Measure ULA, a tax on high-end properties passed by Los Angeles voters in 2022, has flopped after just one month in operation, bringing sales of luxury homes to a halt while raising little money for affordable housing.
As Breitbart News previously reported:
Measure ULA, if implemented, will require the city to collect a 4% tax on sales over $5 million, and a 5.5% tax on sales of property worth $10 million or more. It passed with nearly 60% of the vote in November 2022.
The money to be collected through Measure ULA’s transfer tax — some $900 million per year — will be used “to subsidize housing, preserve affordable homes, guarantee counsel to tenants in eviction court, and subsidize other progressive priorities,” according to Bloomberg News.
However, wealthy homeowners rushed to sell their homes before April 1, when the tax began, and pulled their homes off the market thereafter, meaning that the luxury real estate market has collapsed and the city has collected essentially no revenue for affordable housing.
The Los Angeles Times reported Friday:
In March, when the luxury market reached the peak of its frenzy, there were 126 home and condo sales above $5 million in the city of L.A., according to the Multiple Listing Service.
In April, once Measure ULA took effect, there were two.
One sold in Brentwood for $5.7 million, and the other traded hands in Venice for $7.5 million. Together, they raised $528,000 for the city to use for affordable housing and homelessness prevention programs. So far, that’s it.
The Howard Jarvis Taxpayers Association is suing the City of Los Angeles over Measure ULA, arguing that it is unconstitutional. However, the weak performance of the tax thus far may be an even more effective challenge.