LOS ANGELES, California — L.A. Mayor Karen Bass said Tuesday that she and the City Council are considering ways to suspend Measure ULA, a controversial real estate transfer tax, during the effort to rebuild areas destroyed by recent wildfires.
Several state and federal lawsuits have called Measure ULA’s constitutionality into question. Tuesday marked the first time that Bass has publicly acknowledged the possibility of suspending the tax.
“We’re looking into that,” Bass said, in response to a question from Breitbart News at a press conference. “Because there’s two schools of thought. One is, is that can’t happen, it has to go back to voters. And the other is, is that it might be able to happen, with action from the council and the mayor’s office. So we’re having that investigated through our attorneys right now.”
As Breitbart News noted earlier Tuesday, Measure ULA has been a drag on the local real estate market, and repealing it could encourage rebuilding:
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.
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The Los Angeles City Council voted to spend the majority of its $168 million in Measure ULA funds for the 2024-5 fiscal year on “social housing,” in which tenants buy the apartment buildings in which they live, and manage them.
Funds were also spent on non-governmental organizations, and on overhead costs — rather than directly benefiting the economy.
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At a time of such devastation for so many, suspending or repealing Measure ULA could pump oxygen into a real estate market that has been strangled by an ineffective tax — one that has discouraged development and killed the jobs that accompany that development.
Bass was touring one of four Impacted Worker and Family Recovery Centers set up by the city to help workers who lost jobs due to the fires and who do not necessarily reside within the boundaries of the fire zone.
Many of the stores and office buildings where those workers were employed were destroyed in the fire — and would likely be taxed under Measure ULA, when sold.
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 Agenda: What Trump Should Do in His First 100 Days, available for pre-order on Amazon. He is also the author of The Trumpian Virtues: The Lessons and Legacy of Donald Trump’s Presidency, now available on Audible. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
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