Passed in 2022 by nearly 58% of Angeleno voters, Measure ULA initially imposes an additional 4% tax on the sales of any homes or commercial properties, not just mansions, valued at more than $5.3 million. The rate on sales of properties sold at more than $10.6 million rises to 5.5%.
The dollars coming in are dedicated to funding affordable housing projects and providing “resources to tenants at risk of homelessness.”
“I don’t think it’s overstating it at all to call it a game changer,” said Ann Sewill, who was then chief of the city’s Housing Department but has since moved on.
The tax went into effect on April 1, 2023. Revenues were going to pour in like the rain in a Southern California winter storm. The low-end estimate was $600 million a year while there was some thought that it could possibly reach $1.1 billion a year.
It was a fantasy. By September of the following year, 2024, it had generated a paltry $375 million.
An academic paper published last June by University of California, San Diego, University of California, Irvine, and Harvard researchers estimated “that Measure ULA reduced the transaction rate of eligible properties by 38 percent and that at least 63 percent, and potentially over 100 percent of the revenue raised by Measure ULA is offset by lower future property-tax collections.”
In other words, the city is losing overall revenue because of the mansion tax.
The tax also had a deadening effect on real property sales, as they fell hard after it went into effect.
There was, however, a burst of sales activity before April 1, 2023. In March of the year, 126 homes sold for more than $5 million, says policy analyst Randal O’Toole. That was followed by a month in which only two were sold.
Seems that property owners did a little grade-school math and quickly figured it was better to sell before the tax kicked in than after.
In early 2026, the story remains much the same. Since 2023, sales of real property that would fall under Measure ULA have produced less than the $1.1 billion that the myopic optimists insisted it would rake in in a year. Sales of properties valued between $5.3 million and $10.6 million have brought in only $285.7 million in revenue in that three year period. Sales of those with values exceeding $10.6 million generated $803.8 million in revenues. That’s a total of $1.09 billion.
In the era of the mansion tax, which has survived a legal challenge, there have been fewer than 1,500 transactions subjected to its guidelines. That works out to an average of about 44 a month.
The rational response to such a failure would be to abandon the scheme. But doesn’t seem to be in the plans. Democratic Socialist City Councilwoman Nithya Raman, who is running for mayor, wants the city attorney to “prepare and present ballot measure language” to change the structure of the tax. Among the modifications is a 15-year exemption for multifamily, commercial and mixed-use properties, which are the darlings of politicians who’d rather organize communities through manipulative public policy and neighborhood vandals known as urban planners that let them develop organically.
Raman wants any ballot measure to appear in June. But even if it passes — it’s possible that voters won’t see it anyway — it could be undercut by a competing measure. The Howard Jarvis Taxpayers Association is collecting signatures for a constitutional amendment that would repeal and ban “all real estate transfer taxes higher than 0.11%” across the state. Should it qualify, it will appear on the November ballot.
There is some concern that the mansion tax might be a tipping point that sets off an anti-tax movement in California. That upsets the politicians and unelected administrators who feast on taxpayers’ dollars. But it would be welcome for the millions of Californians overburdened by a tax regime that is among the worst of the worst in the country.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.