In November 2022, Los Angeles voters passed Measure ULA, also known as the Homelessness and Housing Solution Tax, and it became effective on April 1, 2023. This measure imposes a real estate property transfer tax on all residential, commercial and land transactions executed in the City of Los Angeles, with a value of over $5M. If the property is valued between $5M-10M, the tax is 4% of the gross sales price, and if the property is valued over $10M, the tax is 5.5%.
The measure has had a negative impact on property owners, landlords, developers, and the Los Angeles real estate market. We believe the measure will make it harder for landlords to collect rent and threatens the long-term vitality of the real estate industry in LA by encouraging investors, builders, lenders, landlords, and others to look elsewhere for their prospective new projects and purchases.
Please join AIR CRE in supporting the legal fight to have the tax invalidated in court, which is being led by the Law Offices of Keith M. Fromm and the Costell & Adelson Law Firm.
To Pledge, send an email using the PLEDGE NOW button below and confirm your commitment.
AIR CRE STANCE
AIR CRE has made a monetary contribution to the “Fight ULA” effort to overturn, in court, the ULA tax (www.fightula.com). We commend The Law Offices of Keith M. Fromm and the Costell & Adelson Law Firm for challenging the tax in court (Newcastle Courtyards v. City of LA). Their challenge asserts 17 separate claims, including that the ULA violates the equal protection, takings, and freedom of speech clauses of the U.S. and California constitutions and Proposition 13, and that the tax illegally burdens the county to collect a city tax. The 4-5.5% tax on the sale price of commercial real estate over $5M, regardless of whether the seller makes a profit, has seriously impacted LA real estate transactions and stalled development, all of which may lead to a net decrease in tax revenue. Developers, builders, investors, and landlords are looking outside of LA now to do business because of the tax. We believe the lawsuit represents the real estate community’s best chance of overturning this unfair and harmful tax.
IMPORTANT: On October 23, the legal team participated in a major court hearing on the City’s motion to dismiss the case. the motion was granted. The team now must appeal the ruling. As such, they are seeking pledges to support the legal costs of the appeal.
The legal team is looking to raise $300K for the appeal. This is a very modest amount but one that is necessary to keep these important legal challenges alive in the appellate courts. It is especially small when compared to the estimated $800M to $1.2B per year the City has projected it will collect from this tax. Without sufficient pledges, the legal team cannot pursue the appeal and the claims will be forever lost. Thus, they will only collect on the pledges if the necessary amount is raised.
About the Legal Team
Law Offices of Keith M. Fromm is a Los Angeles law firm founded in 2001 by its namesake, Keith M. Fromm, who has been an attorney in California since 1977. He previously practiced real estate law at two prominent national firms in LA (Loeb and Loeb; Finley, Kumble, Heine, Underberg and Manley). He is also a licensed real estate broker, real estate developer, and litigator.
Costell & Adelson Law Corporation was founded in 1993. It is a full-service business law firm in Los Angeles specializing in real estate, commercial, corporate, and entertainment transactions and litigation.