Measure ULA Linked to Decline in New Apartment Development

A recent study conducted by UCLA and the Rand Corporation revealed a link between Measure ULA – the controversial real estate transfer tax applied to high value property sales – and multi-family residential construction.

The study theorizes that 1,910 fewer units per year have been constructed since Measure ULA in April 2023.

Measure ULA adds a 4% charge is added to LA property sales over $5M and a 5.5% charge to sales above $10M.

The additional tax was promoted as a means to target high-end home sales, which are largely purchased by members of the multi-million and billionaire class. The study, however, indicates the tax burden has spilled over into the multi-family market.  

Joe Donlin, United to House LA coalition director, the group responsible for Measure ULA, disputes the reports assumptions. But if the suppositions are correct, the measure is stifling the primary vehicle for affordable housing development.

The study’s authors recommend amending the measure to exempt the tax on apartment buildings sold within 15 years of construction.

Given that only 8% of the revenue generated by Measure ULA was generated by these types of sales, this would have little impact on the income generated by the measure.