In a sign that momentum — or at least public outrage — may be building against Measure ULA, the City of Los Angeles’ incoming transfer tax, the Southern California News Group has published an op-ed blasting the measure and voicing its support for the measure’s first legal challenge.
On Dec. 22, the Apartment Association of Greater Los Angeles, a prominent L.A.-area landlord advocacy group, and the nonprofit Howard Jarvis Taxpayers Association filed a lawsuit opposing Measure ULA.
“Measure ULA in Los Angeles never made any sense,” reads the editorial board’s opening line.
The editorial ran in late December across the Southern California News Group’s chain of 11 area papers, which include the Los Angeles Daily News, Orange County Register and San Gabriel Valley Tribune.
While blasting L.A.’s pending transfer tax as “absurd,” it goes on to assert that a legal victory for AAGLA and Howard Jarvis would amount to a “worthy defeat for a massive money grab.” It also argues the new tax will discourage new housing production and, because it also applies to commercial deals, find its way down to the wallets of customers and tenants of businesses such as supermarkets and shops. “A tax raises the price of something,” it says.
The argument comes as music to the ears of many real estate professionals, who have been haranguing about the new tax, which was passed by L.A. voters by a significant margin in November and applies to all property deals in the city over $5 million.
The new tax is expected to raise hundreds of millions of dollars annually for homeless housing and services in the city and had the support of numerous organizations and nonprofits, including the ACLU, LA Family Housing and labor groups. After it passed, some advocates praised the vote as nationally historic, arguing Angelenos had approved “the largest housing ballot measure in American history.”
But much of the industry, which spent millions opposing the measure, has argued the law is ill-conceived, especially because it applies to gross sales figures instead of net profits, and will ultimately prove counterproductive, because it will discourage development and drive some potential taxpayers out of L.A. altogether.
“It is a major threat,” Dan Yukelson, the executive director of AAGLA, said earlier this fall.
The suit from AAGLA and Howard Jarvis argues the law, which is scheduled to take effect in April, is “invalid” because it’s a special tax — rather than a general tax — that the city doesn’t actually have the authority to implement. The City Attorney’s Office previously declined to comment on the lawsuit.
In October, the Los Angeles Times’ Editorial Board published its own editorial supporting the measure, arguing that it would apply to a relatively small number of properties but bring major social returns.
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