People have analyzed Measure ULA from a strictly intent-based perspective. Supporters have pointed to the nearly $1.4 billion in revenue collected by the city and the $467 million Homes for L.A. funding round, of which $324 million is from ULA, recently approved by the Los Angeles City Council. Detractors have cited the negative effect the measure has had on real estate transactions. Ultimately, people emphasize what they believe the law accomplishes or what they believe the law fails to do.
I am less interested in the intent of the law and more concerned with the effects the law has on the housing market. There are on-market and off-market real estate deals.
Both affect housing supply and demand. My focus is on the off-market transactions. I have a financial interest in the real estate market as I am a direct buyer of real estate in Los Angeles County, and I benefit when owners decide to sell. I provide my opinions on real estate market transactions based on my experiences as a market participant.
I try to estimate ULA’s true costs for property owners, so here is a realistic example of what ULA actually means from a financial perspective. If a sale is under $5.4 million, no ULA is due, and the regular city and county transfer taxes come to approximately $30,000. If a sale crosses $5.4 million by even a dollar, ULA adds approximately $216,000, bringing the total transfer tax to about $246,000. A sale of a $10.9 million property would result in total transfer taxes of approximately $660,000. These examples illustrate the true financial effects of ULA on a real estate transaction.
A 2025 study by the Lewis Center at UCLA reports that since the implementation of ULA, sales of multifamily, commercial and industrial properties in the City of Los Angeles have decreased by 30-50%, and the likelihood that a property sells for a price above the ULA threshold has decreased by about 50%. A separate study by researchers from Harvard, UC Irvine and UC San Diego, published in August, estimated that for every ULA dollar collected, about 80 cents of potential property tax revenue is lost.
Examining the shift
Measure ULA has clearly shifted the Los Angeles real estate market. In this new market reality, an owner of a property that sells for $5,450,000 would receive about $5,201,000 after paying approximately $218,000 in ULA plus about $30,500 in regular transfer taxes. If the same property sold for $5,390,000, the seller would clear about $5,360,000. In this case, the seller would pay no ULA tax and be about $158,000 better off, before the commission is paid.
ULA has obviously shifted the thinking of potential buyers and sellers. Sellers have an incentive to price their property at or below the threshold, and buyers negotiate to keep the price under it. Some sellers, however, have chosen not to sell at all.
ULA has also changed the thinking of small landlords. Recently, a potential seller asked me how much ULA they would have to pay on the sale of their small apartment building. Because the sale price was well below the threshold, ULA did not apply. Even so, the potential seller decided to keep the property.
Below the threshold, the tax is not due.
Even so, sellers still ask about it. The first questions are whether the property is located in the City of Los Angeles and whether the sale price is above the threshold. Sales below the threshold only owe the regular city and county transfer taxes.
Here are some things to consider. Measure ULA has not stopped high-end sales. In fiscal 2025, the city collected approximately $413 million from ULA, and approximately 60% of the transactions that paid it were single-family homes. Rising interest rates and homeowners insurance costs, both occurring at the same time as ULA, have also weighed on sales. Likewise, voters passed ULA in November 2022, and it took effect in April 2023.
Some owners rushed to close escrow in late 2022 and early 2023 to avoid the tax, which makes before-and-after comparisons harder.
What does the future hold?
Since ULA took effect, other shocks have hit the market, including rising rates, insurance costs and the 2025 wildfires. Many people believe they know the exact number of home sales ULA has prevented, but they are speculating. The exact number cannot be known because of the other large impacts on the housing market since 2022.
Here’s what I think. People may finally be able to stop debating the same things and start taking actions that lead to positive changes. For a long time, people have pushed for changes to ULA without success. In July, the City Council shelved a November ballot measure that would have exempted new multifamily housing from ULA. In June, the statewide initiative that would have repealed ULA was withdrawn, and Assemblymember Buffy Wicks’ AB 736, which would cap most transfer taxes at 1.5%, has stalled. If any changes are going to happen, they will have to come from City Hall.
No one can say for sure whether ULA is good or bad. I think the real question is whether it is in the city’s best interest to impose ULA as a cliff at $5.4 million. The tax could be applied only to the amount above the threshold, which would remove the incentive to price properties just under the line.
Recently constructed housing should also be exempt from ULA for a period of time. And the city should study whether the property tax revenue lost to ULA is warranted, and whether the tax is helping the city meet its goals of providing affordable and workforce housing.
L.A. voters supported ULA to fund housing. But the decision owners make about whether to sell at all deserves equal attention.
Victoria Sharma is the manager of Cash Home Buyers CA in Woodland Hills. Her company buys homes directly from owners.
