Manhattan Beach Considers a Gross Receipts Tax That Would More Than Double Rental Housing Fees
Sharing an important industry alert from Janet Gagnon (Chief Corporate Affairs Officer and SVP, Government Relations) for owners and managers of multifamily property in Manhattan Beach. On Tuesday, August 4, 2026, the Manhattan Beach City Council votes on Agenda Item 10 — a resolution that would replace the city’s flat business license fee with a tax based on gross receipts. If it passes, the measure heads to the November ballot for voters to decide.
A gross receipts tax is levied on rental income while disregarding what it actually costs to provide housing — mortgage payments, property taxes, insurance, repairs and maintenance, utilities, trash hauling, and management. Those costs are substantial and ongoing, yet none of them reduce the tax owed.
More Than Double the Current Fee
The proposed rate of $2.80 per $1,000 of gross receipts would more than double today’s flat fee. Under the current structure, a 10-unit property pays about $200 per year ($20 per unit). Using an average one-bedroom rent of $2,278 in a 5–10 unit building — roughly $273,360 in annual receipts — that same property would owe about $487 per year after the first $100,000 is exempted. That is more than double the current cost.
How Manhattan Beach Compares
Of the 88 cities in Los Angeles County, only seven use a gross receipts business license tax — and four of those (Culver City, Gardena, Hawthorne, and Inglewood) specifically exclude rental housing and keep a flat fee. Among the three that do apply it to rental housing, all charge far less: Beverly Hills at $1.20, Los Angeles at $1.27, and Santa Monica at $1.25 per $1,000. Manhattan Beach’s proposed $2.80 is more than double any of them. No neighboring coastal city — Redondo Beach, Hermosa Beach, Rancho Palos Verdes, or El Segundo — uses gross receipts at all.
Why It Matters for Affordable Housing
Small, independent multifamily owners provide much of the region’s naturally occurring affordable rental housing. A tax that ignores operating costs falls hardest on them and, the alert warns, could push owners to sell to developers for demolition and higher-priced replacement — reducing the supply of workforce housing. The alert also cautions that a ballot measure, once passed, cannot be quickly undone even if it proves harmful.
How to Weigh In
The City Council meets at Council Chambers, 1400 Highland Avenue, Manhattan Beach, CA 90266. Speakers should arrive by 5:30 p.m. (the meeting begins at 6:00 p.m.) and submit a “Request to Address the City Council” card citing Agenda Item 10 before the meeting; each speaker is given two minutes. To attend by Zoom, use the meeting ID 160 132 1409 and the raise-hand feature when Item 10 is heard. You can also email all five council members urging a NO vote, or to exclude rental housing from the measure — be sure to copy cityclerk@manhattanbeach.gov so your comment becomes part of the official record.
This article is shared for informational purposes only. For questions about your property or specific leasing issues, please consult an attorney.
