In November 2022, Los Angeles voters approved a so-called 'mansion tax,' which slaps a 4% sales tax on properties sold for over $5 million, and 5.5% for those over $10 million.
The scheme (Measure ULA), put forward by Democrats, was projected to raise roughly $672 million in its first year, to be used for affordable housing.
Not only did the plan fall short by hundreds of millions of dollars (raising just $215 million), the measure caused residential building construction to plummet, raising housing prices even further, the Washington Examiner writes, noting that the tax doesn't just apply to large homes in Bel Air, "but also gas stations, commercial real estate, condominiums, and apartment complexes."
City officials are still slapping themselves on the back, bragging that $150 million from Measure ULA revenues have helped fund programs for short-term emergency rental assistance (for whom?), as well as tenant outreach and education, tenant protections, defense against evictions (squatter defense?), direct cash assistance for low-income seniors and people with disabilities.
"The pace at which ULA is generating revenue, especially over the last quarter, is impressive," reads a statement from Joan Ling, a real estate adviser and policy analyst in urban planning who is also the lead author of a report from UCLA, USC, and Occidental College recapping ULA's first year.
"ULA is enabling Los Angeles to finally meet the big structural challenges driving our housing crisis—like the skyrocketing costs of land and construction—so that we can build more homes more quickly."
That said, as the Examiner concludes:
Indeed.