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New Era for City as Measure ULA is officially Repealed

Writer's picture: Commercial Brokers InternationalCommercial Brokers International

Legal Challenge


In January, a coalition of real estate groups filed a lawsuit to prevent the City of Los Angeles from implementing Measure ULA this spring. Lawyers representing the Howard Jarvis Taxpayers Association and the Apartment Association of Greater Los Angeles argue that the documentary transfer tax violates the California Constitution. If the Measure ULA tax increase is imposed as scheduled on April 1, 2023, great and irreparable harm will result, as Los Angeles property owners must pay unconstitutionally imposed taxes. In addition, measure ULA specifically devotes all revenue to housing and homeless services, clearly making it a special tax violating the state's constitution. As the legal battle begins, let's hope the court issues an injunction stopping Measure ULA's implementation this spring.


Repeal Timeframe


As the legal battle continues, a new petition calling for a referendum on local special tax increases, spearheaded by Kilroy Realty, was recently certified by California's Secretary of State. The petition was certified to have been signed by more than 1,000,000 registered voters, the threshold needed to place the referendum on the states 2024 ballot. As a result, in 2024, voters in California will have the chance to block Measure ULA, should the current legal challenges stall.


The ballot initiative demands a two-thirds or 66.7% vote for passage. Any imposed local tax imposed after January 2022 but before November 2024 that did not garner at least 66.7% of the vote will be voided as it "was not adopted in compliance." Measure ULA received 55.7% of the votes. Thus, if the ballot initiative passes, Measure ULA becomes invalid.


Wrapping Up


Measure ULA is not written well, and will have legal hurdles to clear if it is to ever become a permanent measure, with a possibility that the California courts should stop its implementation this spring. Additionally, California voters will have the opportunity to decide this Measure's, and other similarly structured measures’ fate next year. A Court not approving the injunction, and implementing the new measure this spring will only add to the confusion and costs for a special tax that will likely be repealed. The bottom line is that the Los Angeles city council did not have the legal authority to propose a special tax; therefore, it was not in the electorate's power to pass it and is invalid.


If you’d like more information on this, or other measures that may impact your investments, please do not hesitate to reach out to us at ari@cbi-commercial.com

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