Los Angeles transfer tax Measure ULA has blocked thousands of home constructions, eliminated thousands of jobs, and fallen short of projected revenue targets since taking effect in April 2023.
Official transfer tax policies in Los Angeles continue to face heavy scrutiny following data regarding housing construction and local economic impact. Measure ULA levies an additional tax on high-value real estate transactions within the city. Properties selling for more than $5.4 million face a 4% tax at closing, while transactions exceeding $10.9 million are taxed at 5.5%, stacking on top of base municipal transfer fees.
Despite its populist moniker, the policy sweeps far beyond luxury estates. Commercial buildings, apartment complexes, industrial properties, and vacant land all trigger the levy if their sale prices exceed the statutory thresholds.
Construction Halts and Employment Losses Across Los Angeles
New economic findings reveal that the local transfer tax blocked the building of 9,100 homes throughout the metropolitan area, exacerbating an existing housing shortage. Approximately 1,000 of those halted properties would have supplied affordable housing units.
The slowdown wiped out 16,650 full-time construction jobs across residential and commercial sectors. Industry participants report that builders contending with high material and labor expenses face further margin compression when attempting to sell completed or revitalized properties.
“Builders are already dealing with high costs of labor and materials, so this added expense when they go to sell a completed or revitalized project squeezes their margins further. This will lead some to decide that the deals simply are not worthwhile.”
Joel Berner, senior economist at Realtor.com, via Nypost
Westside real estate broker Danny Brown offered a blunt assessment of the local market conditions to The California Post, stating that the policy has severely damaged the regional commercial and residential real estate pipeline.
Measure ULA Collects Less Revenue than Projected
Proponents originally projected that Measure ULA would generate roughly $900 million annually, totaling $2.7 billion over its first three years. Actual collections reached about $1.2 billion, falling short of initial fiscal estimates.
Government agencies absorbed $452 million in lost revenue due to dampened transaction volume. Meanwhile, city officials have distributed a fraction of the collected funds. By May, the city had spent approximately $114 million—less than 10% of total collections. A notable portion of that money, $55.5 million, went toward supporting 3,713 existing affordable housing units rather than constructing new ones.
The Los Angeles City Council voted 13-0 to direct $466.6 million toward affordable housing. Out of that total, $324 million originates directly from Measure ULA funds. Councilwoman Nithya Raman, an initial champion of the initiative who previously praised its broad scope, has since acknowledged support for policy reforms.
Lawmakers Examine Targeted Fixes for Transfer Taxes
Efforts to alter the transfer tax shifted after the June 2026 withdrawal of a statewide ballot measure that could have repealed or curtailed the tax. With broad statewide repeal efforts shelved, attention turned toward localized legislative adjustments.
Lawmakers and industry stakeholders are currently examining targeted fixes, including a statewide cap on transfer taxes and a municipal tax-credit program designed to lower ULA rates for qualifying mixed-use and multifamily developments. While Measure ULA remains fully operational, policymakers continue discussions regarding adjustments to mitigate transaction friction.