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Down goes Measure EE: Property tax referendum routed at polls

Opponents said the square footage tax, which would have funded schools, targeted large property owners, developers

By Dennis Lynch | June 05, 2019 08:04AM

LA Mayor Eric Garcetti

Voters on Tuesday soundly rejected a proposed parcel tax to fund the Los Angeles Unified School District, a measure that, if passed, would have had the biggest impact on commercial landlords. It was another defeat for a referendum that appeared to take aim at large property owners and developers. In November, voters statewide rejected Proposition 10, which would have opened the door to sweeping new rent control laws.

On Tuesday, just under 46 percent of voters supported Measure EE, well short of the 66 percent needed to pass the measure, according to results from the L.A. County Clerk’s office. Just over 304,000 registered voters cast their ballot.

The commercial real estate industry strongly opposed Measure EE, which had support from some prominent L.A. political figures, most notably Mayor Eric Garcetti. Opponents also said that landlords would likely use rent increases to pass the tax on to tenants.

Measure EE would have created a 16-cent per-square-foot annual tax on built space on properties within the school district for 12 years. The district includes the city of L.A., West Hollywood, and other parts of the L.A. metro area. If passed, Measure EE would have generated an estimated $500 million each year for the school system, roughly the amount of its annual deficit.

Because it was based on square footage, owners of large properties would have been taxed most heavily.

The owner of an average size home in L.A. — 1,800 square feet as of 2016 — would pay around $288 more in taxes annually, while the owner of a 100,000-square-foot warehouse building would be on the hook for $16,000 each year.

Article by The Real Deal

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