Should the City add a special tax on the sale or transfer of real property valued over $5 million to fund affordable housing and tenant assistance programs?
City of Los AngelesMeasure ULA - Majority Approval Required
City of Los Angeles
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Shall an ordinance funding and authorizing affordable housing programs and resources for tenants at risk of homelessness through a 4% tax on sales/transfers of real property exceeding $5 million, and 5.5% on properties of $10 million or more, with exceptions; until ended by voters; generating approximately $600 million - $1.1 billion annually; be adopted?
What is this proposal?
Pros & Cons — Unbiased explanation with arguments for and against
Information provided by League of Women Voters of Greater Los Angeles
The Question
The Situation
Publicly assisted housing in Los Angeles is funded by a combination of loans, bank credits, investments, state and federal government grants and contracts. The Housing Department of the City of Los Angeles administers these programs.
In 2016 Los Angeles City voters approved Proposition HHH, a 1.2 billion bond measure to create 10,000 units of new housing for the homeless. As of December, 2021, 1,142 units have been built.
At present there are approximately 41,000 unhoused people in Los Angeles.
The City collects a documentary transfer tax on the sale or transfer of property that funds City services.
The Proposal
The initiative ordinance is a citizen-sponsored ballot initiative. It amends City law impose an additional tax on the sale or transfer of real property valued over $5 million to fund affordable housing and tenant assistance programs. This measure would place a 4 percent tax ($40 per $1,000) on the sale and transfer of real property valued over 5 million but less than $10 million; and a 5.5 percent tax on the sale and transfer of real property valued at $10 million or greater. The threshold for imposition of the tax tax would be subject to changes in the consumer price index. 92 percent of the proceeds would fund affordable housing under the Affordable Housing Program, and tenant assistance programs under the Homeless Prevention Program. Certain housing, non-profit, and public entities would be except from this tax. This measure would be permanent until repealed by voters.
The goal of this measure is to increase the supply of affordable housing, address the need for tenant protections and assistance programs, and build the organizational capacity of organizations serving low-income and disadvantaged communities, among others. The Affordable Housing Program would fund the development of affordable housing to serve acutely low, very low, and low-income households.
The Los Angeles Housing Department (LAHD) would have the authority to approve funding of up to $50 million per project without City Council review and approval.
This measure funds two citizen committees: the Citizens Oversight Committee and the Tenants Council. Members of these committees would be appointed by the Mayor, subject to approval by the City Council.
The 15-member Citizens Oversight Committee would make recommendations to the City council on funding guidelines, conduct housing needs assessments, monitor program implementation, and audit fund expenditures.
The Tenant Council would be made up of tenants and currently homeless individuals. It would advise the LAHD, the Citizens Oversight Committee, and the City Council on activities related to tenant protection and fair housing.
Fiscal effect
Annual revenue from the special tax, estimated between $600 million and $1.1 billion, will fluctuate according to the respective number of property sales and transfers with values above $5 million and $10 million.
Supporters say
This measure will provide a new opportunity to move people off the streets. It will create more affordable housing and financial aid and eviction protections to low-income seniors, veterans, people with disabilities and others at risk of homelessness.
Funds from the tax will go to purchasing existing buildings and cutting red tape to create more affordable housing.
This measure only impacts a small fraction of properties and those paying the taxes are millionaires and billionaires.
Opponents say
Los Angeles voters already raised taxes for homeless housing and services with approval of Measure HHH, which was supposed to build 10,000 units of housing. It has not met that expectation.
This tax measure not only will impact sellers of $5 million and $10 million dollar properties, but applies to commercial buildings and apartment buildings as well, making the purchase of apartment buildings more expensive and rents higher for tenants.
This creates two new government boards and more bureaucracy, which will result in more administrative costs.
Details — Official information
Impartial analysis / Proposal
SHARON M. TSO, CHIEF LEGISLATIVE ANALYST
This citizen-sponsored ballot initiative would amend City law to add a tax on the sale or transfer of real property valued over $5 million to fund affordable housing and tenant assistance programs. The City collects a tax on the sale or transfer of property. The proposed ordinance would impose an additional tax as follows:
• A 4 percent tax on the sale and transfer of real property valued over $5 million but less than $10 million; and
• A 5.5 percent tax on the sale and transfer of real property valued at $10 million or greater.
The property value threshold subject to the tax would be adjusted annually based on the Chained Consumer Price Index. Qualified affordable housing and government entities would be exempt from the tax.
This tax is estimated to generate $600 million to $1.1 billion annually. At least 92 percent of the proceeds from the tax would fund affordable housing under the Affordable Housing Program and tenant assistance programs under the Homeless Prevention Program. No more than 8 percent would fund program administration, reporting, compliance, and implementation.
This measure’s goals include increasing the supply of affordable housing, addressing the need for tenant protections and assistance programs, and building organizational capacity of organizations serving low-income and disadvantaged communities, among others.
The Affordable Housing Program would fund the development of affordable housing to serve acutely low, very low, and low-income households. Housing units would be affordable for 55 years or permanently, if permitted by law, and be subject to resale restrictions.
This program would fund affordable housing, including:
• Development of multifamily housing;
• Alternative housing solutions that can include new supportive and affordable rental or mixed rental/homeownership projects, with up to 20 percent of the units available at market rate and 20 percent set aside for acutely or extremely low-income households;
• Acquisition, preservation, lease, rehabilitation, or operation of affordable housing;
and
• Homeownership opportunities, capacity-building for Community Land Trusts and similar organizations, operating assistance, and rental subsidies.
The Los Angeles Housing Department (LAHD) would have authority to approve funding of up to $50 million per project without City Council review and approval. The measure would require payment of prevailing wages and housing developments with 40 or more units would need to comply with certain project labor agreements. If a project results in displacement of a tenant, relocation assistance and right of first refusal for a comparable unit in the development
would apply.
The Homeless Prevention Program would fund resources such as:
• Rental and income assistance;
• Eviction defense and prevention programs;
• Tenant outreach and education;
• Tenant harassment protections; and
• A Tenant Council, comprised of tenants and currently homeless individuals living in the City. Members with diverse backgrounds would be appointed by the Mayor, subject to approval of the City Council. The Tenant Council would advise LAHD, the Citizens Oversight Committee, and City Council on activities related to tenant protections and fair housing.
This measure creates a 15-member Citizens Oversight Committee, comprised of 13 voting members and two advisory youth members. Members with diverse backgrounds and expertise would be appointed by the Mayor, subject to approval of the City Council. The committee would make recommendations to the City Council on funding guidelines, conduct housing-needs assessments, monitor program implementation, and audit fund expenditures.
LAHD would provide an annual Expenditure Plan to the Citizens Oversight Committee and the City Council with projected revenue and expenditures for at least three years. Funds must be expended within a specified timeline and may be periodically reallocated among categories in accordance with need, subject to certain procedures.
This measure will become effective if approved by a majority of voters.
Published Arguments — Arguments for and against
Arguments FOR
As homelessness and housing experts, we encourage you to vote YES on Initiative Ordinance ULA to reduce homelessness and protect seniors.
Initiative Ordinance ULA gives us a new and powerful opportunity to actually move people off of the streets and into housing. It would also prevent many low-income seniors from losing their homes when they are at-risk of homelessness.
Here’s how it works: When someone sells a mansion or other real estate worth more than $5 million, Initiative Ordinance ULA would invest a small percentage of that revenue back into our communities.
The money would be used to reduce homelessness, create more affordable housing, and provide financial aid and eviction protection to low-income seniors, veterans, people with disabilities, and other Angelenos at risk of homelessness.
This measure is unlike anything we’ve tried before. Based on 2021-2022 real estate sales, Initiative Ordinance ULA could generate around $900 million every year. Initiative Ordinance ULA will go to work quickly by purchasing existing buildings and cutting red tape to create more affordable housing. The measure will also provide support to seniors and people with disabilities who have difficulty keeping up with housing costs.
At the same time, Initiative Ordinance ULA only impacts a small fraction of properties. It would have applied to only 3% of all real estate sales in 2019 (those selling for more than $5 million). Let’s be clear: Only people selling real estate for more than $5 million will pay this tax. No one else will.
You can tell a lot about a measure based on who supports it and who doesn’t. Initiative Ordinance ULA was drafted by homeless service providers, affordable housing nonprofits, labor unions, and renters’ rights groups. It is endorsed by over 175 organizations, including the ACLU of Southern California and the Democratic Party of LA County.
On the flip side, we know real estate speculators, corporate developers, and the folks selling $50 million condos don’t love our measure. For them, LA’s real estate market is a big business that generates billions of dollars.
The bottom line is this: Millionaires and billionaires cashing in on mega properties can afford to pay the “mansion tax,” and we’ll all benefit from reduced homelessness when they chip in and pay their fair share.
Let’s talk about oversight, because we think it’s important. Unlike past efforts, this measure would create sustained funding to reduce homelessness with oversight from an independent board of homelessness and housing experts and a dedicated inspector general.
No politician who currently holds elected office will be allowed on the board.
We’re homelessness service providers and housing experts, but we’re also renters, homeowners, parents, and Los Angeles residents. We are as concerned as you are about the state of our city. That’s why we support Initiative Ordinance ULA and ask you to vote yes.
Yes to reduce homelessness.
Yes to protect low-income seniors and people with disabilities.
Yes to a city that is more affordable for our grandparents, our kids, and our neighbors.
Yes to Initiative Ordinance ULA.
STEVE DIAZ
Skid Row Homeless Service Provider
TAKAO SUZUKI
Little Tokyo Affordable Housing Provider
NORA HERNANDEZ
South Los Angeles Renter
ELI LIPMEN
West Adams Homeowner
ANTONIO SANCHEZ
Labor Leader
Arguments AGAINST
VOTE NO ON INITIATIVE ORDINANCE ULA, another TAX INCREASE to “solve” homelessness.
L.A. voters have already raised taxes TWICE for homeless housing and services. The $1.2 billion in borrowed money for Measure HHH was supposed to build 10,000 units of housing, but so far it has failed. Our tax dollars have been wasted on bloated projects that cost roughly $600,000 per unit. Measure H raised the sales tax in L.A. County for services that would help to end homelessness. In the last five years since both measures have been in effect has
homelessness in the City gotten better or worse?
VOTE NO ON INITIATIVE ORDINANCE ULA because it will be the largest tax increase in L.A. history, and consumers will pay it.
Initiative Ordinance ULA is a huge tax increase on real estate sales. It doesn’t just affect the owners of mansions. A 4% tax on the sale of properties valued above $5 million will hit housing providers, making the purchase of apartment buildings more expensive. Who pays for that? Tenants, through higher rents. It’s also a tax on the sale of supermarkets, movie theaters, shopping centers, self-storage facilities, and restaurants. Who pays for that? Consumers, through higher prices.
VOTE NO ON INITIATIVE ORDINANCE ULA because it creates another huge bureaucracy.
Los Angeles taxpayers already pay the salaries for a huge bureaucracy that’s supposed to be solving homelessness, the Los Angeles Homeless Services Authority. Many LAHSA employees collect six-figure salaries. Why should we pay for a new bureaucracy full of high-salaried paper pushers figuring out how to spend tax dollars on new contracts? No wonder some Angelenos call the current system the “Homeless Industrial Complex.”
VOTE NO ON INITIATIVE ORDINANCE ULA because it establishes two new government boards...and more bureaucracy.
It creates a 13-member committee plus a tenant council. These board members will be unelected and unaccountable to anyone. They will also be able to hire costly outside consultants, and no members of the committee will be drawn from groups representing taxpayers’ interests.
VOTE NO ON INITIATIVE ORDINANCE ULA because it has been estimated that only half of its revenue would go toward construction and rehabilitation of affordable housing.
It’s also estimated that about a quarter of the measure’s funding would go toward income assistance and subsidies. Another big chunk – $640 million over ten years – would go toward “administrative costs.”
VOTE NO ON INITIATIVE ORDINANCE ULA because there isn’t a plan to fix homelessness.
A real solution to homelessness must address all the causes and crises that lead to the unacceptable tragedy of people living and dying on the sidewalks. A real solution requires a comprehensive policy that includes adequate facilities and services for mental health care and treatment for substance use disorder, as well as services for victims of domestic violence. Housing is only one part of a comprehensive solution. ULA continues the failed status quo that can’t even keep up with increases in the homeless population.
VOTE NO ON INITIATIVE ORDINANCE ULA because it denies funding to emergency shelters.
Initiative Ordinance ULA would raise taxes by roughly $8 billion over 10 years but not one dime may be spent on building temporary housing or emergency shelters to get people safely off the streets to find the care they need. This exclusion tells the story, doesn’t it? This tax is all about helping a select few developers, not the homeless.
VOTE NO ON INITIATIVE ORDINANCE ULA.
For More Information:
Howard Jarvis Taxpayers Association
213-384-9656
info@hjta.org
www.NoNewTaxes.net
No Plan. No Way. Vote No on ULA.
www.VoteNOonULA.com
JON COUPAL
President
Howard Jarvis Taxpayers Association
GREGORY PLUMMER
Minority Small Business Owner
MICHAEL D. ANTONOVICH
Los Angeles County Supervisor
Ret., 1980-2016
DANIEL M. YUKELSON
Executive Director
Apartment Association of Greater
Los Angeles
JACK HUMPHREVILLE
Neighborhood Council Budget Advocate
Replies to Arguments FOR
DON’T BE FOOLED. TENANTS AND CONSUMERS WILL PAY THIS TAX.
Vote NO on Initiative Ordinance ULA because it isn’t just a 4% tax on “mansions,” it’s a 4% tax on any property in L.A. that sells for more than $5 million. It will make the purchase of apartment buildings more expensive, and that will push housing costs higher as tenants pay this tax through higher rents. It’s also a tax on the sale of supermarkets, restaurants and shopping centers. The cost of living in L.A. is already too high, and Initiative Ordinance ULA will lead to
higher prices for consumers.
IT’S NOT ONLY A HUGE TAX HIKE, IT’S A HUGE ‘NEW AND POWERFUL’ BUREAUCRACY.
Vote NO on Initiative Ordinance ULA because it will raise taxes by an estimated $800 million to $1 billion every year, and the money goes to a new bureaucracy run by unelected, unaccountable appointees who claim to be “experts” in homeless housing and services. Los Angeles voters already approved $1.2 billion in borrowed money to build housing for the homeless (Measure HHH) and also approved a county sales tax increase for homeless services (Measure H). These higher taxes have been in effect for five years. The problem of homelessness has only gotten worse, while the money has been wasted on high-salaried bureaucrats and housing costing an astounding average of more than $600,000 per unit.
ANOTHER BLOATED BUREAUCRACY, BUT NO PLAN TO FIX HOMELESSNESS.
Vote NO on Initiative Ordinance ULA because we’re already paying for one bloated and inefficient bureaucracy, the Los Angeles Homeless Services Authority. This measure creates another one! It would have a 13-member governing board plus a tenant council, but none of the members of the board would be representatives of taxpayers’ interests. Just the administrative costs for this new bureaucracy would be $640 million over ten years! And there’s no plan to fix
homelessness.
NOT ONE PENNY CAN BE SPENT TO HELP GET PEOPLE OFF THE STREETS RIGHT NOW.
Vote NO on Initiative Ordinance ULA because it does not allow any of the money from this tax increase to be spent on emergency shelters or temporary housing. This tax is NOT a plan to fix homelessness. It is a plan to help a select few developers and homeless service organizations take control of all the money from a tax increase on real estate sales. Can you guess who paid to collect the signatures to put this measure on the ballot?
VOTE NO ON INITIATIVE ORDINANCE ULA.
For More Information:
Howard Jarvis Taxpayers Association
213-384-9656
info@hjta.org
www.NoNewTaxes.net
No Plan. No Way. Vote No on ULA.
Angelenos for Affordability
info@VoteNOonULA.com
www.VoteNOonULA.com
JON COUPAL
President
Howard Jarvis Taxpayers Association
DR. RUBEN GUERRA, PH.D.
Chairman and CEO
Latin Business Association
ANDY BALES
President and CEO
Union Rescue Mission
GREGORY PLUMMER
Minority Small Business Owner
MICHAEL D. ANTONOVICH
Los Angeles County Supervisor
1980-2016, Ret.
DANIEL M. YUKELSON
Executive Director
Apartment Association of Greater
Los Angeles
JACK HUMPHREVILLE
Neighborhood Council Budget Advocate
Replies to Arguments AGAINST
The opposition gets a lot of the basics wrong, which is unsurprising given that many of them are real estate developers—not homelessness experts.
ULA is a new approach drafted by homelessness experts to have an immediate impact. Here’s how it’s different:
• ULA invests in innovative solutions that will create housing faster and at a lower cost than what has been tried before. This includes purchasing and converting existing properties like motels and hotels.
• ULA will prevent new homelessness before it even starts, raising an estimated $240 million per year to protect seniors, people with disabilities, and others at risk of homelessness (based on 2021-2022 data).
• Over the next ten years, Measure ULA will raise more resources to address homelessness than the City of LA has ever had before.
• It will be paid for by millionaires and billionaires. Unlike past measures, the majority of people in LA will not pay a single penny.
• ULA will be overseen by an independent board of experts, not politicians.
ULA was written by renters rights advocates, affordable housing providers, and labor unions who care more about working families in Los Angeles than your average real estate mogul.
• Every time someone asks the ultra wealthy to pay taxes, they resort to scare tactics. Don’t fall for it.
• According to the LA County assessor’s office, LA County property got $122 billion more valuable last year. And yet this tax would have applied to only 2.5% of home and condo sales in 2021-2022. The millionaires and billionaires cashing in can afford to pay their taxes.
• Our opponents argue that a tax on multi-million dollar real estate will trickle down to renters. Don’t let scare tactics obscure the facts. Real estate billionaires and corporations are against our ballot measure because it will require them to foot the bill for affordable housing.
They want you to pass up this opportunity to do something about homelessness. Here’s why LA can’t wait:
• 80% of seniors in Los Angeles are rent burdened, according to UCLA Center for Health Policy Research. ULA will help protect low-income seniors at risk of homelessness.
• Every day, 227 people in LA become homeless, based on the official results of the 2020 homeless count. If ULA were passed last year, it would have raised $240 million to prevent homelessness and $565 million to build housing for people experiencing homelessness.
• The measure also provides funding to help protect renters. Annually, ULA could provide an estimated 5,100 households with emergency rental assistance, nearly 13,000 households with income support, and an estimated 23,000 households with legal counsel and eviction defense.
Just like you, we are frustrated by the lack of affordable housing and ineffective solutions to housing the homeless population. This is why we took action and wrote Measure ULA.
Vote YES on ULA to substantially reduce homelessness with comprehensive strategies that have never been executed before at this scale.
STEVE DIAZ
Skid Row Homeless Service Provider
TAKAO SUZUKI
Little Tokyo Affordable Housing Provider
NORA HERNANDEZ
South Los Angeles Renter
ELI LIPMEN
West Adams Homeowner
ANTONIO SANCHEZ
Labor Leader
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