Business groups falsely claim Los Angeles’ affordable housing measure will raise property taxes

Ballot measure in Los Angeles funding affordable housing by imposing a new tax on the sales or transfer of properties exceeding $5 million has been targeted by business and real estate groups in an ad campaign calling it “the largest property tax increase in history of Los Angeles.”

This statement is false. The ULA measure is not a property tax, which is an annual assessment of all property that is used for general government functions. If passed by city voters on Nov. 8, the measure would be a one-time sales tax that would go into a special fund designed to address the city’s housing and homelessness crisis.

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“Calling it a property tax is a dishonest attempt to scare homeowners,” said Peter Dreyer, an Occidental College professor who co-authored a report on the measure’s impact and is part of United to House LA, the group working for passage. “No one’s property taxes will be affected,” Dreyer said.

California cities and counties don’t actually have the power to raise property taxes. That can only happen if state voters change Proposition 13 through a statewide constitutional amendment.

The study by Dreyer and researchers from UCLA, USC and Occidental estimated that ULA metering would affect less than 3 percent of single-family home and condominium sales. That’s because in fiscal year 2021-22, only 727 homes and condos sold for more than $5 million, or 2.6 percent of the 28,378 homes sold in the city.

According to the study, the measure would generate about $900 million a year to be used to build more low-income housing and provide rent relief for vulnerable tenants, especially seniors. The ballot measure includes a provision to create an oversight committee to ensure the funds are used as the measure calls for.

Measure ULA is supported by the United Way of Greater Los Angeles, many community and tenant rights groups, affordable housing nonprofits, nonprofit homeless service providers, labor unions, and many religious groups.

The two opposition committees campaigning against the ULA are called Angelenos for Affordability and Angelenos Against Higher Property Taxes. The biggest donors so far, according to filings with the Los Angeles Ethics Commission, include:

  1. The California Business Roundtable, a lobbying group for the state’s largest businesses ($2,276,098)
  2. Westfield Property Management, which owns 82 shopping centers worldwide, including Westfield Century City, and which intends to sell all its US malls by next year ($541,118)
  3. National Association of Realtors, the national lobbying group for real estate agents ($544,328)
  4. California Association of Realtors, the state lobbying group for real estate agents ($469,000)

Other six-figure donors include the California Business Properties Assn. ($300,000), commercial real estate lobbyist, self-storage company Public Storage ($395,000), developer Hudson Properties ($250,000) and real estate investor AP Properties ($100,000).

The California Business Roundtable also received direct support from opponents of Measure ULA. For example, in addition to the $50,000 direct donation to the anti-ULA campaign, Kilroy Realty in October donated $555,000 to the California Business Roundtable PAC. Similarly, Douglas Emmett Properties, which directly contributed $50,000 to the anti-ULA campaign, recently donated $1,000,000 to the California Business Roundtable PAC.

Blackstone — the real estate and private equity investment firm — has not made a direct contribution to any of the anti-ULA committees, but on July 1 donated $1 million to the California Business Roundtable PAC. Blackstone became one of the nation’s largest landlords after buying a huge inventory of properties after the 2008 real estate crash, when many homeowners faced foreclosure. It bought at least 82,000 homes, including thousands in Los Angeles. A UN report on Blackstone said its subsidiary Invitation Homes raised rents to nearly twice the Los Angeles average.

The California Business Roundtable did not respond to requests for comment.

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