By Susan Shelley
August 17, 2022
Taxes are too high in California, but that doesn’t mean they can’t go higher. A bill now pending in Sacramento would create a new agency in Los Angeles County with the authority to invent new taxes, including parcel taxes, gross receipts taxes on businesses, document transfer taxes and various kinds of bond debt that would have to be paid back by taxpayers over decades.
Senate Bill 679 would establish the Los Angeles County Affordable Housing Solutions Agency. It would have the power to put tax measures on the ballot for voter approval, and then it would have the power to spend the money to purchase, lease or build housing for persons of low or moderate income.
All the projects would be exempt from the California Environmental Quality Act, and all the construction or rehabilitation projects would be required to pay prevailing wages and comply with a city or county labor agreement.
Under similar terms, the city of Los Angeles is spending $1.2 billion of borrowed money on homeless housing, and so far it’s costing about $600,000 per unit.
According to the legislative analysis prepared for the Assembly Appropriations committee, the agency’s operating expenses will cost about $1 million per year, but just until the agency successfully gets its first new tax passed to start the money flowing to the new bureaucracy.
This is completely unnecessary. According to the legislative analysis, “such powers and capacities already exist within county government.”
But then elected officials would have their fingerprints all over these tax increases. “It’s not us,” they’ll be able to say if this agency is created, “It’s the governing board of the Los Angeles County Affordable Housing Solutions Agency.”
And that’s how your ballot will be loaded up with new property taxes, document transfer taxes, business taxes and other measures that all will be titled something like, “The Home Sweet Home for Puppies and Kittens Act.”
The Assembly is considering SB 679 right now. Another bill, SB 1105, would have bestowed a similar tax-hiking housing bureaucracy on the county of San Diego, but that one was stopped in committee. No such luck in Los Angeles.
If you’d like to call the Assembly and express your opinion about SB 679 and more tax hikes in Los Angeles, you can go online to assembly.ca.gov/assemblymembers or go to findyourrep.legislature.ca.gov to look up your representative. Tell a friend.
In a related matter, a measure is set for the November 8 ballot in the city of Los Angeles titled, “Authorization for Additional Low-Income Housing.” It would authorize “public entities in the City of Los Angeles to develop, construct, or acquire up to 5,000 additional units of low-income rental housing in each Council District to address homelessness and affordable housing needs, subject to availability of funding and City development requirements.”
According to the measure, this is on the ballot because the state constitution requires voter approval “for public entities in the City to develop, construct, or acquire certain categories of low-rent housing projects.”
It’s Article 34 in the state constitution, added by voters in 1950. Currently the city has authorization to build 3,500 low-income rental units in each council district, after L.A. voters agreed to Proposition B in November 2008.
There is a better way to create an adequate supply of housing.
Instead of raising taxes and building public housing projects, government could get out of the way and let private enterprise work without a shock collar. Reducing building permit fees and layers of regulatory costs and mandates, and removing the unreasonable burdens on landlords, would go a long way toward restoring the rental housing business to a thriving and growing sector that meets consumer demand at multiple price points.
At one time, owning rental property was a great business for immigrants, for retirees, and for people who didn’t have a lot of education or professional opportunities. Now it’s slow torture as the government finds endless ways to raise costs and prevent cost recovery. Adding insult to injury, SB 679 enables the new agency to spend the money from its new tax increases on helping tenants fight their landlords.
Destroying the rental housing business and replacing it with public housing projects is an idea whose time has come and gone. L.A. doesn’t need higher taxes or a Cabrini Green New Deal.
Write to Susan at [email protected] and follow her on Twitter @Susan_Shelley.
This column was originally published by the Southern California News Group.