LA’s ‘Mansion Tax’ Faces Possible Suspension Amid Fire Recovery
Los Angeles Mayor Karen Bass is considering a temporary suspension of Measure ULA, the city’s so-called “mansion tax,” to support residents recovering from recent wildfires in the Pacific Palisades, as reported in The Commercial Observer.
Measure ULA, approved by voters in 2022 and enacted in April 2023, imposes a 4% tax on property sales above $5.15 million and a 5.5% tax on sales above $10.3 million. Adjustments in June will raise these thresholds slightly due to inflation, applying the 4% tax at $5.3 million and the 5.5% rate at $10.6 million.
Bass acknowledged uncertainty about whether a suspension could be implemented without voter approval.
“There’s two schools of thought,” Bass said during a recent press conference. “One is that it can’t happen and must return to voters, and the other suggests it might happen with action from the council and mayor’s office. Our attorneys are currently reviewing this.”
Bass’s spokesperson emphasized that the mayor’s office is exploring all options to aid fire survivors and address the city’s ongoing homelessness crisis. “Street homelessness declined 10 percent in Los Angeles for the first time in years, and we will continue moving forward,” the spokesperson added.
Since its implementation, Measure ULA has faced legal challenges and criticism for generating less revenue than initially projected, contributing to a slowdown in commercial real estate transactions. By the end of the third quarter of 2024, Los Angeles experienced a 40% decline in commercial property sales compared to the same period in 2023, according to a report by NAI Capital.
Although Measure ULA raised nearly $600 million primarily through single-family home sales, this amount still fell short of the city’s projected $604.6 million for the fiscal year 2023-24 alone. In December, the Los Angeles City Council approved allocating about $168 million of ULA funds for the 2024-25 fiscal year, dedicating around $133 million to affordable housing, $21 million to renter support, and $13 million for administrative expenses.
