Full Breakdown
The Battle Over California's Mansion Tax: Measure ULA and Its Implications
10/14/2025, 1:50:02 AM
Overview of Measure ULA
In 2022, Los Angeles voters approved Measure ULA, a tax initiative targeting high-value real estate transactions, specifically properties sold for over $5 million. The measure imposes a 4% tax on sales between $5 million and $10 million and a 5.5% tax on sales exceeding $10 million. Since its implementation in 2023, Measure ULA has generated approximately $830 million, primarily funding affordable housing projects and services for the city's unhoused population.
The Statewide Response
The Howard Jarvis Taxpayers Association, a group advocating for lower taxes, is spearheading an effort to place a measure on California's November 2026 ballot aimed at capping transfer taxes and raising the electoral threshold for local tax measures from a simple majority to two-thirds. This proposed amendment directly challenges Measure ULA, which has been criticized for its impact on housing development and local economies.
Economic Impact and Criticism
Critics argue that Measure ULA has stifled new apartment construction in Los Angeles, contributing to a housing crisis. Research from UCLA and the Rand Institute estimates that the measure has led to a reduction of approximately 1,910 apartments annually, including 168 affordable units. Furthermore, a study by Harvard, UC Irvine, and UC San Diego indicates that property tax collections have significantly declined, offsetting an estimated 63% of the revenue generated by the transfer tax.
Supporters of Measure ULA contend that the funds are essential for addressing homelessness and that the program is in its early stages of distributing nearly $400 million to boost affordable housing development. However, there is growing concern among local officials that the measure has become a political liability, potentially fueling the campaign for the statewide tax limitation initiative.
Legislative Attempts to Modify Measure ULA
In the final days of the California Legislative session, efforts led by Los Angeles Mayor Karen Bass and former Assembly Speaker Bob Hertzberg aimed to amend Measure ULA through Senate Bill 423. This bill sought to exempt certain new residential developments from the tax and provide more flexibility for affordability requirements. However, the proposal was contingent on the Howard Jarvis Taxpayers Association withdrawing its ballot measure, complicating negotiations and ultimately leading to its failure.
Conflicting Reports and Future Implications
The potential consequences of the proposed statewide measure are significant. An analysis by the League of California Cities suggests that cities could lose between $2 billion and $3 billion annually if the measure passes, impacting funding for housing and homelessness services. This includes substantial losses for municipalities like Santa Monica and Berkeley, which rely on transfer taxes for their budgets.
As the Howard Jarvis Taxpayers Association continues to gather signatures and raise funds for its initiative, the future of Measure ULA remains uncertain. The political landscape in California is poised for a contentious debate over taxation and housing policy, with implications that could resonate well beyond local jurisdictions.
Verbatim Quotes
- “Measure ULA is the tail wagging the dog,” — Mott Smith, Developer and Board Member, California Infill Builders Association
- “Their opportunity to ambush us is now over.” — Jon Coupal, President, Howard Jarvis Taxpayers Association
- “This is now the vehicle for unions and others to be able to try and pass new taxes on targeted business sectors using a majority vote,” — Rob Lapsely, President, California Business Roundtable
The ongoing debate surrounding Measure ULA highlights the complexities of housing policy and taxation in California, reflecting broader tensions between economic growth and social welfare initiatives.
