Looking at multifamily properties specifically, ULA's effect is pronounced. 75% fewer multifamily transactions closed per quarter in the year following ULA's effective date than in the year prior. (Again, note the orange line.)
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For commercial/industrial properties--centers for jobs and manufacturing--the ULA-induced chill is even worse: a 79% drop in transactions year-over-year following ULA's effective date.
More specifically, Measure RE successfully raised assessments on high-value real estate sales but didn't significantly reduce transaction volume, as far as we can see. (Again, look at the orange line.)
While Culver City's market has gone up and & down, the quarterly volume of property sales subject to Measure RE doesn't change much in comparison to property sales that aren't subject to Measure RE.
Culver City's transfer tax doesn't appear to be creating drag on the market. (Unlike ULA)
Why is Measure RE be working so much better than ULA?
Most importantly, RE is marginal. (Early hypothesis to be confirmed)
RE's higher tax rate starts above $1,499,999. So w/a $1.5mm sale, the higher rate only applies to $1.00 of that sale. The remaining $1,499,999 is taxed at the lower rate.
So even if the transfer tax rate increases with property price in Culver City, a higher sale price still always means more revenues to the seller under Measure RE.
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Not necessarily.
ULA was just designed very badly.
By contrast, Culver City's Measure RE transfer tax, which took effect in 4/21, appears to be working without causing damage to the market.
Culver City's transfer tax doesn't appear to be creating drag on the market. (Unlike ULA)
Most importantly, RE is marginal. (Early hypothesis to be confirmed)
RE's higher tax rate starts above $1,499,999. So w/a $1.5mm sale, the higher rate only applies to $1.00 of that sale. The remaining $1,499,999 is taxed at the lower rate.
Shockingly, this is not the case for Measure ULA.