June 28, 2024
Comments about SB9 and Measure ULA
TAILORED AMENDMENTS TO SENATE BILL 9 – THE CALIFORNIA HOME ACT
Senate Bill 9 (SB9), passed in 2022, allowed homeowners to subdivide a single-family lot, allowing for more primary dwelling units and thus intending to create more opportunities for additional housing or an option to create rental investment assets.
Last month, an LA County Superior Court ruled that as it pertains to certain SoCal cities – specifically, Del Mar, Redondo Beach, Carson, Torrance, and Whittier – SB9 is unconstitutional.
Comment: Balancing California’s need for additional housing while navigating cities’ and municipalities’ rights and abilities to control their jurisdictions is tricky. When sweeping laws pass, locals fight back and the dance begins.
CHANGES TO MEASURE ULA – UNITED TO HOUSE L.A.
In April of last year, the City of LA passed Measure ULA, adding an additional property transfer tax rate to properties selling over $5M and $10M. (Note: Measure ULA is not effective in Malibu, Beverly Hills, West Hollywood, Santa Monica, Culver City)
A recent change to Measure ULA revised the home price thresholds, effective for transactions closing after June 30, 2024. The new thresholds are: Home sales above $5,150,000 but under $10,300,000 will be assessed a 4% tax. Home sales of $10,300,000 and up will be assessed a 5.5% tax.
The controversial measure continues to be up for discussion and was, until last week when a judge struck it down, going to be included on the ballot in the November 2024 election
Comment: The City of Los Angeles hoped to raise $1B annually from this “mansion tax”. In this first year, it garnered $215M. As I’ve noted in my previous newsletters, the luxury housing market was cooled by this law after it’s passing in April 2023, and since this tax applies to commercial buildings as well, there’s evidence that it’s deterred developers in apartment and commercial construction spaces as well.
Danielle Yeretzian
