Los Angeles is in the grip of a housing crisis that is years in the making. But while the rest of California has begun to move, with new legislation, new permitting and new momentum, Los Angeles is falling further behind. The biggest reason why is Measure ULA.
Approved by 58% of voters in November 2022 and falsely sold to the public as a “mansion tax,” Measure ULA applies a 4% transfer tax to all real estate transactions (not just mansions) above $5.4 million and 5.5% on transactions above $10.9 million. In practice, it functions as a tax on housing production itself, falling squarely on the multifamily developments the city desperately needs.
The results have been devastating. According to a recent RAND report, “The Effects of Measure ULA on Economic Development and Municipal Finances in Los Angeles,” Measure ULA caused $452 million in forgone tax revenue to local, county and state agencies between 2023 and 2026, including $80 million in lost funding for Los Angeles Unified School District. Large apartment building production declined by an average of 30%. High-value real estate transactions dropped 31%. And because rents in buildings sold under Measure ULA have grown faster than comparable properties, the tax is passing through additional costs to renters. This is clearly not what Angelenos signed on for.
The lost jobs are even more harmful: an estimated 16,650 full-time construction positions lost in three years.
Measure ULA has raised $1.2 billion since its passage. A notable sum, but far short of the $2.7 billion originally projected by early 2026. More importantly, because the measure was drafted so poorly, almost none of those funds have produced new housing.
The permitting data tells the same story. Los Angeles has permitted just 81,306 units against its 2021-2029 Regional Housing Needs Assessment goal of 456,643 by 2029 – a mere 17.8% of the target with the deadline fast approaching. Many permitted units will never be built, making the real number even bleaker. Without Mayor Karen Bass’ Executive Directive 1 expediting 100% affordable projects, the figures would be even worse.
Some will attribute the slowdown in housing production to high interest rates, tariffs or other macroeconomic headwinds. Those factors are real, but they’re hitting every city and every market. Only Los Angeles is experiencing this magnitude of decline. Only Los Angeles has Measure ULA.
Little movement on reform
The Los Angeles Business Journal named Cityview the city’s most active multifamily developer of the decade. Unfortunately, today, we are down to our last project in Los Angeles – one that predates Measure ULA.
Our pipeline is moving to Culver City, San Diego, Irvine, Seattle, Walnut Creek, Denver and elsewhere outside the city of Los Angeles. We desperately want to continue to build housing in our home market, but ULA has made it nearly impossible to do so.
In January, Councilmember Nithya Raman introduced a motion for a ballot initiative that would exempt new multifamily, commercial and mixed-use construction from the tax for 15 years. Rather than act, the City Council formed an ad hoc committee that, after four months, recommended doing nothing.
In early July, the City Council shelved a proposed measure that would have exempted newly constructed mixed-use and residential buildings for 10 years. Sacramento, meanwhile, is having the conversation Los Angeles refuses to have.
In late June, Assemblymember Buffy Wicks introduced AB 736, which would cap real estate transfer taxes at 1.5% in most California jurisdictions and 3% in cities like San Francisco, and would directly reduce Measure ULA’s top rate of 5.95% on the city’s largest transactions. The bill surfaced as a counter to a Howard Jarvis Taxpayers Association ballot initiative that would have capped local transfer taxes statewide at just 0.11% – a measure the association has since withdrawn after negotiating a separate deal with legislators that raises the threshold for passing new special taxes to two-thirds of voters. AB 736’s path forward is now unclear and probably unlikely to pass, blocked by special interests who don’t want the taxes reduced. But state lawmakers are actively debating how to fix an overreaching transfer tax. Los Angeles’ own City Council won’t even bring the question to a vote.
Reform is possible. RAND found that exempting new multifamily and commercial buildings for 15 years, while taxing older buildings at a lower rate and maintaining the existing tax on single-family homes, would recover $823 million in net present value over 10 years, including $198 million for LAUSD.
It would produce nearly 19,000 new housing units, roughly 2,000 of them income-restricted affordable, and generate more than 33,000 full-time construction jobs. All while preserving 72% of current ULA revenue.
This is not a close call. Multiple independent studies reached the same conclusion.
Measure ULA is the primary reason new housing is not being built in Los Angeles. Most affordable housing in this city is delivered through market-rate development via inclusionary zoning and state mandates, which means suppressing market-rate production directly suppresses affordable production. You cannot solve the affordability crisis without building.
Every month of delay means fewer units and higher rents for Angelenos who are already stretched.
Measure ULA must be amended. The path forward is clear, the data is unambiguous and the cost of inaction compounds daily. The time for talk is over. Our city leaders must act and fix ULA to allow Los Angeles to start building housing again.
Sean Burton is the chief executive of Cityview, a vertically integrated real estate investment manager based in Century City.
