Proponent of ULA rollback enters mayoral fray

Los Angeles’s mayoral race got a lot more interesting hours before the cutoff for candidates to file to run in the June primary.

Prominent progressive Councilmember Nithya Raman — a member of the Democratic Socialists of America — is reportedly in the mix to run against incumbent Mayor Karen Bass. Raman’s entry caps what has been a buzzy week for the June election, and offers real estate a candidate that’s taken a clear stance on one of the industry’s hottest topics in Measure United to House L.A.

Inquiries to Raman’s press office were not immediately returned Saturday morning. Candidates have until noon Pacific Standard Time to file their declarations to the city clerk, which had not yet updated that filing roster as of early Saturday.

While Raman told the Los Angeles Times she holds a “deep respect” for Bass, she said recent months have underscored a need for change within the city.

“… I’ve really begun to feel like unless we have some big changes in how we do things in Los Angeles, that the things we count on are not going to function anymore,” Raman told the Times.

Her declaration to run adds to what’s now a crowded field of mayoral hopefuls and a week that saw former Los Angeles School District Superintendent Austin Beutner drop out of the race, Rick Caruso consider for less than a day walking back last month’s statements about not running, and tech entrepreneur Adam Miller enter the mix.

Meanwhile, former “The Hills” reality TV star Spencer Pratt officially kicked off his campaign Feb. 4. There’s also another DSA member, Rae Chen Huang, who announced her candidacy in November.

Real estate angle

Raman’s announcement comes just days after Bass delivered her State of the City in which she largely shied from one of real estate’s biggest headaches in Measure ULA.

Raman instead took aim at the so-called mansion tax late last month when she sought her councilmember peers’ approval to push some of the most aggressive carveouts for the two-tier tax through to the June ballot. The council didn’t bite during its Jan. 27 meeting, instead kicking the proposal to the Housing and Homelessness Committee.

Supporters of the tax have criticized Raman’s proposed changes, offering that they largely give in to real estate and broader business interests. The critics are generally on the left of L.A.’s political spectrum, which has been the core of Raman’s base.

Raman’s idea to amend the ballot measure that voters passed in 2022 includes a 15-year exemption from ULA for new construction multifamily, commercial and mixed-use projects. Meanwhile, there’s a one-time carveout for properties impacted by a natural disaster, which would be retroactive to January of 2025 to account for Palisades Fire survivors.

ULA went into effect in 2023 and currently applies a 4 percent tax to any property sales — commercial or residential — starting at $5.3 million. That bumps up to 5.5 percent on any deals of $10.6 million or more.

Real estate largely hailed the proposed changes after nearly three years of agents, brokers and developers lamenting stalled deals and a pall cast on the flow of financing for construction of housing and other commercial projects as a result of the tax.

Cityview CEO and Chief Investment Officer Sean Burton called the changes a “huge move forward” and said they resulted from months of conversations involving real estate, business leaders, non-profits and other interests looking to find ways of addressing what Raman called the “unintended consequences” of the tax.

“You’ve seen construction fall off a cliff for any sort of market rate housing or affordable housing,” Burton said of the tax’s impact. “L.A.’s been redlined by the investment community because of ULA.”

So far, ULA has raised over $1 billion since its rollout — a figure proponents often cite as a proof point of the tax’s efficacy. Still, that’s off from the original range of $600 million to $1.1 billion generated annually that voters were pitched when the tax went on the ballot.