Mayor Bass Seeks Measure ULA Exemption for Palisades Fire Victims

By SARAH SHMERLING | Editor-in-Chief

Mayor Karen Bass called on City Council to adopt an ordinance that would assist in establishing a “one-time exemption to Measure ULA” for Pacific Palisades homeowners, as announced Thursday, October 9.

The “Measure United to House Los Angeles” was approved by voters in the city of Los Angeles in November 2022 to create a real estate transfer tax. The tax applies to the sale of properties valued over a certain threshold (currently 4% for sales over $5.3 million and 5.5% for sales over $10.6 million), to “fund affordable housing projects and provide resources to tenants at risk of homelessness.”

“I don’t want you to lose hope over the ULA issue, as I do believe we’re going to get that done,” Bass said during a webinar on September 17. “I feel passionately that anyone who lost their home or was affected by the fires shouldn’t have to pay the transfer tax.”

Bass is requesting in a letter to City Council dated October 9 exemption for owners of homes, condominiums and other residential housing whose ownership was affected by the “devastating wildfires” from Measure ULA for a “one-time exemption over three years,” which will “speed up sales of these properties and spur rebuilding and rehabilitation of the Palisades.”

“This will create more housing citywide, and generate higher Measure ULA tax revenue when these rebuilt or renovated properties are subsequently sold to new homeowners because those second and subsequent sales will remain subject to Measure ULA,” she continued.

Bass wrote that the exemption for fire-affected properties from Measure ULA could be accomplished in two steps.

“For the first step, I request that the City Council adopt an ordinance giving the director of finance increased delegated authority to promulgate rules that grant this limited one-time exemption to Measure ULA,” she wrote. “I request that the council adopt such an ordinance as soon as possible. I look forward to signing it into law.

“After adoption of the ordinance, I will issue an executive directive instructing the director of finance to promulgate a temporary exemption that provides much-needed relief for those Palisades residents who owned and occupied residential property in the Palisades at the time of the fire, avoids unintended loopholes and furthers the purpose of ULA.”

The letter follows a meeting between Bass and Steadfast LA Founder Rick Caruso, who she said proposed ideas to help address the issue.

“The mayor’s plan to create a time-limited exemption from the Measure ULA property transfer tax will help homeowners who need to or wish to move from the fire-impacted area and speed up sales of these properties and spur rebuilding and rehabilitation of the Palisades,” read a statement.

Since Measure ULA was adopted by voters, it has generated “hundreds of millions of dollars” to fund “affordable housing development and preservation,” according to Bass.

“Yet, the measure, as written, is silent on an issue now affecting our Palisades community: how to exempt natural disaster survivors who are impacted by Measure ULA’s costs as they attempt to rebuild their families’ lives,” Bass said. “The successful rebuilding and revitalization of the Palisades is contingent on new homes quickly being built on vacant residential lots and on the timely sale of those lots or of those residences left standing by homeowners who want to leave the area. Many homeowners affected by the fires are long-time residents living on fixed incomes and with much of their life savings tied to the equity in their property. Some of these owners want to leave the fire zone area and rebuild their lives in other communities, giving an opportunity for a new owner to rebuild on the now vacant lot or renovate an older home still standing.

“But potential buyers of these Palisades residential properties are factoring in the cost of Measure ULA to make lower than market value offers. Sellers may be unable or unwilling to accept these low offers resulting in vacant residential lots that continue to sit empty and houses not destroyed being stuck on the market. This makes it harder for homeowners, even if they need to or wish to move, and delays or potentially misses the opportunity for the recovery and rebuilding of the Palisades.”