How Measure ULA Is Undermining Los Angeles's Housing Goals — and How to Fix It
Measure ULA, sold to voters as a "mansion tax" in 2022, is a 4–5.5% tax on all real estate transactions above $5 million in LA. Its revenues support vital goals of funding affordable housing and homelessness prevention. But three years of evidence show the tax is causing significant harm to new housing production and eroding the city's property-tax base — undermining the very affordability goals it promised to advance.
The good news is these problems are fixable. Measure ULA's failures are not inevitable but rather the result of specific flaws in its design. Targeted amendments can preserve public revenues while dramatically reducing the tax's harm to housing production, commercial activity, and the city's finances.
Published in 2025 by researchers at UCLA, USC, RAND, Harvard, UC Irvine, and UC San Diego, each study uses rigorous methods to compare outcomes inside the City of Los Angeles to neighboring jurisdictions—isolating Measure ULA's effects from broader market conditions like interest rates and construction costs.
Analyzing over 300,000 property sales, UCLA researchers found that non-single-family transactions over $5 million in Los Angeles fell dramatically after ULA took effect. The drop in the city of LA is 50% above and beyond that seen across LA County, despite identical market conditions.
Transactions below the ULA threshold have kept pace with the rest of the county. The evidence aligns with a clear narrative: investment is shifting to geographies not subject to the tax.
Source: Manville & Smith, UCLA Lewis Center for Regional Policy Studies (2025)
A second study linked parcel transactions to development activity, estimating the tax is responsible for at least 1,910 fewer multifamily units and at least 168 fewer affordable units annually.
Only 6–8% of ULA's revenue comes from sales of new multifamily properties—indicating that the decision to tax new mixed-income housing projects is preventing more affordable housing units from being built than it is able to fund.
Because properties are only reassessed at market value in California when they change hands, fewer transactions mean a weaker property-tax base over time. Economists estimate that for every dollar Measure ULA raises, 63–138% is offset by lost property-tax revenue. In some scenarios, the fiscal loss exceeds the tax gain—a self-defeating outcome for a city already facing a structural deficit.
While Measure ULA has raised $1.14 billion, it has simultaneously destroyed between $718 million and $1.57 billion in property tax revenues across all taxing entities in Los Angeles County.
Estimated cumulative losses since Measure ULA took effect (midpoint estimates)
Source: Green, Jambulapati, Liebersohn & Velayudhan (2025), Harvard / UC Irvine / UC San Diego
Transfer taxes are not inherently self-defeating. When designed well, they offer one of the few ways local governments can recapture some of the enormous property value increases that Proposition 13 otherwise shields from taxation. The problem is that Measure ULA's specific design amplifies the worst tendencies of a transfer tax while neutralizing its potential benefits.
By taxing a newly built building the same way it taxes decades of passive land appreciation, Measure ULA penalizes reinvestment and redevelopment—exactly the activities Los Angeles needs to increase housing supply, create jobs, and grow its tax base.
Los Angeles is required to permit more than 450,000 new homes by 2029 under its current RHNA cycle. Only a small fraction have been approved. Closing that gap would require permitting on the order of 100,000 homes per year—more than five times the city's recent pace.
Progress at that scale depends on a steady flow of land transactions and a regulatory environment that rewards new investment rather than penalizing it. Measure ULA moves the city in the opposite direction.
Homes required vs. recent pace of approvals
Beyond the immediate costs it imposes on new construction, the tax contributes to a broader perception among institutional investors that Los Angeles's development environment is unpredictable and punitive—driving capital to other markets where returns are more certain.
The Howard Jarvis Taxpayers Association has made Measure ULA a poster child for a statewide ballot initiative that would roll back taxes across California and restrict cities' ability to raise tax revenues in the future. If the city fails to act, corrective action at the state level is all but inevitable.
Grant a time-limited tax exemption for new multifamily and commercial projects after construction or substantial rehabilitation — sufficient for private capital to recoup on investment.
Affects only ~13% of ULA revenueExempt all multifamily and commercial properties, refocusing the tax on the high-value single-family transactions voters thought they were targeting. Single-family homes represent roughly 50% of revenues.
Better aligns tax with voter intentApply prior rates to projects entitled before ULA's adoption to avoid destabilizing planned investments made under different financial assumptions.
Protects pipeline projectsAllow capital improvements to be deducted so that productive reinvestment isn't taxed as if it were a windfall gain.
Rewards productive investmentExempt transactions where the seller records a loss to prevent the tax from trapping owners in place and further reducing market liquidity.
Increases market liquidityA more ambitious restructuring could actually increase total public revenue and enhance equity: pairing exemptions for multifamily and commercial properties with a marginal rate structure that captures a larger share of single-family transactions would shift the tax burden onto longtime landowners and away from renters, for whom constraints on new housing supply translate directly into higher rents.
Measure ULA was born out of a sincere desire to confront Los Angeles's housing and homelessness crisis. But the evidence is now clear: as currently designed, it is depressing the construction of both market-rate and affordable homes, eroding the city's tax base, and raising rent burdens for Angelenos.
With thoughtful redesign, Measure ULA can become a tool that raises stable revenue, taxes wealth more fairly, and supports rather than undermines the creation of desperately needed new homes in Los Angeles.