Commercial Real Estate Property Tax Increase From Proposition HHH
Los Angeles City commercial real estate property owners will feel a small bump in property taxes as a result of Proposition HHH passing in the election on November 8, 2016.
A .01 percent increase on all taxable properties in the city of Los Angeles will be added on top of the property owner’s annual property taxes, Doug Smith Senior Writer at the Los Angeles Times said.
The city will issue bonds to borrow up to $1.2 billion to build 10,000 units of supportive housing (apartments that include counseling services) in the next 10 years for the chronically homeless in Los Angeles City.
Rachel Brashier Policy Director at City Councilmember Marqueece Harris-Dawson’s Office said the bonds from Proposition HHH will be paid back through a tax based on the assessed value of properties within the City, loosely estimated at $9.64 annually per $100,000 of assessed value for 29 years.
A commercial property owner who owns a 355,000-square-foot office building valued at $120 million will pay about $11,568.00 in additional property taxes annually. However, most commercial property owners don’t mind paying the extra money in taxes because the money goes to house some of the 28,000 homeless people now living in the city.
Proposition HHH includes the following:
• The city will borrow up to $1.2 billion through bonds over 10 years for construction projects to provide counseling and housing for the homeless
• Bonds will be repaid by the added property taxes over 29 years
• Provides facilities for mental health, drug and alcohol treatment
• Requires 80% of the money be directed to permanent counseling & housing
• Up to 20% could be spent on conventional affordable housing without services
• An unspecified amount could be spent on shelters and other measures such as portable showers and storage facilities for the homeless.
• Strict oversight and independent audits of funding