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Steve Lopez: A $50 million condo for sale in the land of tents is a special kind of LA crazy

Steve Lopez, Los Angeles Times on

Published in Home and Consumer News

"It was in absolutely magnificent condition," said Hyland, but the new owner didn't like the layout. So he took a wrecking ball to the house to make way for a rebuild.

We do have it all, don't we? A $35 million tear-down in the middle of a tent city.

Regarding the expected property taxes on that $50 million condo, I called L.A. County Assessor Jeffrey Prang, who helped me crunch the numbers. The buyer is going to have an annual tab of $580,000, give or take.

Of that, about 40% ($200,000) would go to K-12 schools and community colleges. About 24% ($120,000) would go to L.A. County for various services. Roughly 15% ($75,000) would go to West Hollywood, and the remaining 21% to various public agencies and special districts.

That's a lot of money, and it has to be paid annually. But as USC professor Jeff Kleinbard argued in my column on the $35-million tear-down, real estate is a big factor in wealth inequality, and the government subsidizes home ownership through various tax credits and deductions.

And there's so much wealth in the top tiers in L.A., prices keep rising for everyone, even though the market has cooled a bit lately. Prang says the assessed value of commercial and residential property in L.A. County rose by a record $122 billion last year, to $1.89 trillion. That can be good if you're ready to cash out, but not so good if you're struggling to buy your first house or cover the rent.

Prang said many of his employees in the assessor's office, and other local government offices, commute to Riverside and San Bernardino counties because of greater affordability.

"You can't go to dinner with people after work, and you can't go to your kids' ballgames," he said of those who lose hours every day schlepping to and from work.

 

In November, voters in the city of Los Angeles will see a ballot measure that would increase the real estate transfer tax on homes and commercial properties that sell for $5 million or more, and Santa Monica has a proposal to bump the tax on sales above $8 million.

Backers of the L.A. measure — supported by dozens of housing, homeless services and labor groups — say it would generate $875 million a year for homelessness prevention and affordable housing, with the operation managed by a citizen-led committee.

Keep your eye on this one, because the real estate industry is girding for battle, arguing that the tax bump will stall sales and drive high rollers out of Los Angeles proper and into nearby locales.

It's hard to imagine such a hardship, but those who do bail out won't have to travel far, if they're willing to live in a condo.

They better move fast, though, because the prices keep rising.

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©2022 Los Angeles Times. Visit latimes.com. Distributed by Tribune Content Agency, LLC.

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