The Los Angeles City Council decided Tuesday to delay voting on proposed reforms to the city\u2019s embattled \u201cmansion tax.\u201d<\/p>\n
The tax has staunch defenders<\/a>, but a number of economic studies have found that it\u2019s slowing housing development at a time when L.A. is grappling with a severe housing shortage.<\/p>\n Instead of sending Measure ULA back to voters with proposed changes, the council decided to refer the idea to their Housing and Homelessness Committee for further debate.<\/p>\n Councilmember Nithya Raman, chair of the committee, introduced a motion last week<\/a> that sought to put a reform measure on the June ballot. Her proposal would have asked voters to cancel the tax on apartment buildings constructed within the last 15 years, exempt Palisades Fire victims<\/a> from the tax and change financing terms in city-funded affordable housing projects.<\/p>\n Learn the ins and outs behind L.A.’s housing crisis.<\/p>\n Sign up for Building Your Block, a seven-issue newsletter course from LAist that explains the obstacles around housing development in L.A. and what you can do to make things better.<\/p>\n \u201cVoters were sold a mansion tax,\u201d Raman said during Tuesday\u2019s council meeting. \u201cIgnoring the very real impacts on apartment construction \u2014 apartments that people want and need and want to move into \u2014 doesn\u2019t protect Measure ULA. It weakens it.\u201d<\/p>\n How the \u2018mansion tax\u2019 works<\/p>\n Measure ULA was approved by nearly 58% of L.A. voters<\/a> in 2022. It levies a 4% tax on real estate sales over $5.3 million and a 5.5% tax on properties selling for more than $10.6 million.<\/p>\n The city uses tax revenue to fund tenant aid programs, such as eviction defense and rent relief. And it subsidizes the construction of affordable housing, though most of the funds raised for that purpose have not yet been spent.<\/p>\n Supporters rallied outside City Hall before the Tuesday vote, urging City Council members not to send Measure ULA back to the voters with proposed changes.<\/p>\n \u201cWe believe it’s working,\u201d said Carla De Paz, a steering committee member of the United to House L.A.<\/a> coalition. \u201cEvery day we hear the stories of the tenants who are staying housed, who are not being evicted, who are getting the services they need.\u201d<\/p>\n De Paz said putting Measure ULA back on the ballot would detract from efforts to better the city\u2019s implementation of affordable housing and tenant aid programs.<\/p>\n \u201cThe harm is that we’re spending a lot of time trying to amend something that doesn’t need fixing,\u201d she said.<\/p>\n Reform would reduce revenues by around 8%<\/p>\n Housing policy researchers contend that the measure does need fixing. They point to a number of studies showing that because the \u201cmansion tax\u201d also applies to new apartment complexes selling for more than $5.3 million, housing development has slowed in the city relative to other parts of L.A. County.<\/p>\n One UCLA and RAND study found<\/a> that L.A. would likely have more affordable housing units \u2014 like those bundled in with many market-rate projects \u2014 if the tax did not apply to new apartments. That study<\/a> also estimated that canceling the tax during the first 15 years of an apartment building\u2019s life would reduce total revenues by 8% because most sales happen in older properties.<\/p>\n