City Council Wants Measure ULA Funds for Wildfire Aid
Introduction to Measure ULA
The City of Los Angeles wants to dip into “mansion tax” funds to help pay the rent of refugees from the Pacific Palisades fire.
The City Council unanimously voted to study whether the city can reallocate $15 million in Measure ULA funding for emergency rental assistance for residents displaced by the January firestorm, City News Service reported.
The City Council’s Decision
Without discussion, the council approved a motion introduced by council members Bob Blumenfield, Traci Park, John Lee and Heather Hutt. The council asked the city attorney, Housing Department and chief legislative analyst to report back on how they can “disencumber” the cash.
To draw funds for wildfire rent relief, the city is looking to skim up to 10 percent from 11 House LA Fund spending categories.
Impact of the Pacific Palisades Fire
The Palisades fire ripped through 7,000 structures, killing 12 people and burned much of the coastal Palisades, leaving thousands of residents without homes.
Measure ULA Explained
The voter-approved Measure ULA real estate transfer tax, which went into effect on April 1, 2023, now charges a 4 percent fee on all residential and commercial property sales above $5.1 million and a 5.5 percent fee on sales above $10.3 million.
The tax, commonly known as the “mansion tax,” is expected to be adjusted in June.
Revenue Generated by Measure ULA
As of March, the nearly two-year-old tax had garnered $632.6 million from 939 transactions, according to the city’s ULA dashboard. About 70 percent of revenue generated by ULA supports affordable housing programs, while 30 percent pays for homelessness prevention initiatives.
That’s a far cry from the up to $1.1 billion a year billed to voters as a way to pay for affordable housing and homelessness prevention.
Effects of Measure ULA on Property Sales
After the mansion tax went into effect, the pace of investment sales in Los Angeles slowed by half, according to a University of California, Los Angeles analysis. The drop in sales volume translates to a $25 million initial annual loss in city property tax revenue.
Future of Measure ULA
Mayor Karen Bass hinted at reforming the two-year-old tax last month, and now lawmakers in Sacramento are tuning in.
Last week, state Assembly member Buffy Wicks introduced a bill restricting cities from enacting new transfer taxes before studying their potential impact on housing production.
Read More
Read more
Measure ULA suppresses sales, costs LA $25M in tax revenue
Bass says she wants to pause Measure ULA. Is she allowed?
Ballot measure to overturn ULA struck down by California Supreme Court
Conclusion
The City Council’s decision to reallocate Measure ULA funds for wildfire aid is a step towards providing relief to those affected by the Pacific Palisades fire. However, the long-term effects of Measure ULA on the city’s property sales and revenue generation remain a concern.
FAQs
Q: What is Measure ULA?
A: Measure ULA is a real estate transfer tax that charges a 4 percent fee on all residential and commercial property sales above $5.1 million and a 5.5 percent fee on sales above $10.3 million.
Q: How much revenue has Measure ULA generated?
A: As of March, Measure ULA had garnered $632.6 million from 939 transactions.
Q: What is the purpose of Measure ULA?
A: The purpose of Measure ULA is to support affordable housing programs and homelessness prevention initiatives.
Q: How has Measure ULA affected property sales in Los Angeles?
A: The pace of investment sales in Los Angeles slowed by half after the mansion tax went into effect, resulting in a $25 million initial annual loss in city property tax revenue.
