Decorative imageFEBRUARY 2024

Who’s exempt from Measure ULA transfer tax?

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ULA Law Confuses Investors, Threatens Dealmaking!

The ULA law in Los Angeles, commonly referred to as LA's Mansion Tax, has raised questions about exemptions for certain entities. Check out this latest article highlighting this confusion and questions HERE. It's important to note that specific exemptions may apply, particularly depending on the buyer's status. To shed light on this matter, exemptions may be granted to:

  • Non-profit entities under Internal Revenue Code section 501(c)(3) with a track record in affordable housing development, community land trusts, or limited-equity housing cooperatives that record an affordability covenant upon acquisition.
  • Additionally, recognized 501(c)(3) entities with an IRS determination letter designation dating back at least 10 years and assets under $1 billion could also be exempt.

Navigating through these exemptions requires careful consideration, and consulting with a tax professional or attorney is advised for a comprehensive understanding of how the ULA law may impact individual cases.

To learn more, click HERE (Opens in a new tab)

Rent Control Is Back On The Ballot

A new ballot initiative known as the “Justice for Renters Act,” if passed, will drastically expand local rent control laws in California by repealing ALL the protections we now have under the Costa-Hawkins Rental Housing Act of 1995. This new ballot initiative is an extremely dangerous threat to all rental housing providers! If passed:

  • Your right to increase rent to market upon a tenant’s vacancy will be eliminated– vacancy de-control will no longer exist! You will never catch up with the going market rate.
  • Rent control will be expanded to single-family homes and condominiums, and to new construction.
  • Will result in the loss of local revenues leaving less funding for our schools, police and fire departments.
  • Unelected bureaucrats (rent control boards) will assess new fees on property owners and renters.
  • Will significantly REDUCE the value of your rental property and your rental income. Impacts from no vacancy de-control in New York City has reduced property values 35%-40% or more!

The Apartment Association of Greater Los Angeles (AAGLA) strongly OPPOSES this latest ballot initiative. Learn how you can get involved and get let your voice be heard HERE. (Provided by the Apartment Association of Greater Los Angeles (www.aagla.org)) (Opens in a new tab)

Los Angeles, CA Rental Market (Zillow Stats)

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  • The median rent in Los Angeles, CA is $2,799
  • Houses in Los Angeles, CA rent between $550 - $999,999 with a median rent of $2,799
  • The median rent price in Los Angeles, CA for February 2024 is $2,799. This is $260 less than February 2023
  • The median rent price in Los Angeles, CA February 2024 is $2,799. This is $4 more than January
  • There are currently 15,270 rentals available in Los Angeles, CA
  • The median rent in Los Angeles, CA is $2,799. This is $799 more than the national median.

Axios: Rents Rising, But Not As Fast As Recent Past

According to American news website, Axios, residential rent “…is rising at a much slower rate than it was in the recent past — and may even be falling” which may provide some relief from inflation to consumers. In a recent report, Axios stated that a discrepancy exists between the reported Consumer Price Index for the month of December that showed “shelter is still a prominent source of sticky inflation — responsible for more than half of the monthly increase” and “Zillow's rent index fell 0.2% in December and was up just 3.3% over the last year.”

According to the Axios report, economists site the reason is "due to [CPI] rents still playing catch-up to the level of asking rents," and may also reflect "regional dynamics." The Axios report further points out that “the government uses a sample of rental prices, some of which are under fixed agreements that may not change for at least a year.”