Los Angeles Activists Submit Signatures for $8 Billion Mega-Mansion Tax

(Bloomberg) -- A Los Angeles coalition that wants to increase the tax on the sale of mega-mansions and other high-value real estate to fund programs for the homeless says it has enough signatures to put the proposal on the ballot in November.

United to House LA, a citizen-led initiative, submitted documents Monday showing they've collected 98,171 signatures, well ahead of the more 61,000 needed to get on ballot, according to a statement. The signatures must still be verified by city officials.

The proposal, if approved by voters, would generate $8 billion over 10 years and help fund projects to maintain and expand the availability of affordable housing, the group said.

Los Angeles has long been home to a large homeless population, and public frustration over the issue has become a key topic in the city's mayoral race. At the same time, home prices have surged in California, creating an affordability crisis that is among the worst in the nation. The median price of a Los Angeles home is $1 million, up 13.6% since last year, according to Redfin Corp.

The new tax would increase the local real estate “transfer assessment” on high-end properties, according to organizers. The sale of LA properties for between $5 million to $10 million would face an increase in the transfer-tax rate to 4% from the current 0.45%, while those valued at $10 million or more would be charged a 5.5% rate.

Los Angeles voters in 2016 approved Proposition HHH, a $1.2 billion bond to provide as much as 10,000 housing units for the unsheltered. About $1 billion of that money has been committed to projects, of which $167 million are already in service, according to a February report by the Los Angeles mayor's office.