The Los Angeles Mansion Tax Debate: Results, Rebuttals, and Rollbacks
In November 2022, Los Angeles voters approved Measure ULA, a new tax on high-value property transfers. The measure was designed to convert multimillion-dollar real estate deals into a permanent funding stream for affordable housing and tenant protection. Voters endorsed it by a 58 percent margin. The measure was projected to generate between 600 million and 1.1 billion dollars annually, making it the largest local housing revenue measure in city history. By late 2025 the results are significant, but so are the critiques. The state legislature has already moved to narrow ULA through SB 423, underscoring that Los Angeles’ experiment has become a test case and policy lightning rod for California as a whole.
The tax applied to property sales above five million dollars and dedicated revenue to the House LA Fund, which supports affordable housing, rental assistance, and tenant defense. Despite being branded the “mansion tax,” ULA also covered large apartment complexes, commercial towers, and industrial parcels.
In its first ten months, from April 2023 through January 2024, ULA generated 192 million dollars. A report published in April 2024 by researchers from Occidental College, UCLA, and USC concluded that the measure had proven effective in improving housing conditions. Early funds supported rental aid for thousands of households, expanded legal defense for tenants facing eviction, and seeded hundreds of affordable units. Each local dollar raised through ULA leveraged about nine more from outside sources, producing more than half a billion dollars in total investment.
In April 2025, the UCLA Lewis Center published two reports raising concerns. One, by Michael Manville and Mott Smith, found that high-value transactions had declined sharply, with many large property sales falling by about half. Because California reassesses property only at sale, this drop was estimated to reduce annual property tax revenue by about 25 million dollars. A second study by Jason Ward and Shane Phillips linked ULA to a slowdown in housing production. Their analysis estimated that Los Angeles was building nearly one fifth fewer multifamily units than before the tax, including fewer deed-restricted affordable units. They argued that taxing recently built properties generated only a small share of revenue but discouraged hundreds of new homes, and recommended exempting newer projects from the tax.
In September 2025, a multi-college coalition of academics and public interest attorneys responded with a rebuttal. It argued that the Lewis Center studies drew conclusions from too short a timeline and ignored broader market conditions such as rising interest rates, higher construction costs, and escalating insurance premiums. The authors also pointed out that the analysis omitted more than 28,000 units proposed under Mayor Karen Bass’s Executive Directive 1, which streamlined approvals for affordable housing during the same period. While ED1 was not created by ULA, its omission made the Lewis Center’s picture of development incomplete. According to the rebuttal, ULA had raised more than 830 million dollars by mid-2025 and was functioning as intended.
While the academic dispute continued, SB 423 was introduced in the state legislature. The law addressed ULA directly by limiting the city’s ability to apply transfer taxes to certain properties. It exempted newer projects and disaster rebuilds from higher transfer taxes, and defined these exemptions as matters of statewide concern, overriding Los Angeles’ home rule authority.
Measure ULA has remained both a major source of revenue and a focus of controversy. Supporters pointed to the hundreds of millions raised and the expansion of tenant and housing programs. Critics warned that it had reduced high-value sales, weakened property tax revenues, and slowed multifamily development. The rebuttal countered that such conclusions were premature and based on flawed methods.
The central fact is that ULA has turned Los Angeles into a statewide test case for taxing real estate transfers to fund housing. Consideration of SB 423 shows that the state is already reshaping the measure before its long-term outcomes are clear. The question is whether ULA will prove to be a model or a cautionary tale. Its future depends on whether funded projects are delivered, whether revenue stabilizes, and how the balance of power between local control and state oversight is resolved.
