When Los Angeles voters passed Measure ULA, it was sold as a simple idea: tax luxury homes to fund affordable housing.
But the reality?
This wasn’t a mansion tax. It was a transaction tax on the entire real estate economy—and commercial properties took the biggest hit.
The Misleading Label
Despite the name, Measure ULA applies to any property over $5.3M—including apartment buildings, retail centers, and development sites.
That means the people funding this policy aren’t just luxury homeowners.
They’re housing providers, investors, and developers.
What Actually Happened
The data is now clear:
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Property sales dropped dramatically
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Investors pulled back
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Development slowed
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Housing supply shrank
In fact, studies show transactions fell by as much as 50%—with the biggest declines in commercial and multifamily properties.
Why Commercial Got Hit the Hardest
Commercial real estate trades at higher values by nature.
So while the tax was marketed politically toward “the wealthy,”
it ended up hitting:
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Apartment developers
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Small landlords exiting the market
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Commercial property owners
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Builders trying to create new housing
In other words…
the exact people needed to solve the housing crisis.
The Unintended Consequences
Here’s where it gets worse:
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Fewer deals = less overall tax revenue
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Capital is leaving Los Angeles
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New housing construction is declining
Some projections even show the city could lose more long-term tax revenue than it gains.
Now Even Supporters Want Changes
A growing coalition—including housing officials and policymakers—is now pushing to revise the tax.
Proposed fixes include:
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Exempting new apartment and commercial development
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Temporary tax relief for certain situations
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Adjusting how funds are deployed
But critics argue these changes don’t go far enough.
The Bottom Line
Measure ULA was built on a political narrative—but real estate doesn’t respond to narratives. It responds to math.
And the math is simple:
- Tax transactions heavily → transactions disappear
- Transactions disappear → housing supply drops
- Housing supply drops → affordability gets worse
Final Thought
If Los Angeles is serious about solving its housing crisis,
it can’t afford policies that punish the very people building housing.
Because at the end of the day—
you don’t fix a supply problem by taxing supply.
