Measure ULA is reducing apartment development in the city of L.A, report says

A recent study from UCLA and Rand indicates that Los Angeles' mansion tax, Measure ULA, may be decreasing apartment construction in the city. The tax applies a 4% levy on property sales over $5 million and 5.5% on sales exceeding $10 million. Critics argue this has hindered profitability for new developments, resulting in an estimated reduction of at least 1,910 housing units annually, including 168 affordable units. The study highlights the potential worsening of the housing crisis as national permit approvals also decline due to rising costs.

The real estate industry argues that the mansion tax has made it difficult to profit from new housing developments, leading to a significant drop in apartment construction.

If we are building less housing, then the city is going to become even more unaffordable, according to Shane Phillips, co-author of the UCLA housing study.

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