LOS ANGELES - Los Angeles officials on Friday took the next formal step toward reopening the fight over Measure ULA, advancing three motions to study whether the voter-approved transfer tax is slowing new apartment construction or properly funding homelessness prevention and affordable housing.
The votes came during the first meeting of a new City Council ad hoc committee created earlier this month to review possible changes to the 2022 measure, also known as United to House Los Angeles. The panel was formed after growing concern at City Hall that the tax may be discouraging apartment and mixed-use development even as it generates major revenue for housing-related programs.
Measure ULA has raised more than $1 billion for homelessness prevention and affordable housing efforts since taking effect. But the tax has also become a flashpoint at City Hall, where some elected officials and housing researchers say it has created unintended consequences for housing production during a shortage.
Despite its "mansion tax" nickname, Measure ULA applies to property sales above $5.3 million, including apartment buildings, commercial properties and mixed-use projects.
"The purpose of this committee is to thoroughly evaluate any proposed changes to ULA in a data-informed process that fully assess both short- and long-term impacts," Councilwoman Ysabel Jurado, who chairs the committee, said Friday.
"We'll hear from experts. We'll hear from our departments, and we'll hear from all of you and our community leaders," she added.
Friday's committee action centered on three separate motions aimed at gathering more information before the City Council considers whether and how the measure should be changed.
One motion directs the city's chief legislative analyst to pursue a contract with a consultant to lead public outreach, with the city seeking feedback from residents and developers on how Measure ULA has affected local development so far. That same motion also asks the Measure ULA Citizens Oversight Committee to evaluate the measure's financial and programmatic outcomes before the outreach begins.
A second motion calls for an independent study of Measure ULA's effect on housing production - a question that has moved to the center of the debate at City Hall as officials weigh whether the tax is undermining apartment development.
A third motion calls for a review of similar real estate transfer taxes in other jurisdictions, including San Francisco and Culver City, as Los Angeles officials look at whether changes elsewhere could offer a model for ULA reforms.
San Francisco's Proposition I, approved in November 2020, increased the city's transfer tax on high-value real estate sales and long-term leases, applying a 5.5% rate to transactions between $10 million and $25 million and a 6% rate to deals above $25 million.
Culver City's Measure RE, also approved by voters in November 2020, imposed roughly a 2% tax on sales from $1.5 million to just under $3 million, 3% on transactions from $3 million to just under $10 million and 4% on sales above $10 million. The measure exempted sales under $1.5 million, affordable housing and the first transfer of new multifamily properties.
The final motion approved Friday seeks an analysis of Measure ULA revenue, spending and program outcomes from April 1, 2023, through Jan. 31, 2026.
Friday's meeting comes as the broader fight over ULA is already intensifying. Earlier this year, the council sent proposed revisions back to committee, including ideas from Councilwoman Nithya Raman to exempt newly constructed multifamily, commercial and mixed-use buildings from the tax for up to 15 years, along with temporary relief for properties damaged by natural disasters.
Raman and other supporters of reform have argued the measure has created unintended consequences for housing production. Research previously cited in City Hall discussions, including UCLA findings referenced by city officials, found ULA has slowed apartment construction, with estimates that it is preventing at least 2,000 market-rate units a year along with hundreds of affordable units.
Supporters of the tax have pushed back, arguing Measure ULA remains one of the city's strongest funding tools for homelessness prevention and affordable housing and warning against using the review process to weaken it.
All three motions approved Friday now head to the full City Council for a future vote.
Editor's Note: This story includes reporting from City News Service, a content partner of Westside Current.
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