The challenges of reconstruction in Los Angeles after the catastrophic fire in January 2025 have become even more difficult due to measurements from ULA, a local voting initiative that slapped the range of assets sold worth more than $5 million in 2022.
Measure ULA was sold to voters as a “mansion tax,” but in reality it applies to all kinds of real estate, including hospitals, factories, office buildings, and small homes that family landlords often use to provide income to themselves.
Breitbart News said in early 2023 that ULA “requires that it collect 4% tax on sales of more than $5 million and 5.5% tax on sales of assets worth more than $10 million.” (The minimum threshold was seen increasingly increasing.) It was supposed to raise $900 million a year, and sold to voters under the concept of supporting the homeless.
But taxes were flops. A month after it came into effect on April 1, 2023, it killed taxes on LA's high-end real estate market.
Public accounting company HCVT It has been reported June 2024:
Alen Nazarpour, HCVT's Tax Principal, said:
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In addition to keeping luxury home sales down, measurements have also stopped typical real estate turnover. “It's not just that you sell your property, but you'll be subject to ULA tax even if you exchanged via 1031 exchanges.” This has significantly reduced the desire for transactions between investors that circulate around the facility on a regular basis.
The cooling effect ripples further considering the LA's economy and the essential role that real estate plays on a taxable basis. “LA is a big real estate market. A lot of developers, investors – they're going to oppose that,” Nazarpour said. “Some people may even move to leave the area.”
Furthermore, as wealthy homeowners pulled their property off the market, measurements couldn't even bring in half of what was supposed to rise because transactions were slower.
Real Estate News Website The Real Deal It has been reported December 2024:
Since its implementation last April, ULA taxes have collected approximately $480 million. It was sold to voters as a way to generate up to $1.1 billion a year for affordable housing and homelessness prevention initiatives.
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ULA's tax revenues are far below the city's $606.6 million forecast for the 2023-2024 recruitment budget.
The 2024-2025 program's forecast revenues are much more conservative, at $271.1 million, according to the city's administration office.
The Los Angeles City Council voted to spend the majority of its $168 million in its 2024-5 ULA funding measurements for the 2024-5 social housing.
Rather than directly benefiting the economy, the funds were also spent on non-governmental organizations and overhead costs.
The city council spent money despite the ULA still facing lawsuits, which could completely override the ULA.
The lawsuit is spearheaded by the Howard Jarvis Taxpayers Association (HJTA), defending Proposition 13 of 1978.
HTJA claims that ULA violates Proposition 13 by imposing effective property taxes via transactions.
Elaine Clotty, a political advocate who turned real estate developer, told Breitbart News that the fire could wipe out the protections of Prop. 13 for fire victims.
“Under Proposal 13, your land purchase will be preserved at some point in property tax until you sell that property. The only variable is property improvement,” she explained.
“It's like a perfect storm, burn it all, resetting the value of the land and erasing the profits of the proposal 13.”
The Pacific Palisades property, held by their families for decades, could now face much higher taxes, as even after the fire, could surpass the new rating when Prop. 13 was passed in 1978.
That means paying additional taxes under measuring ULA if the home is rebuilt and sold in the future. In other words, many may decide not to rebuild at all.
There are also legal claims that measuring ULA violates the civil rights of those it taxes, especially those who may be selling property due to financial distress.
The positive effect of the measurement ULA was minimal at best. Meanwhile, the LA real estate market has slowed significantly.
Clotty Called Measures the ULA equivalent to Wall Street travelling from New York City. Without high-end real estate sales, there is no enough business to do enough to maintain the current real estate industry in LA
“[Measure ULA] If your home is burned and you value your lot exceeds 5 million, you will be charged ULA tax. It freezes the world's largest real estate market. I put it on my knees. ”
Ironically, measurements may be putting upward pressure on rental prices as landlords have to raise rents to pay taxes they have to pay if they plan to sell the building.
In Palisades fire-affected communities, ULA may limit homeowners' ability to rebuild. This is because the restored value and land of the house is over $5 million and if they are about to sell it, they will tax them.
Some Palisade homeowners in the Pacific Ocean may leave burned lots empty rather than rebuilding the burned lots. Banks can withhold loans on that basis.
There is still an ongoing effort to cancel and repeal the measurement of ULA through both future voting initiatives and ongoing litigation and appeals. It remains to be seen whether these efforts can be successful before they are too late for the victims of the Palisade fire.
There is another alternative. It is to provide federal assistance on the condition that the ULA is abolished. Ambassador Rick Grenell, who represents the Trump administration in California's rebuilding efforts, said “strings” would be attached to aid.
One of them is the deprecation or suspension of Measurement ULA. Just as Gov. Gavin Newsom puts aside state regulations and clears brushes that could cause more wildfires despite being late, cities could suspend implementation of ULA measurements so that communities can rebuild.
A recent study by the Los Angeles County Economic Development Corporation suggested that LA could recover quickly in 2029, but only if reconstruction was done immediately.
Therefore, the abolition of ULA measurements is an urgent need. Before it's too late to rebuild what's lost.
The behind-the-scenes of the measurement may not be the constitution in the first place, and many Angelenos see it as follows: It's just a The hands of money imposed by controlling and voting over the masses.
Suspend or abolish M at such devastation for so many peopleEasure ULA can pump oxygen. Strangers with ineffective taxes – what thwarted development and killed
Work associated with that development.
Joel B. Pollack is a senior editor at Breitbart News; Breitbart News Sunday Sirius XM Patriot will be available Sundays from 7pm to 10pm (4pm to 7pm). He is the author of Agenda: What Trump Should Do in His First 100 Daysyou can pre-order on Amazon. He is also the author Trump's Virtue: Lessons and Legacy of President Donald TrumpIt is now available on Audible. He is the winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter @joelpollak.
