The mansion tax, enacted as Measure ULA, has led to a significant decline in new multifamily housing developments in Los Angeles, with a reported 18% drop in permits, equating to nearly 1,910 fewer apartments. Although designed to fund affordable housing initiatives through taxes on high-value property sales, its unintended consequences include hampering development and discouraging property transactions. Experts suggest reforming Measure ULA, particularly by exempting certain multifamily projects from the transfer tax, could stimulate growth without severely impacting tax revenues, crucial during a significant budget deficit.
What's commonly known as the mansion tax may have undercut the goals of its backers by slowing development and reducing new affordable housing by an estimated 168 units a year.
We strongly recommend that elected officials reform Measure ULA, exempting multifamily projects from transfer taxes when sold within 15 years of construction.
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