Measure United to House L.A. (ULA), established and voted majority “yes” in November 2022, has been linked to a decrease in new apartment construction, including affordable housing projects the tax was originally intended to support, according to a UCLA study published in April.
Measure ULA took effect in April 2023. The profit was advertised to come from a new 4% tax on properties selling for more than $5 million and a 5.5% tax on properties selling for more than $10 million.
When Los Angeles voters decided yes on the “mansion tax” through Measure ULA in November 2022, proponents for the measure estimated it would raise between $600 million to $1.1 billion per year for housing and homeless efforts.
However, research confirms that Measure ULA is causing an overall decline in building low-income projects. According to the study titled “The Unintended Consequences of Measure ULA,” the city of L.A. is losing about 168 low-income apartments per year and reducing non-single-family home transactions by 7-15% per month.
Angelenos were confused when the “mansion tax” ended up increasing costs more for commercial properties and apartments than for the luxury homes it was originally aimed at.
“Next year, the rent for the apartment I’ll be living in close to USC is about $1,700 a month,” Scarlett Khangbeigi, a sophomore studying English, said. “When I went to tour the place I’ll be living next year, they even mentioned that they will be increasing the rent from last year.”
Khangbeigi said she is concerned about how the mansion tax will affect fellow classmates who are actively searching for new housing.
“I don’t think this is necessarily affordable for the average college student because this doesn’t take into account utilities or other expenses like groceries, transportation and tuition,” Khanbeigi said.
Despite being labeled a “mansion tax,” research details that Measure ULA disproportionately affects properties beyond luxury homes. Housing that is designed for multiple households, like apartments and condominiums, saw the steepest drop, with activity declining by 30–50% over the past two years.
These unintended effects can create challenges for sustaining long-term housing solutions. Constructing affordable housing depends on property turnover, especially the more costly builds that aren’t single-family homes. If a new tax ends up slowing down those deals, it could hurt property tax revenue across L.A. county, according to the UCLA study.
“I find it so sad that people living in L.A’s hope for having a new wave of affordable housing is being taken away,” Lauren Nadal, a communication management master’s student, said. “Voters were essentially lied to.”
USC senior studying business, Alexis Urbina, said he remembers voting in favor of the mansion tax.
“I’ve lived in L.A. my whole life, but it has always been a struggle to afford housing, Urbina said. “When I heard about the mansion tax, I thought it was about time for the rich to be taxed more.”
The researchers estimated the tax would be able to deliver on its promises of more affordable housing if the tax had exempted apartment buildings constructed within the last 15 years. As the ULA measure stands, it already includes some contingencies, such as exemptions for housing built by nonprofit developers.