- As Los Angeles looks ahead to rebuilding after devastating wildfires, real estate agents wrote a letter to city and state officials with ideas for helping to expedite the process. One of them is a temporary suspension of LA's so-called mansion tax.
Los Angeles real estate agents wrote a letter to city and state officials with ideas for helping to expedite the rebuilding process after wildfires ravaged the area.
Written by Jason Oppenheim and Ben Belack, with signatures from about 50 other brokers, the letter was directed at LA Mayor Karen Bass, California Gov. Gavin Newsom, and relevant regulators.
"From the front lines, we have a unique perspective of the challenges that lie ahead in navigating the aftermath of this disaster," it said. "Los Angeles has faced its share of natural disasters, and we are strong. We will rebuild."
Dated Jan. 13, it lists five requests. The first is for the state's FAIR Plan, the insurer of last resort, to increase its maximum coverage for residential properties to $6 million from $3 million and include liability insurance. The letter also calls on California to get more insurers to re-enter the state.
Second, the real estate agents requested a special exemption from the city's "mansion tax," allowing property owners who lost their homes in the fires to sell their land to avoid paying it. Buyers and developers of affected land would also be exempt from the tax on any resale for five years after purchase.
The ULA Tax went into effect in 2023 and includes a 4% levy for properties sold for $5.15 million to $10.3 million and 5.5% for properties for $10.3 million or more.
"The City should not impose taxes on individuals who lost their homes in the fires," the letter said. "Exempting developers from the transfer tax for five years will encourage them to purchase land from homeowners at reasonable prices and quickly rebuild these devastated communities."
Third, the brokers call for special exemptions from "any restrictive building policies" or other codes to help homeowners rebuild the same home that previously existed on their land.
Fourth, the letter asks the city and Coastal Commission to expedite the permitting process, reduce fees, and suspend debris hauling route limits. And finally, it said property taxes should be paused for any property affected by the fires—until it's rebuilt or immediately re-assessed at land value.
The mayor's office and the governor's office didn't respond to requests for comment on the letter. Oppenheim told Fortune he has yet to hear back from them either.
To be sure, Newsom and Bass have already taken some steps to ease red tape. Last weekend, the governor suspended key environmental laws to speed up rebuilding and said a "Marshall Plan" for the city is taking shape.
Bass vowed to turn "away from the usual city system" and on Monday issued an executive order to exempt affordable housing projects from some zoning reviews and directed all department to expedite approvals for utilities and other permitting requirements.
Meanwhile, the mansion tax hasn't generated as much revenue for the city as it had hoped. In August, officials said it raised more than $375 million in its first year, just a fraction of projections of up to $1.1 billion annually.
And most of that revenue didn't actually come from mansions. About 46% was from single-family homes, while 54% came other properties, like offices, retail stores and multifamily units.
