Last week, Mayor Karen Bass requested that the Los Angeles City Council\u00a0grant a one-time exemption from Measure ULA for Palisades Fire victims. Through this announcement, Mayor Karen Bass effectively recognized what the data already shows: Measure ULA, the so-called \u201cmansion tax,\u201d is negatively impacting housing across Los Angeles.<\/p>\n
Her honor\u2019s office announced she will \u201cassist in the establishment of a one-time exemption to Measure ULA\u201d and, once approved, issue an executive directive to carry it out. That urgent request to the City Council is not just a minor change. It\u2019s an admission that ULA is blocking vital transactions when people most need relief.<\/p>\n
If Measure ULA were narrowly targeted and harmless, we wouldn\u2019t see the measurable damage UCLA has documented. UCLA Lewis Center researchers found that since ULA took effect, \u201cthe odds of a Los Angeles property selling at a price above its tax threshold have fallen by as much as 50%,\u201d with the steepest declines in non-single-family transactions (commercial, industrial, and multifamily) down 30% to 50%. Those are precisely the assets that fuel renovations, conversions, and new housing projects. When turnover stalls, projects stall.<\/p>\n
A second UCLA study,\u00a0Taxing Tomorrow,\u00a0goes further. It links ULA to at least a 1,910-unit annual reduction in multifamily production, an 18% drop compared to recent pre-ULA levels. In a city starved for homes, that\u2019s a self-inflicted wound resulting in fewer projects getting financed, fewer affordable set-asides, and slower progress overall.<\/p>\n
Community Tax Coalition research reaches the same conclusion nationally: real estate transfer taxes suppress transactions, decrease supply, and do not generate the promised revenues, with the most hardship felt by lower-income households. That\u2019s not a mansion tax, as Measure ULA supporters claimed. Los Angeles now serves as a case study of those unintended consequences.<\/p>\n
Even ULA\u2019s revenue has fallen short of expectations. UCLA noted that ULA has raised less than its backers projected. Measure ULA is producing only about $270 million to $830 million less per year\u00a0than promised, depending on which projection is used. Budgets can adjust to shortfalls. Lost housing cannot be reclaimed.<\/p>\n
Yet, politicians bemoan the city\u2019s housing crisis but still find ways to increase the cost of building housing.<\/p>\n
The Mayor herself acknowledged ULA\u2019s structural flaws earlier this fall. Working with Sacramento allies, she supported a last-minute bill to lessen ULA\u2019s impact on certain newer apartments, shopping centers, and warehouses, implicitly admitting that the tax is hindering deals the city needs to facilitate. Then, under pressure, the bill was withdrawn before the legislative deadline.<\/p>\n
If Measure ULA\u2019s design is sound, then state-house surgery shouldn\u2019t be needed. If it\u2019s flawed, postponing reform only delays the inevitable.\u00a0Many of these same groups also push for exemptions to the California Environmental Quality Act to benefit a \u201cchosen group.\u201d They don\u2019t recognize or refuse to acknowledge\u00a0that this law raises building costs and causes costly delays.<\/p>\n
Which brings us back to the Mayor\u2019s proposed \u201ctemporary\u201d exemption. It\u2019s humane to help fire survivors. It\u2019s politically crucial for a mayor on the ballot next June. It\u2019s also revealing. Once politicians admit that ULA blocks essential transactions in an emergency, they have acknowledged the core policy failure: a blunt transfer tax discourages the very market activity \u2013 sales, recapitalizations, and conversions \u2013 that makes new and more affordable housing possible.<\/p>\n
The Mayor\u2019s own letter states the exemption is meant to \u201cspeed up sales of these properties and spur rebuilding,\u201d clearly\u00a0admitting\u00a0that the tax hinders recovery and housing.<\/p>\n
Leadership requires following the evidence to its logical conclusion. Carve-outs, pauses, and withdrawn fixes are political waystations, not solutions. If Los Angeles\u2019 political leaders want more housing, especially affordable housing, they must eliminate the obstacles blocking transactions and construction. That begins by admitting ULA has failed and initiating a full repeal.<\/p>\n
Temporary solutions are not a housing strategy. Repeal is.<\/p>\n
Matthew Klink is the owner and president of Klink Campaigns, Inc. He is a founding member of the Community Tax Coalition.<\/p>\n","protected":false},"excerpt":{"rendered":"Last week, Mayor Karen Bass requested that the Los Angeles City Council\u00a0grant a one-time exemption from Measure ULA…\n","protected":false},"author":3,"featured_media":295364,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5123],"tags":[1582,276,11890,2961,224,5337,1269],"class_list":{"0":"post-295363","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-los-angeles","8":"tag-ca","9":"tag-california","10":"tag-commentary","11":"tag-la","12":"tag-los-angeles","13":"tag-losangeles","14":"tag-opinion"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/295363","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=295363"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/295363\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/295364"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=295363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=295363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=295363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}