A study by the RAND Corporation reveals that Measure ULA has caused the loss of 16,500 construction jobs and $452 million in tax revenue.
Pitched to voters as a tax on the wealthy to fund much-needed affordable housing, Los Angeles' controversial "mansion tax" has instead cost the city over 9,000 new housing units, 16,500 construction jobs, and $452 million in lost municipal revenue.
That is the sobering conclusion reached by researchers at the nonpartisan global policy think tank RAND Corporation in a recent report assessing the impact of the real estate transfer tax, officially known as Measure ULA.
Enacted in April 2023, the measure imposes a 4% tax on property sales of $5.4 million to $10.9 million, and a 5.5% tax on sales exceeding $10.9 million. These rates apply on top of Los Angeles' standard 0.45% base real estate transfer tax.
Contrary to its moniker, the tax pertains not just to expensive mansions but to all real estate priced at over $5.4 million, including apartment complexes, office towers, retail spaces, mixed-use buildings, warehouses, and vacant land.
The 89-page RAND study, titled "The Effects of the Measure ULA (United to House LA) Transfer Tax on Economic Development and Municipal Finances in Los Angeles," shows that ULA raised approximately $1.2 billion by early 2026 toward affordable housing development and homelessness prevention programs, which is less than half of the $2.7 billion initially projected by the measure's champions.
By Oct. 6, the revenue generated by the tax has reached $1.42 million, according to Los Angeles Housing Department's online tracker.
(Realtor.com) "The tax has taken in considerably less than proponents of the initiative originally projected," write the RAND report's authors. "The tax has also dampened commercial development including market rate housing production, which provides hundreds of millions of dollars a year in fees to fund city services and local schools."
Lost housing, revenue, and jobs
As part of the study, researchers analyzed real estate sales transactions, parcel characteristics, building permits, certificates of occupancy, and other relevant data points from 2020 through the first quarter of 2026.
Based on this sweeping evaluation, the authors of the report found that since Measure ULA went into effect, production of large multifamily apartment buildings dropped by an average 30%, equating over 9,100 units. They pointed out that the decline would have been even worse without the city's Executive Directive 1, which streamlined approval for nearly 47,000 units of 100% affordable housing.
The sharp drop-off in housing production resulting from the transfer tax cost the city 16,650 full-time construction jobs.
Additionally, declines in real estate activity tied to the tax caused $452 million in forgone revenue to local, county, and state agencies over the past three years, including $80 million intended to the Los Angeles Unified School District.
According to the study, overall high-value real estate transactions plunged 31% since ULA went into effect.
If left in its current form over the next 10 years, RAND estimates that ULA will cost the city $1.68 billion in lost revenue, 31,000 new housing units, and 54,000 construction jobs.
Supporters of Measure ULA, led by by United to House LA—the group that spearheaded the initial ballot initiative in Nov. 2022—vehemently oppose amending the tax, arguing that it would delay and reduce funding of affordable housing.
However, researchers suggest that if City Council overhauls ULA to exempt newer commercial properties and apartments from the tax for 15 years, and tax older developments at a lower rate, that would boost revenue by $823 million, produce nearly 19,000 new housing units—2,000 of them affordable—and generate more than 33,000 construction jobs in the coming decade.
Calls for transfer tax reform
The fight over the "mansion tax" has spilled into local politics.
City Councilmember Nithya Raman, a Democratic Socialist currently running to unseat first-term incumbent Mayor Karen Bass in next month's election, was an enthusiastic early supporter of the transfer tax, heralding it as a groundbreaking initiative.
Councilmember Nithya Raman, a mayoral candidate, has proposed to reform Measure ULA to boost homebuilding. (Los Angeles Times via Getty Images)) However, earlier this year, Raman introduced a proposal to amend the measure in a bid to address its "unintended consequences."
"The structure of ULA now disincentivizes investment in exactly the kind of buildings that we are saying are going to help us meet our housing shortage," said Raman in January. "We are sabotaging ourselves, a policy that unintentionally stalls housing production undermines the very goal that voters asked us to achieve."
The lynchpin of Raman's proposal was a 15-year exemption from the tax for newly constructed multifamily, commercial, and mixed-use buildings.
However, the City Council declined to place Raman's measure before voters in June, instead sending it to committee for further study.
Housing and politics
Raman, who is leading Bass in a new poll, on Sunday pledged to speed up the permitting process by introducing a "shot clock" to crack down on delays during her first 100 days in office, if she is elected in November.
"My top priority in office will be to eliminate the red tape and bureaucratic hurdles that stop us from building homes," she said at a campaign event, as Los Angeles Daily News reported.
It comes after L.A. received an F grade in the 2026 Realtor.com® Metro Report Cards, having earned the lowest overall score measuring affordability and homebuilding among the 100 largest U.S. cities.
L.A. Mayor Karen Bass, who is running for reelection, has defending her record on housing. (Los Angeles Times via Getty Images) In a statement to Realtor.com® last month, Bass' office defended the mayor's record on housing, pointing to Executive Directive 1 and other measures that were put into effect on her watch, including a large-scale local zoning program.
However, Raman argued that Bass has not done enough to address Los Angeles' decades-long housing crisis.
"We’ve made it too difficult, time consuming, and costly to build homes in Los Angeles," Raman told Realtor.com.