Mansion tax to help poor draws backlash

A tax on mansion sales in Los Angeles that aimed to raise millions of dollars to fight homelessness has been rebuffed by wealthy Angelenos.

The tax on homes of $5 million and above was supposed to help those less fortunate. It was approved by ballot last year and launched on April 1.

But the initiative, formally called United to House LA, will not raise what was expected.

It faced swift backlash and came under criticism from taxpayer rights groups who filed a lawsuit to stop the tax, despite the money being earmarked to help tenants, prevent evictions and provide affordable housing.

Realtors said some homes in Los Angeles are being priced just under $5 million to avoid the mansion tax scheme all together, The Washington Post reported earlier this month.

Other cities, such as San Francisco and New York, have similar policies, but Los Angeles was the first to try and use the tax directly from the real estate sold by the rich to help the poor.

The homeless population in LA has grown by 32 percent from 2018 to 2020, according to the Los Angeles Homeless Services Authority.