A taxpayer watchdog group is warning that a new tax on certain property sales in the City of Los Angeles to raise funds for dealing with homelessness will hurt middle-class renters by forcing landlords to charge more.
Joel B. PollakA taxpayer watchdog group is suing the the City of Los Angeles over a new tax on property sales that supposedly raises money for the homeless but which, critics say, will hurt workers and renters without helping anyone.
When an apartment complex changes hands, Coupal warned, and the new owner is forced to pay the transfer tax to the city, “that’s going to show up in higher rents,” further exacerbating the city’s housing crisis. “Our strongest argument is that [Measure ULA] violates the L.A. city charter because [the charter] limits the scope of the initiative process in the city to matters that the city itself could do,” Coupal said.
Transfer taxes were prohibited by Proposition 13 , but in charter cities such as Los Angeles, transfer taxes have been permitted under case law since 1990 if they are for a general purpose. “The Constitution prohibits all local governments from imposing special transfer taxes,” said HJTA Director of Legal Affairs Laura Dougherty. “The Los Angeles City Charter confirms that legislation by initiative may not transcend this prohibition.
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