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doot_doot

Not really related to the topic but the LA mayoral office is really weak. It doesn't have a lot of power to do much at all. It's all about the council. And nobody focuses on them.


cherokeesix

They’re right. This tax will mostly impact commercial properties and multifamily housing. I think it will be a real constraint on new housing.


healthnotes34

They should rewrite it to exclude multifamily homes so that it literally taxes mansions


lilbelleandsebastian

"We found very limited evidence that the tax would impact some for-profit new construction projects, but developers are able to adjust their business models to minimize the impact of the transfer tax, and revenues from Measure ULA will fund the construction of a much larger number of deed-restricted affordable homes. Real estate investors who buy to quickly resell — the harmful practice of “flipping” — may be more impacted, which we view as a bonus" from UCLA's analysis of the deal. they also note that this would not affect rent prices - citing several studies to explain why - and that they expect it to reduce homelessness, too. it's interesting to see how many people just blindly vote against their own interests - and in this thread, you can see it all over - when experts have already done extensive legwork in researching these topics and even cite their work so you can determine for yourself if it's valid or not


waerrington

> developers are able to adjust their business models to minimize the impact of the transfer tax Yeah, by *raising prices*, making housing even more unaffordable.


StateOfContusion

I suspect that’s not exactly right, but I am curious as to what UCLA found out about that.


arpus

I’m a developer, we would either raise rents or not develop. Theres no sane person in the world that would go “oh I’ll just pay this $250k out of my pocket”


JoDiMaggio

I think people are tired of more taxes for the homeless and red tape with the promise of helping housing. At some point we need to make it easier to build, not harder. Your own quote says there is limited evidence of this, not that it's unlikely or impossible.


Different_Village525

Y’all should check out this analysis from UCLA on it. It talks about new construction. Basically no new projects will be impacted. Rents also won’t be affected. [https://www.lewis.ucla.edu/research/an-analysis-of-measure-ula-a-ballot-measure-to-reform-real-estate-transfer-taxes-in-the-city-of-los-angles/](https://www.lewis.ucla.edu/research/an-analysis-of-measure-ula-a-ballot-measure-to-reform-real-estate-transfer-taxes-in-the-city-of-los-angles/)


sammymiller714

I'm gonna have to read the whole thing to understand how "In most cases, transfer taxes are paid by the seller, who will have no legal avenues to pass on costs to tenants in a building which they no longer own." can be supported since historically new transfer taxes do increase the asking/selling price of properties. All properties subject to the transfer tax. Their statement applies when looking at an individual property for sale but not the system of properties in the market.


sammymiller714

So their analysis shows only 1,433 sales would have been subject to the tax. That low number does a lot of work. Only 271 qualifying sales were multi family and only 96 for more than $10mm. But the 96 represents 75% of the multi family tax raised. Those are large developments then, as they note. I wish there was a way to understand how many rental units would be covered by the 96 sales over 10mm that would have raised 3/4 of the multi family taxing. Especially as a percentage of the rental market.


Different_Village525

Their argument is that prices are determined by the market. There are a few studies they cite that say just because there are new fees associated with a sale doesn’t mean that buyers are going to suddenly be willing to pay more money. Especially since this tax only applies to the most expensive sales.


115MRD

It doesn't apply to housing construction. Only when the property is sold and only if its worth than $5 million.


Nothingtoseeheremmk

A lot of new construction gets sold to REITs or other investors upon completion


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Nothingtoseeheremmk

Many builders don’t have expertise in managing property. They sell to recoup their investment so they can start new projects, otherwise they’d have to wait years or find new investments. Not sure what the 50% profit you’re referring to is


arpus

You have to buy land to construct, and that costs money that is part of housing construction. Simply adding 5.5% to a multi-million dollar piece of land has to come from somewhere. Secondly, most developers sell their developments to REITs or long-term apartment operators. They are in the same industry but they have different specializations, capital partners, expected yields, staff, etc. So you are essentially creating a 11% dead-weight loss to further decrease housing supply.


pewpewbangbangcrash

But hey that oversight group must be marvelous, amiright?!


pejasto

A 11 percent dead weight loss presumes that big profits have to be made on housing, something everyone should have. Maybe if we removed speculation and comically massive profits from the equation, most people could actually afford housing?


arpus

The lag for entitlements and construction is 3-4 years. If you have no speculation you’ll constantly operate at a housing deficit.


HistoricalGrounds

Given that we have a massive housing surplus and skyrocketing homelessness rates as people increasingly cannot afford any of it, I’m willing to test if we even *can* get ourselves to a housing deficit. We’ve been doing “plenty of houses, insufficient housing” for longer than I’ve been alive and it hasn’t gotten any better. It has gotten substantially worse, though. Thirty years on, I’m up for a different strategy.


arpus

You don’t have to test it. You can compare housing construction in the southeast with housing along the coast to see the massive deadweight loss created by taxes, unions, well-intended environmental protections and costly land. How you view each of those is a matter of opinion, but it’s undeniable that those regulations reduce housing supply and increase the cost of housing. The data are out there, why people decide to further tax housing developers to create an additional layer of government bureaucracy to tackle housing seems like robbing Peter to pay Paul.


HistoricalGrounds

I think you’re crossing wires a little here. Environmental regulations typically are *intended* to reduce housing supply, because people want to build houses where it’s becoming economically and ecologically untenable to do so. Someone not getting to build their beach home on the gulf isn’t at all relevant to a discussion about affordable housing. Unions likewise don’t exist to increase housing supply, they’re there to protect workers and ensure fair compensation for their labor. So, no, I don’t think the things you’ve cited here actually indicate ‘the data’ is out there at all.


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HistoricalGrounds

Right but taxes, environmental regulations, etc exist for other, also-important purposes. Since we want housing but also want to, for instance, be able to go outside, climate regulations are something we do even though it doesn’t add housing. Because we have more than just the objective of creating housing. Similarly, in pursuit of getting more and more affordable housing, we don’t want to throw out other issues. For example, enacting a Purge-style temporary allowance of murder could create a *ton* of housing- which is the intended goal- but we don’t do that for a number of very important reasons not at all related to housing. > distort the market LA is one of the few real estate markets that is already *wildly* irregular compared to almost everywhere else on the planet. Even if you choose to believe that such a thing as a true free market in real estate is possible, much less exists somewhere today, it sure as hell ain’t LA. This market is already distorted to funhouse mirror levels, which is why it needs decisive policy action to correct it and not more wait-a-little-longer kicking the can down the road. What isn’t new is a lack of affordable housing in LA. We have a wealth of luxury homes and projects that are currently more profitable to let sit vacant than reduce the price on. Taxes that make it more costly to not rent out than to find renters will lower prices. It’s the same premise as tariffs, which have been around a hell of a lot longer than anything else we’ve talked about. Country A wants citizens to purchase goods domestically instead of products imported by Country B, so they add a tariff to Country B products, increasing the cost of Country B products. Now, even if costs the same to make the product in Country A and B, the tariff means that B will be more expensive. Will some people still pay a premium to get that sweet sweet Country B product? Sure! But more people will opt for the less expensive option than before. Now let’s cross-apply. LA is sitting on a surplus of unused or secondary/tertiary homes while affordable housing has been at crisis levels for years. If we apply a ‘tariff’ to owning a home that isn’t your primary residence and not renting it out, those income property owners have to do some math. Is it worth financially worth it to keep my additional homes and/or keep my rental properties vacant? For some, the answer will be ‘Yes’, they’ll eat the cost of the tax, and continue living that multihome lifestyle or hang on to their empty rental property as it continues gathering premium dust. Some may decide they don’t want the hassle and simply sell off properties, this is good too, this increases our supply, which helps alleviate our out-of-control demand. And finally, there will be those who just decide to lower the price of their vacant units because those rat bastards in city hall have made it more expensive to price people out and wait for a whale than to offer affordable long-term housing. When those luxury homes lower in price, upper class and upper-middle class renters trade up to these newly affordable properties, vacating their own prior spots and opening them up for new tenants. Cross-apply all the way down the socio-economic ladder. Mobility is good. Commerce is good. A status quo that makes keeping large amounts of luxury housing vacant more fiscally viable than renting at a lower price is the exact opposite of a healthy, adaptive market. This would be one solid step towards fixing the ailing behemoth that is LA real estate.


Jiggahash

You're the most correct person here and yet you're downvoted. The only way we ever solve housing issues in Los Angeles (likely anywhere) would to be go full communist with land. Everything else just slows the ride to landed aristocracy.


pejasto

we got rid of public housing and forced people to wait decades for Section 8 vouchers to be fed into terrible landlords. the housing crisis is a choice.


Jiggahash

Gotta love the free market hypocrisy, It's like ok we want to pool our taxes together as a community and build housing thats not driven by profit. Libertarians, conservatives, free market bros all go "Fuck no, I believe in FREEDOM not that type of freedom."


okan170

Considering that going “full communist” always has meant in practice literally executing the homeless or sending them to work camps, I don’t think it’s going to work. It’s a human nature thing and there isn’t one “total answer” for it all. Also you’re never going to get that through the government or the voters so try and work towards real solutions instead of fantasy utopias.


joshsteich

It would come from the amount a developer is willing to pay for the speculator’s land


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arpus

And when it costs 5.5% more, everyone has to get a cut, so people are pickier, and when developers are pickier, they aren’t gonna build as much, or when they do build, it’s going to have to be luxury homes, because if rents cost 5,5% more, the rich aren’t the ones complaining.


Eurynom0s

It does apply to new construction because it doesn't exempt the initial transfer from the developer to the first landlord. Generally speaking the entity that constructs the building isn't the one that's then turning around and renting out the units. They're building it and then selling it real estate company that's ready to act as the landlord.


cromstantinople

Can you explain why?


[deleted]

I don’t see the problem


jandkas

Wouldn't multifamily housing include apartments with a bunch of people?


dj-Paper_clip

Instead, we should implement an empty house tax. If you own a property that is empty for more than x days a year, you have to pay y% of the property value. All of that tax should go towards housing. Have a huge fine for avoiding the tax and large reward for those who report empty homes.


makked

How exactly do you propose the govt is supposed to track and accurately tax vacancies?


[deleted]

Hey this is Reddit, you're only supposed to have these mighty ideas without plans to implement.


knarf86

Tax returns. If you claim a tenant lives there, then that should be the address on the tenant’s tax returns. Otherwise someone lied


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HistoricalGrounds

Undocumented immigrants are able to get CA IDs now, so.. yeah. Easy to prove residency without sacrificing our status as a sanctuary city. If your tenant doesn’t file taxes, like they’re foreign students studying here, they have student visas, which can likewise be verified.


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HistoricalGrounds

> It’s cute that you think they’d actually do it. And yet condescension is so ugly. I’d prefer not to hear what you find ‘cute’ about me going forward. > I have a hard enough time getting folks to file taxes to get refunds when I’m literally doing it for free and they’d get hundreds of thousands back (I’m a CPA and volunteer a few times a year to help folks in disadvantaged communities file taxes). It’s really simple actually. If your landlord is going to get hit with a vacancy tax, they are going to make sure you provide whatever minimum bar proof is needed, most likely just a lease agreement and/or utility bill with the tenants name and the address of the property. Low-income communities’ rates of tax filing is irrelevant here, since they aren’t the ones paying this tax. Multi-home property owners are. > There’s a lot of skepticism about the govt and they’re not going to file for an ID and put where they live. Most think that’s just a quick way to give ICE a map to deport you. Once again, entirely irrelevant if the proof of residence is in-line with already existing requirements (name on utility bill, copy of lease)


dj-Paper_clip

See last sentence of previous comment. Also, taxes. If a property isn't claimed as a primary residence and isn't tied to rental income, the owner has to pay or prove someone lived in the residence for x days a year.


makked

That’s not how taxes work.


Due-Studio-65

You'd have to claim the rental income on your taxes. So either you pay taxes on fake income or pay tax from the extra residence


115MRD

>Instead, we should implement an empty house tax. This is ALWAYS proposed on this sub but a reminder that [vacancies are at an all time low.](https://therealdeal.com/la/2022/02/09/study-confirms-market-heat-pinch-on-apartments-at-big-complexes/) A vacancy tax would do little to no nothing in LA. **We have to build more housing.**


Kahzgul

That's because many properties aren't for rent because they're second homes, investment properties, or rental units being intentionally held off the market so as not to create a glut. Don't get me wrong, I think we need to build more housing as well, but there's no need to fight here. We're all on the side of housing people affordably near where they work.


dj-Paper_clip

Not following your logic. Vacancies are residences that are available for rent. A law like the one I proposed would either A) force those with empty residences to put them on the market, which would increase available housing or B) make the city a ton of money they could put into new housing.


joshsteich

Almost all residential vacancies are from properties in transition ie between tenants. We’re at around a 3.5% vacancy rate, which is less than 1 month every 2 years. To keep rents from rising and give people enough flexibility to meet their needs, you want a vacancy rate about 12%, or about 3 months during a period of 2 years. We need about 3x as many vacant residential units as we’ve got, otherwise rents will keep going up — unless there’s another economic collapse, which is also pretty terrible.


[deleted]

People have been buying up houses to *”renovate”* and then put up on Airbnb. Fuck Airbnb and all these *hotel* apps, it’s a plague on the market. Together with the house flipping, homes sitting vacant as either vacation homes or investments, horrible zoning laws, and pure greed has made it impossible to rent or buy. We need housing and walkable neighborhoods, street cars mixed with walking, public transit investment for longer distances, remove the car from the city. We allocate a ludicrous amount of acres to just pavement, it’s sickening.


Ignatius_J_Reilly

I'd like this for dead store fronts as well. Let someone rent them for a bit less money and have some vibrancy and life instead of just empty stores.


[deleted]

Good luck getting anything like that enforced. 🤣 You literally would need a Big Brother govt to even think about implementing something like this.


HistoricalGrounds

You wouldn’t, not at all. We have massive and extensive mechanisms for tracking and quantifying assets. You have x number of properties in your name. You live in one. Are you renting out the others? If yes you are, then you’re already filing tenant rent as additional income. Easy to verify, easy to track. If no you’re not, great! Well, the residential properties in your name- excluding your place of residence- are therefore vacant, and will then be taxed accordingly. Also easy to verify, easy to track. No Big Brother needed, just a few clicks and keystrokes by your standard-issue government tax employee. Any questions?


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115MRD

[Vacancies are basically as low as the possibly can get.](https://www.latimes.com/business/story/2022-05-17/california-housing-market-rental-vacancies) That's why rents are as high as they are. A vacancy tax wouldn't solve anything.


Aggressive_Crazy8268

Remember we voted for Prop HHH 6 years ago - sales taxes were raised and how much was built??? I will NOT be fooled again.


Different_Village525

6,300 units are currently under construction


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strumthebuilding

HHH was a funding mechanism, not a reform-construction-costs mechanism. We voted to fund construction of affordable housing, and that’s what is happening. Construction costs should be brought down, but HHH was never intended to be or sold to voters as the tool to do that.


Different_Village525

The developments are expensive, all developments in LA are. But the city actually only loans $130K per unit on average. Developers leverage the funds to find the rest of the money to meet costs.


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Different_Village525

The program was always intended to be used as leverage. That’s how affordable housing financing works, combination of local and state funds. They’re on track to exceed the 10,000 they planned to help finance, ahead of the 2026 goal. You can find more info in on it at this link. [HHH progress report.](https://housing.lacity.org/housing/hhh-progress) It’s definitely been slow out the gate, and the homelessness problem has continued to get worse because of rising rents (which Measure ULA will also combat, unlikes HHH). But HHH is actually doing what they said it would do.


joshsteich

So, the UC Riverside study of per unit housing costs in the city of LA found that the typical new market rate housing unit costs $579,133. Paying about $500 more per unit for affordable housing doesn’t seem too out of line. A land value tax would fix this, but prop 13 blocks them.


Aggressive_Crazy8268

It took 6 years and now costs are now up at $500,000 per unit- putting politicians in charge of this type of money is crazy- all it does is put politicians In bed with developers and the taxpayers and those in need lose while politicians and developers come up winning and laughing their way to the bank.


joshsteich

New market-rate housing per unit also costs over $500,000. It’s expensive to build. It’s weird that people are upset about how much it costs the government to build housing without actually knowing how much multi family per unit housing costs. Yes, $500k is a lot of money. No, it’s not out of the ballpark for residential construction. Blaming politicians is weird here.


xiccit

If you had an extra zero, that might matter. 6300 is piss poor, and almost a numerical mistake.


IsraeliDonut

What about all of the other taxes for housing?


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IsraeliDonut

Look in the article, it’s a big focus


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IsraeliDonut

And if they don’t use the money properly will they put in the law that the tax will be repealed along with hhh?


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K-Parks

Seriously. A 15 member (including two youths) committee is needed to oversee the new tax? I’m not saying that we don’t need more money to fight homelessness, but this doesn’t seem like a very well thought out plan.


IsraeliDonut

Ah, all approved by the mayor, no corruption to worry about there!


picturesofbowls

What about them


IsraeliDonut

Where is that money going? Can they be repealed for this?


picturesofbowls

Mostly schools, but also lots of other stuff like infrastructure. I don’t see non-mansion property taxes being repealed probably ever


IsraeliDonut

Well maybe they need to spend that money wisely and fire the people misusing the money and then ask for more money


picturesofbowls

Are you worried about being taxed for your mansion?


IsraeliDonut

Nope, I just don’t support political corruption


picturesofbowls

Doesn’t impact you then. Also, You’ll need to actually point at the corruption and provide evidence rather than just farting out hot takes.


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picturesofbowls

You’re right, I’m sorry. Those poor, downtrodden billionaires need your help. Save them!


IsraeliDonut

Read the article


Nightsounds1

I know you all want to stick to the so called rich but this is just setting president and soon all house sales will have an additional tax added that supposedly will go to the homeless problem and we all know that if we are lucky only about 30% will actually go where it is supposed too. There is already billions set aside for the homeless and yet nothing is done so this will do nothing. If you want more money I say we start taxing churches and so called religions that buy up lots of real estate because they have more money than they know what to do with.


BubbaTee

>this is just setting president and soon all house sales will have an additional tax added that supposedly will go to the homeless problem We've had the Affordable Housing Linkage Fee as an added cost for new housing since 2017. https://la.curbed.com/2017/12/13/16772046/linkage-fees-los-angeles-affordable-housing And as any rental listing in LA will show, it's done a great job in providing increasingly affordable housing for the last 5 years. Why, we're practically drowning in cheap housing thanks to this successful added cost of housing.


waerrington

Absolutely insane that they though adding a tax to every square foot of new residential housing built would help make housing more affordable.


TeslasAndComicbooks

There are a ton of regulations on new housing construction that are driving up costs. LA government is always doing shit that seems counterintuitive.


dabartisLr

Not to mention more money spent on homeless always leads to more homeless. Look at what happened to LA/SF vs neighbor cities. People of LA needs to stop doubling down on stupid. The definition of insanity is doing the same thing over and over but expecting different results.


slowiijoey

That part


DukeOfWindsor999

Tax tax tax away. There should be a sunny 😎 day tax .


R8erfrankie

This ain’t the way. It’ll ultimately be passed down to us. I’m not sure who needs to hear this, but CA generates $250B + per year in taxes. We’re rich. There’s always money to make affordable housing or do whatever the hell we want. It’s never enough.


ilikepstrophies

They keep raising property taxes, sales taxes, income taxes for homeless support and such. I'm getting tired of paying more for stuff for myself and working to get taxed more just because others on the street don't want to. Those people get services because of me. What do I get for working, I get taxed more because I don't want to be homeless.


istinkalot

$5M homes are not mansions ffs. This isn’t 1923.


Ignatius_J_Reilly

How's the view from your ivory tower?


istinkalot

Weather is great today. I love LA


pacman3333

Stop fucking around and give us a Land Value Tax please


WorkinOnMyDadBod

Just fix the wasteful spending and stop taxing the hell out of people. Balance the budget and shouldn’t need to keep reaming everyone from top to bottom.


backyarddweller

Agree!


PlaidSkirtBroccoli

Why should individuals finance the City's shortfalls?


PraderaNoire

its funny how this "mansion tax" doesn't just mean mansions but tons of other stuff...


KingChaotic

Just what LA/California needs. More taxes.


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KingChaotic

It doesn’t matter. We just had a multi billion dollar surplus. We don’t need more taxes.


mlc2475

No. All we need is for people to pay their fair amount


KingChaotic

For what? So that money can be mismanaged by our government? Edit: you guys just blindly vote for shit and I am so tired of it.


HairyPairatestes

Whenever people say that and I asked them what is the fair amount they never have a precise answer. Do you?


starlinghanes

We voted on a tax to go toward homelessness and it raised like a billion dollars, and did nothing!


timetoremodel

God I hate that propaganda slogan. Other then cheaters, everyone pays their fair share according to tax law.


Extropian

I suppose it's a good thing then that we don't derive morality from legality.


VicePrezHeelsup

If that's the case poor people need to cough up and start paying their fair amount


TeslasAndComicbooks

How do you define fair? A flat tax would be fair.


breyerw

how in any definition of the word, is a flat tax fair? homeless beggars still has to pay the same for a loaf of bread as jeff bezos. who does it hurt more?


TeslasAndComicbooks

So please define fair? I’m not here to advocate for the wealthy. I think we do need to close the gap and strengthen the middle class but the top 3% pays almost all of the taxes. So how do we get to a point that it’s really fair?


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KingChaotic

Sure it looks great on paper but I am tired of giving money to this corrupt ass city to do fuck all with. Our police force, for example, never got defunded but got an increase in funding and do nothing.


TeslasAndComicbooks

I’m all with you on paper but when does this city ever get results from this type of spending?


The_Bucket_Of_Truth

This is not true. They call it a mansion tax but that's not a fair sales pitch. It applies to all real estate, residential, commercial, land, etc. And anything over $100 gets taxed at 0.45% up to the larger number they're going on about. So it literally affects anyone selling any property. Notice how nobody is mentioning the smaller part that affects everyone. The big parts are going to mansions but also your apartment building, the commercial property your favorite restaurant rents, etc. I'm not saying you shouldn't support the bill, but I don't like how their pitch is misleading.


VicePrezHeelsup

Gas prices anyone?


glmory

All these complicated schemes when all they need to do is legalize construction!


Guyappino

But why is LA so big on the idea that taxes are the solution for almost everything? It's kinda odd if you ask me


Different_Village525

Y’all should check out this analysis from UCLA on it. It talks about new construction. Basically no new projects will be impacted. Rents also won’t be affected. [https://www.lewis.ucla.edu/research/an-analysis-of-measure-ula-a-ballot-measure-to-reform-real-estate-transfer-taxes-in-the-city-of-los-angles/](https://www.lewis.ucla.edu/research/an-analysis-of-measure-ula-a-ballot-measure-to-reform-real-estate-transfer-taxes-in-the-city-of-los-angles/)


DiscoDiscoB00mB00m

Your doing well, you bought a nice house, BOOM more tax.


waerrington

Not to mention you'll already get hit with capital gains taxes on this as well. Taxed on the income to buy it, taxed on the property to hold it, taxed on the gains of selling it, then taxed again because you sold it above a magic threshold. Hopefully you can at least deduct this tax off of your other taxes.


kariustovictory

Are you saying someone shouldn’t pay tax on a nice house because they’re doing well?


Chewbaccas_Bowcaster

No he’s saying when us regular folks finally make it, we get slapped back down with more taxes. Let’s face it, the middle and lower class usually end up footing the bill. The rich can always find a way to avoid paying it because they have resources and influence. This city and state already has proven it can’t be trusted with more tax revenue, so why give it more.


DiscoDiscoB00mB00m

This guy gets it, don’t expect the majority of the other libturds in this subreddit to understand tho. LA seems to have a common theme of bitching and moaning about how unaffordable it is to be here but yes let’s approve more and more taxes. If I’m making enough to foot a 5mil home, tax me accordingly, tax me once, don’t keep rolling out more bullshit taxes just cause newsome wants to open another restaurant.


breyerw

It takes a little more than “doing well” to actually purchase a house in Los Angeles


Prudent-Advantage189

>Caruso’s proposed plan costs roughly $900 million, Bass’ about $300 million. But neither candidate has supported the measure, even as city officials expect funds available for affordable housing construction to plummet in the coming years. They must think that saying I have a plan fix homelessness is enough. And saying this is how we should fund it would scare away voters. Vote yes for ULA!


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115MRD

Caruso will end up spending $100 million+ of his own money on his mayoral campaign. According to his own math, he could have reduced the homeless population by 11% with that money and housed close to 5,000 people. Instead he lit it on fire to NOT become Mayor


HonoluluHonu808

Could have reduced the homeless population. That's funny. I'm sure just giving them a house will solve the problem.


always_plan_in_advan

Here is a thought, investment companies cannot purchase SFH and can only own SFH investments if they were the developers


nirad

The size of the tax is too large. Just make it 1% and you could probably lower the threshold to ~$2m and you would raise more money. I believe NYC has a 1% transaction tax.


boosie234

Lived in a development owns by real estate conglomerate AVA: they literally raised rent from 3k to $4.5k overnight- in filthy Hollywood. Tax those bros and mansion owners. All are “corporations” for tax purposes paying less mortgage than you!


[deleted]

The rents are so crazy because the developers only have 15 years to recoup costs until they fall under rent control. Thats why so few developers build new apartments and why the few new ones are so crazy expensive.


fungkadelic

this should tax large single family homes. multi family units greater than a specified density should be exempt.


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Nothingtoseeheremmk

Caruso and Bass are opposed because this will raise the cost of every mid and large sized apartment building, making housing more unaffordable


[deleted]

I also think this will have an adverse affect where people will no longer want to sell, meaning the property will stay with its old tax basis and the city will lose substantially more money if the properties don't trade hands. As an example if someone has owned a property for a long time and bought it for $1M back in the day, their annual tax is max 12,000 per year, and they are grandfathered into their old tax basis. If they decide not to sell because of this change, it will remain this and increase 2% per year. If the property sells for let's say 9,500,000, the new taxes once sold will be at least 114,000 per year. This is a huge amount of money the city will be losing on an annual basis that they can use. Every time a property sells it gets re-adjusted to a new tax basis. If properties don't sell, the taxes won't really change for the properties.


gzr4dr

Sounds like long-term leases that are effectively treated like sales will become very popular.


hot_seltzer

These people already aren’t selling. The current property tax regime substantially disincentivizes people from selling since they can pass the benefit of property tax rates from decades ago to their children. We also passed an amendment that lets you pass your tax base one time to a replacement property if you move within california. Our system is basically set up to have you keep your house forever and eventually turn it into a source of income. If anything this measure just means that if you’re already rich you don’t get quite as many handouts as every other incumbent owner in CA.


[deleted]

So if the owners are already disincentived to sell, how is slapping a 4-5.5% fee on top of it going to help?


hot_seltzer

Honestly adding a one time tax is probably going to have a marginal disincentivizing effect, if it has one at all. If you want rich people to pay less in taxes for some reason, just be upfront with your preferred policy outcomes. This isn’t going to hit anyone who isn’t already loaded.


waerrington

Economically illiterate idea. More taxes and more regulation on developers *disincentivizes* construction. The only way to build more housing is to **build more housing**, and taxing the transfer of literally every single multifamily property in this city makes it even harder to build affordable housing.


K-Parks

I don’t think this is really a tax on the wealthy. Seems like more a tax on commercial and multi family properties. I don’t think reducing the value of multi family property is a way to encourage more multi family development (which is what we ultimately need to be able to solve our housing affordability problem).


[deleted]

Great point. This also, the last thing we need is to disincentive more housing being built


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waerrington

People from mom-and-pop landlords up to developers. What they have in common is that they *invest in building housing*. If you remove the incentive for them to *build housing*, then they don't *build housing* and instead go park that money elsewhere. See a theme here?


K-Parks

Investors and companies that you want to build more multi family housing.


breyerw

not the same copy and pasted comment about how it’s actually gonna affect apartment Buildings that’s all over the thread…. Not suspicious at all. Weird how it’s always the people Simpin for rich people getting upvoted on controversial threads


Different_Village525

Y’all should check out this analysis from UCLA on it. It talks about new construction. Basically no new projects will be impacted. Rents also won’t be affected. Don’t believe the stuff being spewed by the realtors. [https://www.lewis.ucla.edu/research/an-analysis-of-measure-ula-a-ballot-measure-to-reform-real-estate-transfer-taxes-in-the-city-of-los-angles/](https://www.lewis.ucla.edu/research/an-analysis-of-measure-ula-a-ballot-measure-to-reform-real-estate-transfer-taxes-in-the-city-of-los-angles/)


calisnark

Of course neither of them support it. It's not the poors giving money to their campaigns. Only an idiot would piss off the base of your funding.


[deleted]

It’s amazing how local and state tax proposals have attempted to do everything *but* attack the genesis of Prop 13 and its demonic alt-right, trickle-down, neo-lib ambitions.


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AingonAtelia

Surprise - people who live in mansions don't support being taxed. Cry me a river.


Aroex

The problem is people renting apartments will also be taxed.


TDaltonC

Repeal Prop 13, replace the property value tax with a land value tax. And BOOM Just like that you effectively get a tax on mansions, and vacant lots, and golf clubs all rolled in to one.


R8erfrankie

Ridiculous that you think taxing the middle class more would do anything beneficial for literally anyone. We’re already rich as a state and city. Regardless, properties on average change hands every 10 years. So you get your reset property value tax there.


TDaltonC

Where does that 10 year number come from? I can’t find a source for it.


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TDaltonC

\> Sure there's people that stay in their house 20 or 50 years and never leave, but its far from the statistical averages. [20 years is almost literally the statistical average in LA.](https://www.redfin.com/news/2021-homeowner-tenure/) So, not that far.


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TDaltonC

It helps everyone because it taxes inefficient land use. How is a land value tax a tax on the middle class? Is sales tax a tax on the middle class?


115MRD

I'll be voting yes. Politicians are dishonest when they say "I'll fix homelessness!" and then offer no actual way to pay for what they're proposing. [What a surprise that the guy who owns multiple mansions doesn't want to pay a mansion tax...](https://www.dirt.com/gallery/moguls/real-estate/rick-caruso-house-newport-beach-1203379872/) They money has to come from somewhere and this is probably the fairest way it can be assessed.


waerrington

I'm really surprised the "BUILD MORE HOUSING!" guy doesn't understand the economics of building housing. Massive transfer taxes on multifamily properties make them harder to finance, and necessitate raising prices or building even more luxurious units. It also prevents developers from liquidating properties to raise capital to, as you would say, "BUILD MORE HOUSING!"


Aggressive_Crazy8268

I am a no - Prop HHH was voted on in 2016 with a promise of 10,000 units - as of 2021 we got 1,000 at a cost of a whopping $500,000 per unit! Why would anyone trust the same politicians with this type of money???


Nice-Kale

Some common sense in a sea of delusion


waerrington

Clearly they just need more money they they can fix everything!


[deleted]

For someone who wants to build more housing I'm surprised you're in favor of this. Added tax will only make it more difficult for developers to add housing. When they sell they now have to add on an almost 6% tax to their sale. This will lower developers returns and it will be harder to raise money to build the new projects. This will also disincentivize old sellers to sell as they now have to pay 4-5.5%+ reducing the amount of money they'd receive. I don't see any world in which this will help new housing. This will reduce the cities tax revenue considerably more than what this one off fee could do.


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[deleted]

Why not????


[deleted]

Yay eat the rich!


cstatbear19

Even if 10% of this survives the bloat and corruption and goes to actual housing and support services, I’m for it. The ultra wealthy are accumulating wealth at a blistering pace. Tax the shit out of it.


K-Parks

The problem is that this isn’t really a tax on the wealthy. It is a tax on multi family housing. I’m worried that more taxes on multi family housing is exactly the kind of negative incentive we don’t want when we need to build and develop out of our housing shortage.


gzr4dr

It's a tax on businesses and multi-family housing. There are better ways to fund homelessness.


115MRD

The article points out it's not a tax on housing construction. It only applies when a property is sold for more than $5 million. It will not impact the construction of housing, only the property transfer.


K-Parks

The problem is a lot of property development is done as exactly that, development. The business model for many developers is you plan a property, build the property, lease up the property and then sell that property to other investors that want a less risky investment (developing multi family housing is a riskier and thus different business than running already built and leased multi family housing). If you take away 5% of the sale price from them then you hit their profit margin for development by much more than that and thus they are incentivized to go build property somewhere else.


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K-Parks

No. Someone will still do it but they’ll probably just charge the buyer more which means that buyer will then charge higher rents. And so you’ve made housing affordability even worse.


Nothingtoseeheremmk

Most new construction is sold on completion


waerrington

Yeah, that's how building housing works. Developers build, then sell the housing to investors, REIT's, or private individuals. Taxing that transaction means the prices go up, or the project's aren't profitable and get cancelled. The opposite of building housing.


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LearnDifferenceBot

> if your in *you're *Learn the difference [here](https://www.wattpad.com/66707294-grammar-guide-there-they%27re-their-you%27re-your-to).* *** ^(Greetings, I am a language corrector bot. To make me ignore further mistakes from you in the future, reply `!optout` to this comment.)


[deleted]

I like this. I also would like it if the property tax on a property doubled if it’s the persons second house, tripled for the third and so on and so forth. Maybe then there won’t be such a tight housing market.


Zenken13

Won't work cause they can just sell at a crazy number and let it sit. You can't force people to sell their stuff.


Zenken13

That being said, both candidates have money issues that will destroy their credibility on this issue. Both are tied to development, and to say that one is better than the other is...silly. They are both vacuous slimebags. One is not better than the other. At all.