In a 9-5 vote Wednesday, the Los Angeles City Council approved a proposal to draft ballot language with the goal of altering Measure ULA, allowing for newly constructed multi-family and mixed-residential buildings to be exempt from the city’s so-called “mansion tax” for a 10-year period.
The proposal would also expand uses of ULA funding to support interim housing sites and outreach services. Council members Eunisses Hernandez, Ysabel Jurado, Imelda Padilla, Monica Rodriguez and Hugo-Soto Martinez voted against the matter.
Councilman Curren Price recused himself from the vote as he is a landlord.
In a separate, unanimous vote, the council directed city attorneys to draft ballot language for a one-time, five-year exemption from Measure ULA for owners of residential properties who were impacted by the January 2025 Palisades Fire.
Major changes to Measure ULA would require voter approval before they can be effectuated by the city.
The direction comes after an ad hoc committee on Measure ULA spent three months leading discussions to change the 2022 voter-approved property transfer tax. The committee declined to support ballot measures to alter Measure ULA, saying it was too early to see the impacts of the tax on housing production.
“We reviewed the data, we followed the evidence, and after all of that conclusion, the evidence to me did not support putting Measure ULA back on the ballot at this time,” said Jurado, who led the ad hoc committee.
“Not now, and not after only a few years before we fully evaluated the long-term effects, and certainly not while Angelenos are relying on the resources to stay housed,” she added.
Council members Tim McOsker and Katy Yaroslavsky introduced the proposal for the 10-year exemption. McOsker described the proposal as reaching a “middle-ground” between those who support eliminating the tax altogether and those who want to leave Measure ULA as it is.
“What’s being proposed is something that has the effect of making changes to ULA to put us in a position where one of the many impediments to building is reduced,” McOsker said. “The wall just becomes a little bit lower for getting access to capital and building the facilities that need to be built, but also out of respect for the people.”
Yaroslavsky said it was important to advance the proposal, giving the council an opportunity to act.
“We know there’s a lot of stuff happening in Sacramento still that makes it hard for us to know with complete information where this is going to land,” Yaroslavsky said.
The council had a deadline of Wednesday to keep a November ballot option alive, Yaroslavsky explained. If members didn’t approve something, it would have locked out the city’s chance to put local reform before voters this year.
A study from the L.A. Housing Department found that a 10-year exemption would result in a less than 2% reduction in Measure ULA revenue.
Yaroslavsky noted there are conversations happening in Sacramento between legislators and proponents of a statewide ballot measure threatening special taxes such as Measure ULA.
Councilwoman Traci Park thanked colleagues for supporting the one-time, five-year exemption for Pacific Palisades. Park has opposed and criticized Measure ULA for what she says have been “drastic impacts on our housing production, development and rent affordability.”
“ULA has been an impediment to the Palisades recovery, leaving properties sitting empty and people mired in tax and regulatory hell at the very moment we need flexibility to recover in the Palisades,” Park said.
“ULA presents another obstacle for some disaster victims because of lack of adequate insurance resources, timelines, bureaucracy, familial status, age and a lot of other reasons,” she added.
While supporting Parks’ proposal, Hernandez asked for city attorneys to return with draft language that ensure the exemption helps those it is intended for and not corporate landlords.
Council members undertook efforts to amend Measure ULA after concerns the tax was harming the construction of housing.
The ad hoc committee declined to reduce the transfer tax rate from 5% to 5.5%, to 2% to 3.5% on the sale of properties above $5 million — a proposal sponsored by Council President Marqueece Harris-Dawson and Councilman John Lee. The proposed cap rates were suggested for single-family homes, not-for-profit medical, educational and/or arts facilities.
Approved by voters in 2022, Measure ULA established a transfer tax on property valued above the annually adjusted figure of $5 million, and a larger tax on those valued above $10 million. The tax encompasses the transfer/sales of mansions, apartments, commercial buildings and multi-family housing, among other categories of buildings.
The measure took effect April 1, 2023, and through April 30, 2026, it has raised nearly $1.2 billion from 1,633 real estate transactions, according to Housing Department officials.
Meanwhile, the Howard Jarvis Taxpayer’s Association has qualified a statewide ballot initiative called the Local Taxpayer Protection Act, which aims to eliminate special taxes, and raise the threshold for voters to approve new sources of tax funding.
The association also sponsored Proposition 13, a 1978 law capping property taxes at 1% of assessed value and limited annual increases to 2%. It also established a two-thirds majority mandate for any state tax increases.
Jon Capul, president of the association, told City News Service in a telephone interview that the new proposed measure aims to enforce the language set forth in Proposition 13.
“There is a provision of Proposition 13 that makes it clear that special taxes require a two-thirds vote of the local electorate, and that same section also make it clear that real estate transfer taxes or other taxes on the sale of property are prohibited,” Capul told CNS. “Period. Full stop.”
The association has long been a critic of Measure ULA and other special taxes like it across the state.
“We have always viewed real estate transfer taxes as nothing more than equity theft. People save money building up equity in their home over time, and then the government comes in and skims money off the top when you sell, so both are very important to us,” Capul told CNS. “These are core Proposition 13 issues, and we intend to fully restore the plain language of Proposition 13.”
He believes the association is building a widespread coalition that will back the statewide ballot measure.
“We think we are well positioned to make this initiative about Proposition 13 and saving people’s homes,” Capul told CNS. “Our core message is going to be: It makes it harder for local governments to raise your taxes. It’s a very simple message.”
He supported Los Angeles’ efforts to lessen the quantifiable negative impacts of ULA and reverse the damage. But he said they should pursue that goal without any reference to the initiative.
In reference to potential talks between the association and state leaders, Capul said he doesn’t see any scenario under which the association would withdraw the initiative.
“They would have to offer things that we know they would never accept, so the whole negotiation thing is in large part a moot point now,” Capul told CNS.