Los Angeles City Council passed a resolution on Friday to endorse an assembly law that introduces a tax on large business landlords and uses the proceeds for rental support, eviction prevention legal services, homeless services and more.
“There are currently 500,000 corporate-owned properties in California and over 250,000 properties owned by companies that own 10 other properties,” says Councilor Monica Rodriguez’s resolution. “Increasing research suggests that large corporate landlords are more likely than smaller landlords to purchase available apartments, increase rents, evict tenants, and operate rental units with habitability issues.”
California Assembly Bill 1199 would impose annual excise tax on landlords who own 10 or more single-family homes or 25 or more single and multi-family homes to “prevent further consolidation and commercialization of single-family homes to create opportunities for families to buy homes To build wealth and fund basic services. “
The tax revenue would be transferred to the Homes for Families Fund and used for:
- Rental assistance and relief for tenants;
- Legal advice to prevent evictions, harassment and violations of the law by landlords;
- Services and programs for people affected by homelessness;
- the maintenance and creation of affordable housing;
- Housing advice to promote home ownership;
- Vocational training courses; and
- Support for landlords who own less than 10 properties and have lost rental income due to COVID-19.
The bill would also require the registration of all corporations, limited liability companies, limited partnerships, trusts, and similar entities that own California property that was rented or leased in the previous calendar year.
The information would be compiled in a searchable database accessible to the public.
“As many of us saw through the course of the economic recession in the last bubble, we saw a lot of private property transfers through the acquisition of business owners. More importantly, it creates a huge wealth transfer,” Martinez told councilors before the vote.
“This is our opportunity to ensure that we have more transparency about owning these properties as we cannot continue this level of asset transfers.”
The resolution was passed with 14 votes in favor and one absence.