LA agents implore government to pause ULA Tax in wake of wildfires

Authored by Jason Oppenheim and Ben Belack, the letter, signed by 45 agents, also asks officials to increase wildfire insurance coverage, make an exception for codes and pause property taxes

by Lillian Dickerson

Top agents in Los Angeles have sent a letter to government officials in California imploring them to respond to the wildfires that have devastated the city in the last week by making strategic adjustments to real estate-related laws, regulations and building codes to enable communities to recover from the disaster.

The letter, authored by Oppenheim Group President and founder Jason Oppenheim and leader of the Ben Belack Group at The Agency Ben Belack, was sent to California Governor Gavin Newsom, Los Angeles Mayor Karen Bass and related regulatory agencies, and was signed by 45 top agents in the area, including Aaron Kirman, Joyce Rey, Josh and Matt Altman, Jade Mills, Mauricio Umansky, Rayni Williams, Kurt Rappaport, Sally Forster Jones and more.

The letter outlines five specific areas of adjustment to help communities cope with the disaster: California FAIR Plan Insurance coverage, the ULA Tax, building policies and codes, restrictions laid out by the Coastal Commission and the City of LA, and property taxes, The Real Deal first reported.

“On behalf of the entire real estate community, we extend our heartfelt sympathies to those affected by the fires in and around Los Angeles,” the letter reads. “As we take on the responsibility of helping entire communities find housing to replace the homes we helped them secure, we are deeply immersed and understand the new landscape of this crisis. From the front lines, we have a unique perspective of the challenges that lie ahead in navigating the aftermath of this disaster.”

“In the spirit of rebuilding, we are calling for practical adjustments to laws, regulations, and building codes for those most affected by this disaster,” it continues.

Here’s how the real estate leaders propose the state and local government adjust their policies to help the communities struggling right now.

California FAIR Plan Insurance coverage

The California FAIR Plan gives state residents basic fire coverage of up to $3 million when it is not available from a traditional insurance carrier. LA agents argued in their letter that this protection should be increased to $6 million and include liability insurance to allow more homeowners access to coverage. They also urged the government to work with insurance providers to re-enter the state’s insurance market, even if it means that homeowners will have to pay higher premiums.

In recent years, a number of insurance companies either dropped out of California or steeply increased their premiums, putting many homeowners in a difficult position. State Farm General, California’s largest home insurer, announced last March that it would not renew 30,000 homeowner and condo policies when they expired, including over 1,600 policies located in Pacific Palisades. Allstate stopped writing new insurance policies in 2022, as did Chubb and its subsidiaries in 2021 on those homes that were at a high value and at a high wildfire risk. Tokio Marine America Insurance Co. and its subsidiary Trans Pacific Insurance Co. left the state in 2024.

The ULA Tax

Many LA agents and brokers have been vocal about their discontent with the county’s ULA Tax, which went into effect in April 2023 and levies a tax of 4 percent on properties priced at or above $5 million and a tax of 5.5 percent on properties at $10 million or higher, for which the homeseller is responsible.

The letter urges officials to allow property owners who lost their homes in the wildfires to sell their land without being subject to the tax and also allow developers and other buyers of the land to be exempt from the tax on any resale for a period of five years after their purchase. Such an exemption will encourage developers to buy the land and rebuild more quickly, LA agents argued.

Building policies and codes

Many homes that were lost in the wildfires predated current codes, ordinances and proposed restrictive building policies, including the proposed Wildlife Ordinance, which was passed by the City Council’s Planning and Land Use Committee and is being reviewed by the City Attorney’s office. The ordinance would limit a property’s square footage, grading, landscaping, types of fencing and walls and more.

LA agents urged government officials in their letter to allow local departments of Building and Safety an exemption from such policies to allow homeowners to rebuild the same exact home that previously existed on their land. Agents argue that this exemption will help prevent placing further financial hardship on families as they rebuild.

Coastal Commission and City of LA restrictions

Oppenheim and Belack also called out processes of the Coastal Commission and City of LA to approve developments in compliance with the Coastal Act (which in part dictates how developments can be built on California’s coastline) as unduly cumbersome and lengthy, which can result in adding months or years to the rebuilding process, as well as significant financial costs as a result of delays.

Specifically, the agents said that the government entities should define and expedite the plan-check process, reduce fees and suspend dirt and debris hauling route restrictions to reduce hurdles for homeowners and developers.

Property taxes

As homeowners struggle with new expenses in the wake of the wildfires, LA agents also urged government leaders to pause property taxes for those properties that have been impacted by the fires until the property can be rebuilt or reassessed at land value.

“California should not profit from their loss until their homes can be rebuilt,” the letter states.

The city and agents also battle price gouging

Plenty of people have banded together to help the community during this trying time, but unfortunately, many others have already taken advantage of the tragedy to prey upon the vulnerable through price gouging, agents have reported.

“I have fired a couple of clients because of the price gouging,” Rochelle Maize of Nourmand & Associates told Inman. “It’s disgusting. I don’t want to be involved with it. There’s always going to be opportunities, unfortunately, even in a disaster. And you have these individuals who lease their property out for $20,000 or $15,000 per month, and now it’s time to lease it again and they’re asking $25,000 or $30,000, and it’s disgusting.”

Some of the price hikes have been driven by desperate evacuees who are willing to offer more than the asking price for a lease or a for-sale property with six months of cash upfront. But the more horrifying increases have come from landlords and sellers themselves.

Under state price gouging rules that took effect on Jan. 7 after Gov. Newsom declared a state of emergency, landlords cannot charge more than 10 percent above what they were advertising before the state of emergency. But agents have told Inman and other news outlets that they’ve easily seen rental prices that are 20 percent higher than they were before the fires broke out.

“On its own, organically, [prices] are going higher, I would say as much as 20 percent or more,” Maize said. “But you also have the other side of it — the disgusting price gougers that are trying to capitalize.”

Over the weekend, California Attorney General Rob Bonta warned those tempted to engage in price gouging that such actions are in violation of the law and bad actors would be held accountable. Those convicted of price gouging can face jail time of up to one year and fines, Bonta said.

Oppenheim and Belack’s letter also mentioned that agents were committed to not engaging with price gougers.

“We will not assist landlords who attempt to exploit this crisis by raising rents above pre-disaster market value,” the letter reads. “We are committed to placing available homes on publicly accessible platforms like the MLS to increase access for those affected by the crisis.”

The LA DA’s office held a press conference at 2 p.m. PT on Monday to address charges against suspects in arson and looting across the city as communities grapple with the immense loss caused by the wildfires.

One individual had impersonated a fire fighter in order to loot properties in Pacific Palisades, making homeowners worst nightmares turn into reality, Los Angeles County Supervisor Lindsey Horvath said. “This behavior is unacceptable,” she said.

Los Angeles City Attorney Hydee Feldstein Soto also reassured the public that her office would be targeting attempts by bad actors to loot, price-gouge, trespass, commit fraud “to make sure no individual gets away with illegal or predatory conduct.”

Soto also noted that individuals who commit price gouging can face both criminal and civil charges, with up to a year of imprisonment and steep fines attached to such charges. Her office has developed a price gouging task force and is developing an intake system where individuals can submit price gouging complaints.

Individuals who would like to contact the price gouging special task force can do so by email at [email protected] or by phone at (213) 679-5035.

Via Inman

LA agents implore government to pause ULA Tax in wake of wildfires