The Los Angeles City Council decided on Tuesday (January 28) to delay a vote on proposed reforms to the city’s controversial “mansion tax,” officially known as Measure ULA, leaving the current policy unchanged for now. The delay means reforms will not appear on the June ballot and pushes further debate to the council’s Housing and Homelessness Committee, according to reporting from LAist.
Measure ULA was approved by nearly 58% of Los Angeles voters in 2022. The policy applies a 4% tax on real estate sales over $5.3 million and a 5.5% tax on properties selling for more than $10.6 million. Revenue from the tax funds tenant assistance programs, including eviction defense and rent relief, and supports affordable housing construction. Since its implementation, the tax has raised more than $1 billion for these initiatives.
Some city officials and housing advocates, including Councilmember Nithya Raman, have argued that the tax is slowing the construction of much-needed apartments. Raman introduced a motion last week that would have placed a reform measure on the June ballot. Proposed changes included exempting apartment buildings constructed within the last 15 years, providing relief for property owners affected by wildfires, and altering financing for city-funded affordable housing projects. Raman stated, “Voters were sold a mansion tax. Ignoring the very real impacts on apartment construction — apartments that people want and need and want to move into — doesn’t protect Measure ULA. It weakens it,” as reported by the Los Angeles Times.
Supporters of Measure ULA rallied outside City Hall before the vote, arguing that the tax is working as intended by helping keep tenants housed and funding affordable housing. “Every day we hear the stories of the tenants who are staying housed, who are not being evicted, who are getting the services they need,” said Carla De Paz from the United to House LA coalition, according to LAist.
Opponents, including real estate developers and some housing advocates, cite studies from UCLA and RAND that suggest the tax has contributed to a slowdown in apartment construction, costing the city approximately 1,900 new units per year. These groups argue that exempting new developments from the tax would result in only an 8% decrease in revenue but could boost housing supply.