The Los Angeles Mansion Tax Has Been A Failure

The only man I fear is GOD!

Legislators are not playing the long game when they throw this shit against the wall.

1. While ignoring the profound impact that the tax will have on new apartment construction. Developers are already confronted with lengthy entitlement processes, affordability requirements, rising construction costs, and skyrocketing interest rates. A 5%-plus tax on sale prices will wipe out much of the builder’s profit potential, further reducing the incentive to add badly needed rental housing.

While it might feel good to soak the uber-wealthy, there are unintended consequences.

2. The ULA mansion tax also includes commercial and apartment buildings, which is where the biggest unintended consequences lie. Developers who build apartments and mixed-use projects in Los Angeles are subject to inclusionary zoning requirements to offer a percentage of low-income units in their projects. With the addition of an up-to 5.5% tax, their projects no longer make financial sense. This will make it harder to build new housing within L.A. city limits, including the required low-income housing. One more example of this city shooting itself in the foot.

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