How Will the Measure ULA Transfer Tax Initiative Impact Housing Production in Los Angeles?
Measure ULA is a November 2022 ballot initiative that would increase taxes on the sale of properties valued $5 million or above in the City of Los Angeles. If approved, it will raise an estimated $900 million annually for subsidized housing development, housing acquisition and rehabilitation, rent assistance, and other housing- and homelessness-related purposes. There is concern that Measure ULA may depress new housing production by serving as a tax on apartment development. Specifically, increasing taxes on new multifamily housing could generate very little additional revenue but reduce the production of market-rate and below-market housing. This could result in higher rents and displacement relative to a tax that exempted sales of new multifamily. We develop a model for identifying projects that may be most at risk of not being built because of the increased tax.
