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Measure ULA gets a needed challenge

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Measure ULA in Los Angeles never made any sense.

Opposed by new Mayor Karen Bass, in November voters passed it anyway by 58%. Fortunately, it’s now being challenged in Superior Court by the Howard Jarvis Taxpayers Association and the Apartment Association of Greater Los Angeles. We urge the court to invalidate ULA.

Specifically, according to the ballot title voters read, it funds “affordable housing programs and resources for tenants at risk of homelessness through a 4 percent tax on sales/transfers of real property exceeding $5 million, and 5.5 percent on properties of $10 million or more,” generating up to “$1.1 billion annually.”

California law allows a “general” tax of this sort, meaning it goes into the government’s general fund. But ULA is a “special” tax, going to a specific purpose, in this case for homeless housing. “The Constitution prohibits all local governments from imposing special transfer taxes,” said HJTA Director of Legal Affairs Laura Dougherty. “The Los Angeles City Charter confirms that legislation by initiative may not transcend this prohibition.”

If the courts agree with this challenge, it will be a worthy defeat for a massive money grab. Separately, the measure is economically harmful and self-defeating. A tax raises the price of something. In this case, discouraging new production of new housing and piling on yet another cost to be passed down to someone.

Of course, only the most wealthy can afford a $5 million house. But ULA will also significantly impact sales of apartment buildings and commercial properties, like supermarkets and retail stores. Tenants and customers will be paying the price if ULA goes through.

It will also harm the supply side of needed housing and development in the largest city in the state. “If this unlawful tax is allowed to stand, it will be the last straw that will cause property owners to invest elsewhere and never to come back to Los Angeles, following nearly three years of challenging rent collections and no allowable rent increases due to so-called ‘temporary’ moratoriums,” said Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, in a statement.

Here’s to hoping it is struck down.

 

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