Did someone mention mansion tax?
From CoStar:
Los Angeles Mansion Tax Supporters Want To Spend Money Now
City Hasn't Doled Out Levy Collections for Rental Assistance, Affordable Housing
By Jack Witthaus
CoStar News
August 7, 2023 | 2:57 P.M.
Funds raised by a Los Angeles tax on property sales above $5 million that has rankled real estate professionals and business leaders may soon start getting spent on projects aimed at alleviating L.A.'s housing and homelessness issues.
Supporters and city officials are kickstarting efforts to spend the dollars collected by the new tax, called Measure ULA and nicknamed the "mansion tax." The tax, affecting nearly all property sales and transfers in the city of Los Angeles above $5 million, has been collected since April but spending hasn't yet been approved.
L.A.'s city council and the mayor are being asked to approve mansion tax spending on funds to protect seniors from eviction, provide legal support for tenants and create affordable housing, according to city documents. The mayor and city council must sign off on how to spend the collected mansion tax revenue.
It's uncertain how much money the tax will collect in coming months and whether the tax can survive legal challenges and a statewide vote next year. That said, other cities, including Chicago, are watching how L.A.'s mansion tax unfolds to model similar taxes to combat housing issues. California has the nation's largest number of homeless people, according to the Washington, D.C.-based National Alliance to End Homelessness.
The city's apartment renters were required on Aug. 1 to pay back missing rent due between March 1, 2020, and Sept. 30, 2021, as COVID-19 protections expired in the city of Los Angeles. Renters are required to pay rent between Oct. 1, 2021, and Jan. 31, 2023, on Feb. 24, 2024.
"We will do all we can to ensure that a wave of evictions does not hit our city as we continue confronting the homelessness crisis,” Mayor Karen Bass said in a statement on July 27 about the missing rent payment deadlines.
Collections Reach $38 Million
The mansion tax so far has collected $38 million, according to city documents. That's well short of the estimated $672 million annually the tax was expected to contribute to funding efforts aimed at combating housing issues. Still, the tax generated a combined $15.5 million in in April and May.
Eli Lipmen — executive director of nonprofit Move LA, which helped write Measure ULA — said homelessness and affordable housing are urgent problems and the new tax monies need to be spent now. Move LA sent an email on Thursday asking for people to reach out to their councilmembers to "cut the red tape and keep the implementation of Measure ULA on track by treating homelessness with the urgency it deserves."
He added that "the sooner and quicker we can spend that money" the better.
The city of Los Angeles is mandated to implement and spend the tax revenue, but the city may have to refund the money it collects if it loses lawsuits attempting to strike down the tax. The city aims to spend up to $150 million in Measure ULA revenue. That $150 million is backed up by Federal Emergency Management Agency reimbursements to the city's general fund should the city have to refund the mansion tax revenue.
The next court date for the lawsuits is in late September, and claims must be filed with the city in order to get a refund for mansion tax money if the lawsuits prevail. Refunds aren't expected to be available if the statewide ballot measure Taxpayer Protection and Government Accountability Act passes in November 2024. If passed, the ballot measure is expected to derail the mansion tax and other similar transfer taxes statewide.
Link:
https://www.costar.com/article/192105673...n-tax-supporters-want-to-spend-money-now
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