all kinds of real estate — hospitals, factories, office buildings, and smaller homes that family landlords often use to provide an income for themselves.
Breitbart News noted in early 2023 that Measure ULA requires the city “to collect a 4% tax on sales over $5 million, and a 5.5% tax on sales of property worth $10 million or more.” (The minimum thresholds have seen been raised, incrementally.) It was supposed to raise $900 million annually, and it was sold to voters under the notion of helping the homeless.
But the tax was a flop. One month after it went into effect — appropriately — on April 1, 2023, the tax killed the high end real estate market in L.A.
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Moreover, as wealthy homeowners pulled property off the market, Measure ULA has failed to bring in even half of what it was supposed to raise, partly because it has slowed transactions.
Because Measure ULA slows high-end transactions, it discourages the sale of some lots in areas hit by the Palisades Fire in January, and also discourages developers from investing in new rebuilding projects.
In March, responding to a question by Breitbart News at a press conference, Mayor Bass said that the city was looking into ways to repeal Measure ULA.
However, the Los Angeles Times reports, those efforts have faltered:
Bass had worked with Sacramento legislators to draft a last-minute overhaul of Measure ULA, a tax hike on L.A. property sales above $5.3 million, preparing a bill that would reduce taxes charged on the sale of recently built apartment buildings, shopping centers and warehouses.
The bill had been scheduled to go Thursday before the state Assembly’s local government committee, which is chaired by State Assemblymember Juan Carrillo, D-Palmdale. Shortly before that meeting, Bass issued a statement saying she had decided to pull the bill and try again in January.
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Because the bill was submitted late in this year’s legislative session, lawmakers were no longer permitted to make technical fixes that “got missed” during the drafting of the bill, said former State Assembly Speaker Bob Hertzberg, who was tapped by Bass to hammer out the details of the ULA overhaul.
The proposal will supposedly be re-introduced next year, though it will still face opposition in the council. Supporters of the tax say that it was passed by referendum in 2022 and therefore only voters can repeal it.
The tax could also end if the city would stop defending it in court, where it has been challenged on the grounds that it violates California’s constitution, notably property tax caps under Proposition 13.
Meanwhile, the “mansion tax” persists, as does Bass’s habit of failing to deliver on her promises. She pledged earlier this year to eliminate fees for permits to rebuild homes in the Palisades Fire area, but the proposal has not even come before the city council yet.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of The Zionist Conspiracy Wants You, now available on Amazon. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
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