Coalition seeks ballot measure to tax home sales of $5M+
4 percent hit would rise to 5.5 percent rate at $10 million, pitched as latest plan to address homelessness
A group of labor unions and community organizations want to tax home sales above $5 million in the city of Los Angeles to fund homelessness programs and housing.
The coalition wants to put such a measure to voters in the city as part of the November 2022 election, according to the Los Angeles Daily News.
A representative of the Greater Los Angeles Realtors Association opposed the proposal in an early response from the industry, according to the Los Angeles Times. The trade group supported a 2017 countrywide measure that passed and added a quarter-cent to the local sales tax, a move projected to raise an estimated $355 million annually for 10 years to address homelessness. The problem has steadily increased in the city of Los Angeles and countywide since then, and the production of emergency shelter and other housing has fallen well short of projections offered during the campaign for the tax hike, known as Measure H.
The newly proposed measure would zero in on wealthier homebuyers and the recently hot residential real estate industry with a 4 percent tax on home sales above $5 million and a 5.5 percent tax on sales above $10 million.
The coalition plans to start collecting signatures in January with a goal of getting 65,000 by April to qualify for the November ballot.
Money raised through the tax would among other things fund rental assistance, permanent housing and affordable housing projects, according to Laura Raymond, the director of the Alliance for Community Transit-Los Angeles, one of the 29 organizations in the coalition.
The group contends that the measure could fund 26,000 units of housing for as many as 69,000 people experiencing homelessness or at risk of homelessness in the next 10 years. They also said the funds would help 475,000 at-risk renters stay in their homes.
It’s unclear what entity would administer those funds, but Raymond said the measure would include “the strongest citizens oversight and accountability protections in the history of Los Angeles.”
Other organizations involved in the group include the Korean Immigrant Workers Alliance, Los Angeles Community Action Network, the Southern California Association of Non Profit Housing and the Los Angeles/Orange Counties Building & Construction Trades Council.
The Trades Council is an umbrella group for 48 labor unions across the two counties with a total membership of around 100,000 workers. The backing of the Trades Council could prove consequential in the effort’s outcome.
The organization is affiliated with the State Building & Construction Trades Council of California, one of the most powerful labor organizations in the state that is regularly involved in high-level negotiations over state legislation.
The coalition claims that their tax scheme would have affected 3 percent of real estate deals between March 2019 and March 2020 and generated $800 million over that period.
Sale prices have ballooned since the pandemic, but the measure would still affect only a fraction of sales in the city of L.A.
[LADN] — Dennis Lynch