City Council Wants Measure ULA Funds for Wildfire Aid

The City of Los Angeles wants to dip into “mansion tax” funds to help pay the rent of refugees from the Pacific Palisades fire.

The City Council unanimously voted to study whether the city can reallocate $15 million in Measure ULA funding for emergency rental assistance for residents displaced by the January firestorm, City News Service reported.

Without discussion, the council approved a motion introduced by council members Bob Blumenfield, Traci Park, John Lee and Heather Hutt. The council asked the city attorney, Housing Department and chief legislative analyst to report back on how they can “disencumber” the cash.

To draw funds for wildfire rent relief, the city is looking to skim up to 10 percent from 11 House LA Fund spending categories.

The Palisades fire ripped through 7,000 structures, killing 12 people and burned much of the coastal Palisades, leaving thousands of residents without homes.

The voter-approved Measure ULA real estate transfer tax, which went into effect on April 1, 2023, now charges a 4 percent fee on all residential and commercial property sales above $5.1 million and a 5.5 percent fee on sales above $10.3 million.

The tax, commonly known as the “mansion tax,” is expected to be adjusted in June.

As of March, the nearly two-year-old tax had garnered $632.6 million from 939 transactions, according to the city’s ULA dashboard. About 70 percent of revenue generated by ULA supports affordable housing programs, while 30 percent pays for homelessness prevention initiatives.

That’s a far cry from the up to $1.1 billion a year billed to voters as a way to pay for affordable housing and homelessness prevention.

After the mansion tax went into effect, the pace of investment sales in Los Angeles slowed by half, according to a University of California, Los Angeles analysis. The drop in sales volume translates to a $25 million initial annual loss in city property tax revenue.

Mayor Karen Bass hinted at reforming the two-year-old tax last month, and now lawmakers in Sacramento are tuning in.

Last week, state Assembly member Buffy Wicks introduced a bill restricting cities from enacting new transfer taxes before studying their potential impact on housing production.

— Dana Bartholomew