Three years ago, Los Angeles voters approved a \u201cmansion tax\u201d that funds the construction of affordable housing. Supporters of the tax pitched it as a way to tackle the city\u2019s affordability problems while simultaneously creating well-paying construction jobs.<\/p>\n
So, how many jobs have been created so far? One eye-popping estimate cited by the tax\u2019s oversight body has come under heavy criticism from local economists.<\/p>\n
The estimate was included in an April news release<\/a> from the committee, but it wasn\u2019t immediately clear that the number was controversial. The celebratory post said the tax \u2014 officially known as Measure ULA \u2014 had \u201cbuilt 800 new affordable homes\u201d and \u201ccreated 10,000 union construction jobs\u201d in its first two years.<\/p>\n \u201cIt was highly implausible,\u201d said Michael Manville, a professor of urban planning at UCLA. \u201cAt the time they were making that claim, very little construction was actually happening as a result of Measure ULA. The money just wasn’t flowing yet.\u201d<\/p>\n Mansion tax advocates later dialed back their messaging. The tax hadn\u2019t yet created 800 apartments or 10,000 jobs, they said, but it had \u201caccelerated\u201d their creation.<\/p>\n By then, the numbers had taken on a life of their own, spreading beyond advocacy circles into official government communications. The accuracy of these numbers matter, critics say, because they raise questions about oversight at a time when efforts to reform or even repeal the measure are ongoing.<\/p>\n Mansion tax critics raise oversight questions<\/p>\n In addition to being cited by ULA Citizen Oversight Committee<\/a>, the government body tasked with auditing the tax\u2019s revenues and expenditures, the number was later cited<\/a> by a team of academic researchers who defended the tax against critiques by other economists.<\/p>\n Through a public records request, LAist tracked down the origin of the 10,000 jobs claim. We found that it started as a caveat-laden internal city analysis before it turned into a concrete figure circulated widely by researchers and watchdogs.<\/p>\n Manville, who co-authored a recent study<\/a> that concluded the tax had sharply reduced sales of high-end real estate, said the dissemination of this jobs number raises questions about how carefully Measure ULA is being overseen.<\/p>\n \u201cWhat it suggests to you is the possibility that the people at work sort of promoting and, in theory, even regulating this measure aren’t that interested in the details, aren’t that interested in the rigor and are more interested in just promoting a particular storyline,\u201d Manville said.<\/p>\n Sharon Sandow, a spokesperson for the L.A. Housing Department, said the department \u201cstands by the estimate of 10,000 potential construction jobs and career opportunities.\u201d<\/p>\n She continued: \u201cIt is an estimate, and not a guarantee of jobs that currently exist.\u201d<\/p>\n Backstory of the mansion tax\u00a0<\/p>\n Measure ULA took effect in April 2023 after voters approved it<\/a> the previous November. Though it\u2019s been dubbed the \u201cmansion tax,\u201d it applies to all kinds of real estate<\/a>, including new apartment buildings.<\/p>\n The tax was set at 4% for property sales above $5 million, and 5.5% for sales above $10 million.<\/p>\n The city uses Measure ULA to fund a variety of housing affordability programs. The tax delivers rent relief<\/a> to struggling tenants, pays for eviction defense<\/a> for those at risk of homelessness, and funds the city\u2019s largest-ever<\/a> pot of money for low-income housing development.<\/p>\n But economists say those benefits come at a steep cost: the loss of much-needed new housing. Developers looking to build in Southern California can dodge the tax by simply taking their projects outside city limits, where it doesn\u2019t apply.<\/p>\n Los Angeles is far behind<\/a> on producing enough new housing to meet state goals and reverse its affordability issues, experts say. Many factors contribute to the city\u2019s construction shortage, but some researchers point to the mansion tax as a key driver of depressed development.<\/p>\n One study from researchers at RAND and UCLA concluded<\/a> that the city would have more affordable housing units on balance if the tax did not apply to new apartment buildings.<\/p>\n Tax backers stand by jobs estimate\u00a0<\/p>\n City officials and some researchers defended their use of the 10,000 jobs figure, saying it is an early estimate informed by previous city-funded housing efforts.<\/p>\n Greg Bonett, an attorney with Public Counsel and a co-author of the study that cited the jobs figure, said the researchers plan to add more context to a footnote in their paper.<\/p>\n \u201cWe intend to add a little bit more information there about how that figure was based on the city’s analysis of certified payroll data,\u201d Bonett said. \u201cIt was important to name that the employment benefits are a meaningful benefit from the measure, in addition to the many other benefits.\u201d<\/p>\n LAist filed a California Public Records Act request for internal city communications regarding the jobs estimate. The request unearthed an email from the city employee behind that payroll data analysis. He said the 10,000 jobs estimate for Measure ULA \u201cmisrepresented\u201d his conclusions.<\/p>\n Zerita Jones, chair of the Measure ULA Citizen Oversight Committee, told LAist in a brief phone call that she didn\u2019t know how the number ended up on the committee\u2019s website.<\/p>\n \u201cI\u2019m not involved in screening what goes on the website,\u201d Jones said.<\/p>\n She said once ULA-funded construction projects are completed, she will ask for reports about how many jobs were ultimately created.<\/p>\n \u201cBecause the people need to know,\u201d Jones said.<\/p>\n Backstory of the jobs estimate<\/p>\n The jobs estimate dates back to March 4, 2024, when Housing Department staffer Greg Good emailed a colleague in the city\u2019s Bureau of Contract Administration.<\/p>\n Good wanted a job-creation estimate for Measure ULA to relay to the union workforce represented by the influential LA\/OC Building and Construction Trades Council.<\/p>\n \u201cThis is important to everyone involved \u2014 including the Trades \u2014 and we’re struggling with it,\u201d Good wrote in the email.<\/p>\n In response, Good received a detailed analysis of a previous city fund \u2014 Measure HHH \u2014 approved by voters in 2016 to build homeless housing. The person who produced the analysis, Ian Monteilh with the city\u2019s Bureau of Contract Administration, had said for every $1 million spent on total development costs in HHH projects, 34 construction jobs were created.<\/p>\n But Monteilh added a big disclaimer, warning against using his analysis to say exactly how many jobs Measure ULA would produce.<\/p>\n \u201cDo not use language that states a specific number of jobs will be created,\u201d Monteilh wrote in the email.<\/p>\n In another email he noted that such projects \u201cdon’t necessarily create UNION jobs.\u201d<\/p>\n But when the tax\u2019s two-year anniversary rolled around, those caveats were gone. The Citizen Oversight Committee had used Monteilh\u2019s central statistic \u2014 34 jobs created for every $1 million spent on development \u2014 as the basis for their conclusion that the \u201cmansion tax\u201d had created 10,000 union construction jobs.<\/p>\n \u2018It just doesn\u2019t pass the smell test\u2019<\/p>\n Tax supporters told LAist they wanted to be conservative, so they rounded down Monteilh\u2019s number to 22 jobs per $1 million. Applying that figure to the $547 million in total development costs for projects partially subsidized by Measure ULA, they arrived at a grand total of 12,034 jobs.<\/p>\n Advocates say they again rounded that down to an even 10,000 jobs.<\/p>\n When that number came out in an April news release on the Citizen Oversight Committee\u2019s website titled \u201cMeasure ULA Celebrates Two Years!\u201d, it seemed far too high to Manville, the UCLA professor. He later emailed researchers and city officials to try and track down where it came from.<\/p>\n Emails obtained by LAist show Manville asking Monteilh about the figure. Monteilh wrote back, saying, \u201cSounds like someone misrepresented the jobs formula.\u201d<\/p>\n LAist reached out to Monteilh, but he said we needed to contact his bureau\u2019s spokesperson. That spokesperson deferred questions to the city\u2019s Housing Department.<\/p>\n The number also sounded too high to Jan Brueckner, a UC Irvine economics professor emeritus who has not been involved in studies on either side of the mansion tax debate.<\/p>\n \u201cIt just doesn’t pass the smell test,\u201d Brueckner told LAist. \u201cIt just seems way too big, and I don’t think the logic is reasonable.\u201d<\/p>\n The measure\u2019s first batch of affordable housing funds totaled $55.6 million. If all of that money went to labor \u2014 excluding land, building materials or other development costs \u2014 each of those 10,000 workers would have received $5,560. Is that enough to create a union job?<\/p>\n Manville said the estimate was fundamentally flawed because it counted jobs without counting the hours associated with each job. Perhaps 34 workers stepped onto a job site for every $1 million spent on development. But some may have only been employed for a week.<\/p>\n \u201cMost people, when they think about a job being created, they think about a full-time job,\u201d Manville said. But under Measure ULA supporters\u2019 analysis, he said, those jobs are \u201cnot going to be full-time work of the sort we think about.\u201d<\/p>\n The Citizen Oversight Committee\u2019s website is managed by Measure ULA\u2019s interim inspector general, a public policy firm called Estolano Advisors. The firm\u2019s principal, Richard France, told LAist in September the web post had been updated to clarify that the jobs estimate came from supporters of the measure.<\/p>\n The post was altered to say the tax is \u201ccreating\u201d those jobs, rather than it has \u201ccreated\u201d the jobs.<\/p>\n When LAist asked how that number ended up on the oversight body\u2019s website in the first place, France stopped responding. We\u2019ve reached out to Estolano Advisors multiple times to seek clarification, but have not received a response.<\/p>\n Estolano Advisors is being paid nearly $755,000 for its services, according to its contract<\/a> with the city.<\/p>\n Oversight committee \u2018not there to be cheerleaders\u2019<\/p>\n Sara Sadhwani, a politics professor at Pomona College, said the Citizen Oversight Committee should seriously consider all competing data on the tax.<\/p>\n \u201cOversight committees are not there to be cheerleaders of any particular policy \u2014 that would defeat the purpose,\u201d Sadwhani said.<\/p>\n Instead, she said, they should \u201creally assess the performance of any given policy and give the people of Los Angeles a real sense of whether or not the system is working.\u201d<\/p>\n Stan Oklobdzija, an assistant professor at the UC Riverside School of Public Policy, said when assessing the performance of a policy like Measure ULA, it\u2019s important for advocacy not to bleed into oversight.<\/p>\n \u201cI think it’s really important for the citizens of Los Angeles to have a good idea of exactly what this tax is doing,\u201d Oklobdzija said. \u201cIt’s important to be really, really accurate with your assessments of both its costs and its benefits.\u201d<\/p>\n Efforts to reform the mansion tax have been proposed<\/a>, only to fizzle at the end of Sacramento\u2019s most recent legislative session.<\/p>\n