10/13/2026
LA’s controversial “mansion tax” may be doing more harm to our housing supply than good.
And here’s what many people don’t realize: Measure ULA doesn’t just tax luxury mansions. It also applies to commercial properties, including office buildings, retail spaces, warehouses, industrial sites, and apartment complexes.
Under the current tax structure, property sales within the City of Los Angeles are subject to an additional:
• 4% transfer tax on sales over $5.4 million and under $10.9 million.
• 5.5% transfer tax on sales of $10.9 million or more.
That means selling a $10 million commercial building triggers an additional $400,000 in transfer taxes, before accounting for existing transfer taxes, commissions, and other closing costs.
A new UCLA Anderson study examining the unintended consequences of Measure ULA has revealed some startling findings:
• 70% decline in alternative dwelling unit (ADU) development
• 40% decline in overall housing construction permits
• 45% decline in single family home permits
• 27% decline in multifamily construction permits
• 46% increase in luxury home renovation permits, suggesting owners are choosing to improve their properties rather than sell
And perhaps most surprisingly, the tax has generated approximately $378 million annually, well below its original projected revenue of $600 million to $1.1 billion per year.
The irony is that Measure ULA was introduced to help address the Los Angeles housing affordability crisis, yet this research raises serious questions about the broader economic impact on our city.
So how do we strike the right balance between funding affordable housing and encouraging the development, investment, and economic growth our city needs?
