Next year, voters in the city of Los Angeles could get the chance to increase funding to address homelessness. That’s if a new initiative gets on the ballot and succeeds at convincing enough voters to approve a new tax on top-dollar real estate transactions.
Advocates for the “United To House L.A.” initiative filed paperwork this week to begin collecting signatures for a ballot measure that aims to tax property sales of $5 million or more.
“It's really targeting millionaires and billionaires who have not been paying their fair share in taxes, in order to address the crisis that all of us see and feel every day in Los Angeles,” said Laura Raymond, director of the Alliance For Community Transit-Los Angeles and a member of the coalition supporting the ballot measure.
Based on property sales in the city from 2019 through early 2020, proponents estimate the tax would affect about 3% of all real estate deals. They say by focusing on the wealthiest buyers and sellers, the measure could raise an estimated $800 million in new revenue every year.
Proponents intend that money to go toward 26,000 new units of housing over a 10-year period. They say the housing would be created through a mixture of new construction and repurposing of existing buildings.
It's really targeting millionaires and billionaires who have not been paying their fair share in taxes in order to address the crisis that all of us see and feel every day.
Other funding would go towards homelessness prevention efforts through programs such as emergency rent relief, income assistance for seniors and disabled tenants, and legal aid to renters facing eviction.
L.A. filmmaker Jenise Dixon said she’s supporting the measure because she has faced eviction threats from her rent-controlled Mid-City apartment during the pandemic, despite L.A.’s eviction moratorium. She has successfully fought to stay in her home, but she said many tenants who face harassment or unlawful evictions simply leave because they don’t know their rights.
“All it takes is my landlord to win in court, and I'll be on the street,” Dixon said. “So as a renter, my focus is definitely on preventing homelessness.”
The proposal would levy a 4% tax on transactions between $5 million and $10 million, with a 5.5% tax kicking in for sales above $10 million. Similar “documentary transfer” taxes have already passed in other cities, including last year in neighboring Culver City.
Increasing taxes on real estate transactions sends the wrong message as it further increases the already high cost of housing in the region without addressing the ... housing production and affordability crisis.
L.A. voters have passed billions of dollars in new funding to address homelessness in recent years, through various city and county efforts such as 2017’s Measure H. But for many the results aren’t clearly visible. The vast majority of residents tell pollsters the problem has been getting worse.
The city’s Measure HHH won resounding approval from voters in 2016, with a goal of building 10,000 new units of permanent supportive housing. But according to a 2020 audit from City Controller Ron Galperin, 81% of units in the pipeline will not have been completed by the end of this year.
The effort to place the new initiative on the ballot is still in its early stages, but it could end up facing opposition from local real estate industry groups.
Stan Smith, president of the Greater Los Angeles Realtors Association, said in an email that while his organization supported Measure H, “Increasing taxes on real estate transactions sends the wrong message as it further increases the already high cost of housing in the region without addressing the core issue — that we are still in a housing production and affordability crisis.”
Proponents of the ballot initiative said they’re confident they can win voters’ support. They point to a recent Los Angeles Times poll that found 51% of respondents supported a tax increase to fund homelessness efforts, while 41% opposed it.
The initiative’s proponents need to collect nearly 65,000 valid signatures by spring to qualify for the November, 2022 ballot.
