Tax proposed on property sales over $5 million to fund LA's homeless housing

City News Service
Friday, December 17, 2021
Tax proposed on property sales over $5M to fund LA homeless housing
A coalition of labor unions and other organizations announced a ballot measure initiative to create a tax on multi-million dollar property sales to fund solutions to homelessness, including permanent housing.

LOS ANGELES (CNS) -- A coalition of labor unions and other organizations Thursday announced a ballot measure initiative to create a tax on multi-million dollar property sales to fund solutions to homelessness, including permanent housing.

The coalition will begin collecting signatures in January and hopes to get about 65,000 signatures by April to qualify for the November 2022 general election.

If approved by a majority of voters, the measure would create a 4% tax on properties sold for more than $5 million, and a 5.5% tax on properties sold for more than $10 million.

"Homelessness and the housing crisis are at the top of mind for Angelenos, but we haven't seen our local government take the immediate and bold action that is needed," said Laura Raymond of the Alliance for Community Transit - Los Angeles. "LA's not-for-profit neighborhood organizations and community members have come together, with the assistance of local policy experts -- not politicians -- to create a ballot initiative that will address homelessness by keeping people in their homes and dramatically increasing the supply of housing that is affordable for Angelenos."

Raymond said the revenue raised by the tax would be invested in affordable and permanent housing, as well as oversight of how the tax dollars are spent, including through a dedicated inspector general. She claimed it would provide "the strongest citizens oversight and accountability protections in the history of Los Angeles."

The group said the tax would have generated about $800 million between March 2019 and March 2020, by taxing only 3% of real estate sales that year.

The coalition anticipates the measure would create more than 26,000 homes for people experiencing homelessness or who are at risk of homelessness, helping about 69,000 people over the next 10 years.

The group also said the investment in homelessness prevention could help more than 475,000 at-risk renters stay in their homes each year.

The 29-organization coalition includes Leaders from the Alliance for Community Transit-LA, the Korean Immigrant Workers Alliance, Los Angeles Community Action Network, the Los Angeles/Orange Counties Building & Construction Trades Council, Move LA, the NoHo Home Alliance, Renters' Right to Counsel, and the Southern California Association of Non Profit Housing.

"We have a crisis-level shortage of affordable and supportive housing in Los Angeles. Without addressing the root causes of homelessness, we are doomed to remain frozen in the current status quo," said Alexandra Suh, executive director of the Koreatown Immigrant Workers Alliance. "The increase in housing prices continues to outpace workers' wages and inflation, and residents everywhere are struggling to balance housing costs with other financial necessities."

Voters in November 2016 passed Proposition HHH to use $1.2 billion to build 10,000 units for homeless Angelenos, with the goal of more than tripling Los Angeles' annual production of supportive housing.

The high cost of Proposition HHH-funded projects has been criticized by some. A September 2020 report by Controller Ron Galperin said the median cost of Proposition HHH projects is $531,000. When the proposition was passed by voters, the city anticipated that each unit of supportive housing would cost between $350,000 and $414,000.

More than 1,000 planned units cost more than $600,000, and one project was more than $700,000 per unit, Galperin reported.

While the coalition's proposal would build on Proposition HHH by prioritizing permanent housing, Los Angeles City Councilman Joe Buscaino has proposed a ballot measure that would require the city to prioritize emergency temporary shelter production over permanent housing. That measure would also prohibit encampments across the city if enough shelter is available and offered.

"Safer Streets LA," a campaign to pass Buscaino's proposed ballot measure, released a poll from ALG Research that found that 64% of 600 likely 2022 primary voters in Los Angeles would support a ballot measure to prohibit encampments in public areas, expand use of temporary housing and allow for expedited development of affordable housing for unhoused residents.

The 64% ranged from "strongly yes" to "lean yes," and a total of 28% ranged from "strongly no" to "lean no." The remaining 8% were undecided. The poll was conducted from Nov. 9-14 by phone and text-to-web.