To the editor: I have been a builder of commercial properties in southern California for over 30 years. Unfortunately, “The Mansion Tax” led to the practical end of most of the new commercial constructions of the city of Los Angeles (“Letters to the editor»April 9).
How so? A developer hopes to make 20 cents to 25 cents on each dollar invested in land and construction. Removing 5 cents from the top does not seem much, but it is 20% to 25% of profit that a developer would generally hopes to do, which is considerable.
In addition, these same 5% fees would also apply to all future sales of this property, which estimates that the value of 5% to 10% is depressed. If the choice was to develop in Los Angeles or elsewhere, you would choose elsewhere. This does not cancel the fact that Los Angeles has a huge housing shortage. How to solve the problem?
First, start by making the “mansion tax” really a tax on the residences. Make it only apply to sales of unifamilial residential housing rather than for the sale of commercial properties. This will give multifamilial and commercial construction a chance to fight.
Second, eliminate the requirements in force in terms of affordable housing. The salary requirements in force add 30% to 50% to the cost of construction. If we seriously want to resolve the housing crisis that affects us all, we must try to help developers rather than handicate them at a time when, frankly, we need it most.
David Botfeld, Santa Monica
