A City Council committee voted Friday to shelve a proposed ballot measure aimed at cutting L.A.’s \u201cmansion tax\u201d nearly in half. <\/p>\n
The ad hoc committee on Measure ULA voted 2-1 to set aside a proposal by Councilmembers John Lee and Marqueece Harris-Dawson that would have asked voters in November to reduce the ULA transfer tax rate for multifamily and mixed-use properties to somewhere between 2% and 3.5%, down from the current rate of up to 5.5%. <\/p>\n
However, the ballot measure proposal was also referred to the City Council\u2019s rules, elections, and intergovernmental relations committee, which could still choose to move it forward.<\/p>\n
Instead, the ad hoc committee advanced a narrower pilot program that would reduce the property transfer tax only for newly built affordable housing projects. <\/p>\n
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The pilot program won’t need voter approval in the form of a ballot measure. Committee Chair Ysabel Jurado, who introduced the substitute language, said she believes the city should avoid a ULA ballot measure because it\u2019s still too early to evaluate the measure\u2019s long-term effects. <\/p>\n
\u201c\u200aI’m against going to the ballot, but I’m for making fixes that make this better,\u201d Jurado said.<\/p>\n
Voters will see a separate proposal <\/a>on their ballots by the Howard Jarvis Taxpayers Association to effectively repeal Measure ULA.<\/p>\n If the L.A. City Council does not approve reforming the measure, the only decision on the ballot in November may be whether to keep the mansion tax in its current form or end it. <\/p>\n About the mansion tax<\/p>\n L.A. voters approved Measure ULA in 2022<\/a> to fund affordable housing and homelessness prevention. The measure taxes real estate sales over about $5 million. Since taking effect in April 2023, ULA has raised just over $1.1 billion from 1,633 real estate transactions, according to the city\u2019s housing department<\/a>. <\/p>\n The city projects it will generate about $500 million in the coming fiscal year \u2014 about half of what proponents initially promised. It has funded about 800 new affordable units and helped stabilize thousands of renters facing eviction, according to the housing department.<\/p>\n But critics say the tax has suppressed housing development. Several studies link<\/a> the tax to a slowdown in apartment construction in Los Angeles, but ULA supporters say high interest rates and broader economic conditions are to blame. <\/p>\n The City Council’s ad hoc committee on Measure ULA was formed earlier this year to study how the measure is working and develop potential reforms. That work took on more urgency inside L.A. city hall after the Howard Jarvis Taxpayers Association qualified a statewide ballot measure for November<\/a> that would effectively repeal Measure ULA entirely.<\/p>\n Joe Donlin, director of the United to House LA coalition, which campaigned for the original measure, said the City Council committee made the right call by rejecting broader exemptions.<\/p>\n \u201cBy not taking up the extreme calls for broad, 15-year waivers that could cost the program about a third of its revenue, the committee acknowledged that ULA is working,\u201d Donlin said in a statement.<\/p>\n A separate group of housing developers, union workers and advocacy groups calling itself the \u201cMend It, Don\u2019t End It\u201d coalition has been urging city hall to make changes to ULA. On Friday, the group said it supports the measure, but believes targeted reforms are still needed. <\/p>\n \u201cIndependent research shows that Measure ULA has slowed housing production in Los Angeles at a time when we need more housing, not less,\u201d said Melanie Mendoza, a coalition spokesperson.<\/p>\n What the data show <\/p>\n