L.A. Closer to Scaling Back ‘Mansion Tax’
The 3-year-old Measure ULA transfer levy would not apply to new apartment buildings sold within 10 years of construction
By Greg Cornfield June 18, 2026 5:05 pm
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Los Angeles lawmakers are moving toward asking voters to scale back perhaps the most controversial part of the city’s real estate regulations.
The Los Angeles City Council voted 9 to 5 Wednesday to direct the city attorney to draft a ballot measure that would amend Measure ULA, the city’s so-called “mansion tax,” by exempting newly built multifamily properties sold within 10 years of construction, the Los Angeles Times reported. The draft will need to return to the council for final approval before landing on the November ballot.
Measure ULA, which took effect in April 2023, imposes a 4 percent tax on nearly all property sales above $5.3 million, and a 5.5 percent tax on sales of $10.6 million or more. But, contrary to its nickname, the tax applies to all commercial assets, and developers and analysts have argued that it has been devastating to multifamily development.
Under the ballot measure proposal, the transfer tax would be amended so it would not apply to new apartment buildings sold within 10 years of construction. The tax was initially designed to fund affordable housing construction and homelessness prevention, but the new ballot measure will also allow ULA revenue to be spent on temporary housing.
Measure ULA has raised $1.19 billion for affordable housing production, tenant rental assistance, education and eviction defense. That’s less than half of the $2.7 billion that proponents estimated would be generated by early 2026.
ULA opponents say the extra tax has significantly dissuaded multifamily investment and is worsening the affordability crisis by suppressing new supply. Data from think tank Rand Corporation found that Measure ULA has cut high-value real estate deals by 31 percent, and has had an even worse effect on commercial properties: Multifamily and commercial transactions fell more than 46 percent since the tax’s 2023 inception.
Rand also reported that ULA reduced the production of large multifamily developments by 30 percent. Cityview CEO Sean Burton said his firm was one of the most active multifamily development companies — if not the most active — in the city of L.A. up until recently.
“We are down to our last new development in the city of Los Angeles, and it’s a deal that predated Measure ULA,” Burton recently told CO. “We are not underwriting new development deals in Los Angeles. L.A. has become near impossible to build new housing because of ULA.”
But ULA supporters argue the slowdown in apartment construction is driven more by high interest rates and broader market conditions. They also argue the ballot measure’s exemptions for multifamily deals could reduce annual funding for affordable housing and tenant-protection programs by tens of millions of dollars.
The City Council also voted unanimously Wednesday to draft a separate ballot measure exempting homeowners affected by the Palisades fire from paying ULA for five years, retroactive to Jan. 7, 2025. Councilmember Traci Park, who represents Pacific Palisades, site of some of the worst fires, said Measure ULA has slowed recovery by leaving fire-damaged properties trapped in regulatory uncertainty.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
