Los Angeles voters will soon decide whether to add a tax on high-end home sales and some commercial properties to fund housing for low-income residents.
The City Council voted unanimously to put a measure on the November ballot to tax sales of homes and commercial properties of more than $5 million to fund programs to create affordable housing and prevent homelessness, the Los Angeles Daily News reported.
Approval of the measure would add a 4 percent tax on the sale or transfer of properties valued between $5 million and $10 million, and a 5.5 percent tax on the transfer of properties worth more than $10 million.
The ballot measure known as “House L.A,” would affect the sales of high-priced homes and other real estate sales, including commercial properties. The initiative aims to raise $800 million a year to create an estimated 26,000 homes over the next decade.
Affordable housing groups would be exempt from paying the extra tax.
The proposed ordinance would create a citizen oversight committee to develop funding guidelines, conduct housing-needs assessments, monitor program implementation and audit fund expenditures.
Tracy Hernandez, CEO of the business group BizFed, says it is “formally opposed” to the tax. She said that “the city’s already hurting” and the tax could impact small businesses. She’s concerned larger property owners may pass the extra cost to tenants and small businesses.
Proponents of the House L.A. measure say the tax would affect 3 percent of residential and commercial real estate sales, or about 1,000 sales a year.
They say most of the tax funds would go toward creating supportive and affordable housing. programs. The rest would go toward helping low-income tenants who face homelessness, displacement or eviction.
“We don’t have an ongoing permanent local source (of funding),” Laura Raymond, director of ACT-UP and a major tax supporter, told the Daily News. The city has a “linkage fee” paid by developers who build projects in Los Angeles, but it is “not at the scale that we need, and so what this is going to do is to raise money at the scale that we need.”
Supporters include transit alliances, unions and homeless services providers. Opponents include business organizations and anti-tax groups.
Jon Coupal, of the Howard Jarvis Taxpayers Association, said he’s expecting a “well-funded campaign” to oppose the measure.
California has some of the highest taxes in the country, he said, “so there’s no need for this tax,” which he said would likely encourage companies to leave the state.
[Los Angeles Daily News] – Dana Bartholomew
The post Measure to add tax on property sales over $5M set for November ballot appeared first on The Real Deal Los Angeles.
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