LA's new mansion tax starts Saturday; supporters say it will provide millions for affordable housing but critics argue it will slow down new development of apartment buildings
Measure ULA - the mansion tax - is set to kick in on April 1, generating hundreds of millions of dollars for Los Angeles affordable housing.With Measure ULA set to kick in on April 1, Los Angeles may soon have hundreds of millions of new dollars available to use for affordable housing and homelessness programs.
Voters approved the citywide tax last November, implementing an additional 4% tax on properties that sell for $5 million or more. If the property sells for $10 million or more, the tax goes up to 5.5%. Supporters of the mansion tax say it will raise about $900 million each year that will be earmarked for subsidized housing, housing acquisition and rehabilitation, rent assistance and homelessness-related programs.
"So you add another 5% onto the equation - a lot of times the margins are very thin. If they don't have the incentive to build, and people aren't going to build for a loss, we're going to have less housing," said David Kramer, president of HiltonAnd he's not referring to mansions, but to apartments. Kramer says large complexes that lease out homes can easily cost more than $10 million to build. Tacking on potentially millions more in taxes will scare developers away.
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