While it hasn’t yet been two years since Measure ULA took effect in Los Angeles, the funding the new real estate transfer tax has generated has led to some housing wins in the city. So far, the tax has helped fund the development of about 800 new affordable homes in LA, and it has helped provide rental assistance to more than 4,000 households.
While Measure ULA hasn’t generated the type of funding that housing advocates and city officials anticipated it would so far, revenue did increase in 2024, according to the Los Angeles Housing Department. City officials plan to soon introduce several additional programs to help prevent and address homelessness, including social housing models like community land trusts.
“It feels like we have the opportunity here to show what progressive legislation can do,” says Laura Raymond, a member of Measure ULA’s Citizen Oversight Committee. The committee is tasked with overseeing the measure’s implementation and advising the city about programming.
Los Angeles voters were made quite a few housing promises if they approved Measure ULA in 2022. How many of those promises have been delivered? How much money has the tax raised so far? And what’s coming soon?
[Editor’s Note: Shelterforce reached out to representatives of the Los Angeles Housing Department to inquire whether the recent wildfires would affect the rollout or use of the ULA funds, but we did not hear back before publication.]
What is Measure ULA and How Is It Working Out?
Measure ULA (United to House Los Angeles) was created and promoted by a coalition of worker unions and housing advocates by the same name. Los Angeles voters passed the measure (also known as the “mansion tax”) in November 2022 and the tax went into effect the following year.
Measure ULA generates revenue to fund several homelessness prevention and affordable housing programs in the city by imposing a transfer tax on Los Angeles real estate sales over $5.15 million. (Exceptions are made, mainly for affordable housing organizations.)
[RELATED ARTICLE: How LA Won the Largest Municipal Housing Program in the Country]
Housing advocates and city officials expect Measure ULA to fund 11 different housing programs with the revenue the tax generates. But only 6 programs were implemented during the measure’s first fiscal year from 2023-2024. Why? For one, the city was forced to operate cautiously. Before Measure ULA passed in 2022, the real estate industry spent $8 million to campaign against the tax. Once the measure was enacted, opponents filed lawsuits against it. (City officials say they expect those cases will be resolved this year.) Opponents also introduced a ballot measure to limit the state’s and cities’ ability to impose taxes. (That measure was struck down by the state Supreme Court before the 2024 election.)
The pushback led the city to use a limited amount of the measure’s revenue—$150 million—for programming in the event the funds had to be refunded.
Measure ULA also hasn’t generated the type of revenue it was expected to. Officials and housing advocates anticipated the measure would bring in anywhere between $600 million to $1.1 billion annually. Over the last nearly two years, the tax has raised $480 million.
Why hasn’t revenue meet expectations? For one, developers rushed to sell their homes before the law’s 2023 implementation to beat the clock, something Joe Donlin of United to House LA calls “a one-time anomaly.” Also, after the tax went into effect, sales lagged as the real estate industry waited out the lawsuits and opposing ballot measure that challenged the law.
Additionally, according to a report by Occidental University, rising construction costs nationwide, the decrease in construction and sales, and spiked interest rates played a role in the lower than expected revenue.
However, the tax is still Los Angeles’s biggest housing funding source, and sales are recovering. Revenue in December 2023 was over 8 times that of ULA’s first month, according to the Occidental University report. And the biggest month was November 2024, when the tax generated $40 million.
“We’ve had a series of new all-time highs in terms of monthly revenues [in 2024],” says Donlin.
Revenue may further increase following Los Angeles’s recent zoning reforms that encourage housing development.
What Has Measure ULA Accomplished?
Delays aside, Measure ULA’s supporters say the tax is successful: it’s raising millions and has already helped the city fund multiple affordable housing projects. In the measure’s first year, 795 units were funded across 9 separate projects. The first residents of those units will move in this year, Donlin says.
The funding the tax has generated has also provided emergency rental assistance to thousands of Los Angeles residents, helping them pay overdue rent and keep them in their homes.
Rental assistance was given to tenants who experienced financial hardship, including those who lost a job or who owed rent to their landlords. Households that earned less than 80 percent of the area median income qualified for assistance. (For a four-person household in Los Angeles, that’s under $100,900.) Qualifying households received as much as six months of rent payments from the city. As of August 2024, the program paid out $30 million to 4,302 households, according to the city, but those households represent just a portion of the nearly 27,000 eligible tenants.
The cost of an eviction is great on all of us as taxpayers and perpetuates an already devastating housing crisis here in LA.”
Deepika Sharma, Measure ULA’s Citizen Oversight Committee
According to Raymond, similar rental assistance during the pandemic demonstrably decreased homelessness rates. She expects Measure ULA’s rental assistance has done the same, although it’s too early to compare the data.
Deepika Sharma, also a member of Measure ULA’s Citizen Oversight Committee, said many of the tenants who received assistance owed less than $2,700 in rent. In Los Angeles, most families are living on the edge. According to a 2019 Urban Institute report, 849,000 families in the city don’t have $2,000 to fall back on in an emergency. Owing a few thousand is devastating and puts a family at risk of losing a home.
“Not only is that awful for tenants and their families but the cost of an eviction is great on all of us as taxpayers and perpetuates an already devastating housing crisis here in LA,” Sharma wrote in an email. (Aside from being financially detrimental, evictions are also traumatizing and unhealthy for residents.)
What’s Next for Measure ULA?
With the tax generating more funding as of late, Measure ULA’s Citizen Oversight Committee is now planning to quickly roll out all the measure’s initially planned programs, laid out in the original ordinance. In November 2024, a proposal for the final program guidelines passed the city’s housing and homelessness committee with minor amendments, and the council approved those guidelines in December.
Measure ULA will now expand its offerings to include several new programs, including social housing initiatives, bringing its program count to 11.
“We are in such a multifaceted housing crisis in the city of LA that has been building for decades, frankly, and it’s going to take many different interventions to address it,” says Raymond.
The new programs include:
- A program for alternative models of permanent housing—This program applies to a range of housing types. New multifamily developments count, along with preservation and rehabilitation. Community land trusts, cooperatives, publicly owned housing, and nonprofit-owned housing all qualify. No matter the model, the residents of the property must “have the right to participate meaningfully in the governance of the project,” according to the guidelines.
- The homeownership opportunities program was created for low-income single-family and cooperative housing. It includes downpayment assistance, shared-equity homeownership, and funding for new housing.
- The capacity-building program engages and supports tenants to make use of these programs.
Another program that was approved under Measure ULA’s interim program guidelines is scheduled to launch early this year. The guaranteed income program will support older adults and disabled Angelenos with one-time payments of $20,000. The program will roll out initially to about 550 families. In this first year, the families chosen will be applicants of the short-term emergency rental assistance program that the city set aside to receive a greater amount of support.
In California, adults over 50 are increasingly overrepresented in the unhoused population. Like the emergency rental assistance program, the guaranteed income support program is a homelessness prevention tactic. “We’ve seen a lot of seniors falling into homelessness,” says Raymond.
Measure ULA is also set to fund a citywide right to counsel program, which would provide tenants with legal defense to help them fight evictions.
What About the Tenant-Worker Coalition?
Measure ULA isn’t just building housing; it’s also expected to create 10,000 new construction jobs in the city. Donlin of United to House LA says that the law was made possible because the coalition brought together unions and tenant rights groups, under the understanding “that tenants are workers, and workers are tenants, and that there is a tremendous shared interest there.”
Donlin says that the years they spent building that coalition and determining the policy language of Measure ULA “has paid off in tremendous dividends in terms of just the cohesiveness of our coalition, the strength of our coalition, the durability of the coalition.” In other words, the crossover between tenant and worker groups is continuing.
Doing What It’s Intended to Do
According to the measure’s proponents, Measure ULA has been paying off in Los Angeles.
“The big millionaire and billionaire interests continue to complain about ULA, but meanwhile, it’s doing exactly what it’s intended to do,” says Donlin. “We expect to continue to have to respond, or at least hear those complaints, but we know that the people of Los Angeles saw what this really is, which is an important revenue measure that raises money for desperately needed affordable housing and tenant protection programs and homelessness prevention strategies.”
Sharma of the Citizen Oversight Committee attributes some of that negative attention to the moniker “mansion tax.” Instead, she says, Measure ULA should be reframed as an investment: Los Angeles is paying out for affordable housing and tenant rights, which will ultimately benefit everyone. “Labeling it as a burdensome tax is the problem,” says Sharma. “Instead, it’s an investment for all of us into resolving the housing crisis, which benefits every single one of us.”
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This reads like a puff piece for ULA and does not explore any of the major issues, particularly how the coalition disingenuously called it a “mansion tax” when it was also a tax on new apartment buildings and commercial property. The claim that they spent years developing the proposal is also a pretty damning indictment on their competence. For instance, they could have looked to Culver City for a well-designed transfer tax that is marginal. How does it make any sense that a home just under $5 million pays NOTHING in tax but one a few dollars more expensive could pays hundreds of thousands of dollars? ULA will actively undermine efforts to improve housing affordability unless it is amended to AT LEAST exempt all new multi-family buildings. It will also increase the already significant incentive for LA property owners to just sit on vacant/underutilized lots. A reduction in property transactions means fewer properties paying property tax on the actual value of the land, potentially jeopardizing billions of dollars over time in tax revenue.