URW, Kilroy, Douglas Emmett Donating To Stop 'Mansion Tax' Ballot Measure
Some of the biggest CRE developers and landlords operating in Los Angeles have donated to stop a measure on the Nov. 8 ballot that would tax real estate transactions above $5M.
Opponents say that not all of the money raised will go toward its stated purpose of housing support in LA and that the measure would ultimately create higher rents for tenants. Some major retail and office landlords and real estate political action committees have raised about $1.5M to stop it from passing.
Called Measure ULA, or United to House LA, the initiative proposes a 4% tax on real estate transfers over $5M and 5.5% on transfers over $10M. Taxes are usually paid by the seller of the property. Sales made to nonprofits would be exempt from the new tax up to $1B.
The money generated from this tax will go to a fund that will pay for new affordable housing and for emergency housing interventions, such as legal aid for tenants facing eviction, according to the text of the measure.
In August and September, the Angelenos For Affordability committee raised just over $663K to oppose Measure ULA, according to the city's ethics commission website, which is current through Sept. 24. The committee describes itself as made up of “realtors, property owners and their renters.”
The largest donation to that committee so far — $500K — came from Westfield Property Management, data from the Los Angeles Ethics Commission shows. The name associated with the donation was then-Unibail-Rodamco-Westfield Head of U.S. Government Affairs Vice President Abby Jagoda. (Jagoda moved to a position at ICSC in September, according to her LinkedIn page.) URW declined to comment for this story.
Landlords Douglas Emmett and Kilroy Realty, both major owners of office properties, donated $50K each to the committee. Both companies did not return requests for comment for this story.
Another committee opposing the ballot initiative, Angelenos Against Higher Property Taxes – No on ULA and SP, has raised about $825K. Measure SP is a city of LA tax on improved parcels whose proceeds would fund recreation and parks facilities, according to the measure's text.
"The $1.1 billion in new taxes will increase rents for residents and small businesses," NAIOP SoCal CEO Timothy Jemal said via email, referring to the impacts of both measures. NAIOP SoCal opposes the measure and is part of the No on ULA and SP coalition.
"If these measures pass, they will depress property values and decrease needed investment in the local economy.”
The top donor to this effort so far has been the California Business Roundtable Issues PAC, which contributed $775K in two donations to the committee. The CBR did not respond to a request for comment.
In September, CBR received $500K from Douglas Emmett and $100K from Western National Group. In August, it received $500K from Kilroy Realty and in July, Blackstone donated $1M, according to data from the California Secretary of State.
The ballot initiative has been endorsed by the Los Angeles Times editorial board, but front-running mayoral candidates Karen Bass and Rick Caruso both oppose it.
Supporters of the measure, many of them labor unions, building and construction trade groups and affordable housing providers, raised just over $1.3M since July and nearly $3.9M year-to-date to pass what they refer to as the "mansion tax."
The LA County Building and Constructions Trades Council, another supporter, made donations worth more than $400K to the campaign. The Liberty Hill Foundation gave $175K in support of the measure, and the California Community Foundation gave $150K. SEIU Local 2015 gave $150K, according to public records.
"Both our members providing care for our communities’ most vulnerable and those they care for struggle with housing affordability," SEIU Secretary-Treasurer and SEIU Local 2015 President April Verrett, who serves as co-chair of the United to House L.A. campaign, said in an emailed statement. The union represents long-term caregivers.
"Measure ULA would add a small tax on the very top of our insanely profitable real estate market — the least we can do to protect the people who make up SEIU 2015 and those they care for," Verrett wrote.
