Los Angeles is doubling down on its affordable housing fund—but with a narrower approach than some had hoped. The City Council's ad hoc committee on Measure ULA voted 2-1 on Friday to reject a broad ballot measure that would have slashed the city's "mansion tax" nearly in half, choosing instead to pilot a more targeted tax break for newly constructed affordable housing.
Measure ULA, approved by voters in 2022, taxes real estate sales over approximately $5 million to fund affordable housing and homelessness prevention. Since taking effect in April 2023, the measure has generated just over $1.1 billion from 1,633 real estate transactions and funded about 800 new affordable units while helping stabilize thousands of renters facing eviction. Yet the measure has proven controversial. The city initially projected it would generate around $500 million annually—about half of what proponents promised—and some studies suggest the tax may have slowed apartment construction in Los Angeles.
A proposal by Councilmembers John Lee and Marqueece Harris-Dawson would have asked voters in November to reduce the ULA transfer tax rate for multifamily and mixed-use properties from the current rate of up to 5.5% to somewhere between 2% and 3.5%. Committee Chair Ysabel Jurado, who advanced the substitute language, argued against taking the broader measure to ballot. "I'm against going to the ballot, but I'm for making fixes that make this better," she said, citing concerns that it was too early to evaluate the measure's long-term effects.
Instead, the committee advanced a five-year pilot program that would reduce the property transfer tax to 1.5% for newly constructed affordable housing projects meeting specific requirements. This narrower approach doesn't require voter approval, sidestepping the political minefield ahead: the Howard Jarvis Taxpayers Association has already qualified a statewide ballot measure for November that would effectively repeal Measure ULA entirely.
The data tell a complicated story. The city's chief legislative analyst reviewed seven independent studies on ULA's impact. Three concluded the tax had suppressed housing production and reduced property tax revenues, while four found no meaningful negative impact. Transfer tax revenue did drop—from approximately $22 million monthly before ULA to about $13 million afterward—but the city's chief legislative analyst Henry Flatt noted a similar decline occurred in nearby cities without the tax, including Glendale, Long Beach, Pasadena, and Santa Clarita. "We are not currently convinced that Measure ULA has had an extremely negative impact on general fund revenues," Flatt told the committee. However, the L.A. County Assessor's office offered a different read, with Assistant Assessor Scott Thornberry reporting that commercial and industrial property sales are falling in the city but not elsewhere in the county.
Supporters and critics alike praised the committee's restrained approach. Joe Donlin, director of the United to House LA coalition that campaigned for the original measure, said the council made the right call by rejecting broader exemptions. But the "Mend It, Don't End It" coalition—a group of housing developers, union workers, and advocacy groups—noted that independent research shows Measure ULA has slowed housing production at a time when Los Angeles needs more homes, not fewer. As the November ballot looms with the threat of total repeal, the pilot program represents a compromise: proof that the city can adjust its approach while keeping its affordable housing engine running.