Los Angeles voters could be asked as early as June 2026 to reconsider how the city’s voter-approved “mansion tax” works, as City Council members move to amend Measure ULA amid concerns the tax is slowing housing construction and could face a broader statewide rollback.
A motion introduced Friday by Councilmember Nithya Raman and seconded by Council President Marqueece Harris-Dawson would place a measure on the June 2, 2026 ballot to amend Measure ULA, a real estate transfer tax approved by nearly 60% of voters in 2022. The proposal is scheduled to be taken up by the City Council on Tuesday.
If approved by the council and later by voters, the proposal would exempt newly constructed multifamily, commercial and mixed-use buildings from the tax for 15 years, create temporary hardship exemptions for properties affected by natural disasters and make a series of technical adjustments intended to ease financing constraints and streamline affordable housing development.
Measure ULA applies a 4% tax on property sales above $5 million (later adjusted to $5.3 million) and a 5.5% tax on sales above $10 million. Since taking effect in April 2023, the tax has raised more than $1 billion for affordable housing production and homelessness prevention, funding tenant assistance and hundreds of new affordable housing units.
But Raman and other supporters of reform argue the tax had unintended consequences, particularly for apartment construction, at a time when Los Angeles faces a severe housing shortage. They also warn that without local changes, Measure ULA could be at risk from a broader statewide effort to curb or eliminate transfer taxes.
“If Measure ULA is going to remain a durable source of funding for affordable housing and homelessness prevention, we need housing projects that actually get built and house families,” Raman said in a statement Friday. “A policy that unintentionally stalls housing production ultimately undermines the very goals voters asked us to achieve.”
Under the proposal, the 15-year exemption would apply to properties transferred within 15 years of receiving a certificate of occupancy for new construction or substantial rehabilitation. The measure would also allow the city to grant temporary, three-year hardship exemptions following natural disasters — including the Palisades fire — when property owners can show the tax would pose an undue hardship.
Additional amendments would give nonprofit developers more flexibility in financing, adjust resale rules to prioritize first rights of refusal for affordable housing groups, and require the City Attorney to complete legal review of Measure ULA-related actions within 90 days of City Council approval.
Economists and housing researchers say the exemption could meaningfully affect development decisions. Shane Phillips, housing initiative manager at UCLA’s Lewis Center for Regional Policy Studies, said Monday that multiple research teams have found that Measure ULA sharply reduced sales of properties valued above $5 million in Los Angeles compared to neighboring cities without elevated transfer taxes, particularly for sites suitable for apartment development.
“Our conservative estimate is that ULA is reducing private development by around 2,000 units per year, including nearly 200 affordable units,” Phillips said. He added that sales of recently-completed multifamily projects account for a relatively small share of Measure ULA revenue — roughly 8% — enough to fund roughly 100 additional nonprofit housing units.
“As someone who voted for Measure ULA and urged others to do the same, I’m excited to see this proposal to fix its unintended consequences while preserving the vast majority of its revenues,” he said, adding that changes such as greater flexibility around loan seniority could also help the city spend the funds more efficiently.
Michael Manville, a professor of urban planning at UCLA, said the proposal would leave the bulk of Measure ULA intact while addressing what he described as its biggest drawbacks.
“Upwards of 90% of the existing revenue would still be collected,” Manville said Monday. By exempting a relatively small share of buildings, he said, the changes could remove some of the measure’s negative unintended consequences— including discouraging turnover of commercial, industrial and multifamily properties, which in turn slows the construction of new housing the city needs.
Richard Green, director of USC’s Lusk Center for Real Estate, echoed that view, noting that exempting new construction could significantly improve project feasibility.
“From an investment standpoint, assuming a discount rate of 8%, it would reduce the effective tax by about ⅔,” Green said Monday. “That might be enough for developments that currently don’t pencil to do so.”
Opposition has come swiftly from the coalition that placed Measure ULA on the ballot. United to House LA, a group of labor unions, tenant advocates and affordable housing organizations, warned that the proposal would weaken one of the city’s most important tools for addressing homelessness and housing insecurity.
“Measure ULA is working,” Joe Donlin, the coalition’s director, said in a statement Friday, citing tenant assistance for more than 150,000 renters and the launch of hundreds of affordable housing units. “It’s irresponsible to propose changes without even an analysis of how much it would cost. Why would we give ‘The People’s Billion’ to the billionaires who already have so much?”
The real estate industry, meanwhile, criticized the proposal as insufficient.
Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, said a temporary exemption does little to address lender concerns about long-term project economics, arguing that the tax still imposes a significant burden on future owners and financing decisions.
“While any kind of relief would be a step in the right direction, Ms. Raman’s proposal is merely kicking the can down the road,” Yukelson said Monday. “No developer or lender wants to wipe out 4% to 5.5% of their equity the minute they go into a project.”
The debate comes as the Howard Jarvis Taxpayers Association gathers signatures for a statewide ballot measure that could sharply limit cities’ ability to impose transfer taxes like Measure ULA. Supporters of Raman’s proposal say adjusting the policy locally could help blunt that effort and avoid a broader rollback.
A majority vote by the City Council would be required to place the proposed changes before voters, who would ultimately decide whether to amend a measure that passed with strong support just more than three years ago.
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