Staff Reports
Los Angeles voters approved Measure ULA to squeeze money out of the high end of the housing market and funnel it into affordable housing. A new RAND Corporation report shows what happens when you try to tax development into submission: deals dry up, housing projects stall and the city gets less money than promised. Predictable? Yes. Fixable? Maybe. But only if City Hall stops pretending that punishment equals progress.
RAND report: the mansion tax froze high‑value and apartment deals
The RAND analysis used solid econometric tools to isolate the effect of Measure ULA, the so‑called mansion tax. RAND found high‑value home sales in Los Angeles fell roughly 31% after the tax took effect, with even bigger drops — mid‑40% declines — for multifamily and commercial deals that actually create housing. In plain English: when you slap a big transfer tax on expensive properties, investors and builders put projects on ice. That’s not theory. RAND measured it.
The math: thousands of homes, jobs and revenue at risk
The report’s modeling and follow‑on estimates have produced stark numbers that everyone now cites: on the order of 9,100 housing units that were deterred or “blocked,” roughly 16,650 full‑time construction jobs not created, and hundreds of millions in property and school tax revenue that never materialized — commonly reported as about $452 million in foregone revenue in the period RAND examined. Supporters once sold ULA as a revenue generator of roughly $700–900 million a year; the city has collected far less than that per expectations, and cumulative receipts through the study window were roughly $1.1–$1.2 billion, not the windfall many voters were promised.
Political fallout at City Hall
Council motions, coalition defenses and half‑measures
The RAND report didn’t just land on a shelf — it pushed City Council members to propose reforms. Some councilmembers urged exemptions for newly built multifamily projects or narrow tax‑credit pilots to revive construction. United to House LA, the coalition behind Measure ULA, defended the policy and pointed to existing projects funded by the tax. So the debate is now predictably split: activists insist on protecting voter‑approved funding while developers and some councilmembers want practical fixes so Los Angeles can actually get more housing and revenue.
Bottom line: policy should help build homes, not scare them away
Measure ULA had a goal plenty of people can get behind: more affordable housing and less homelessness. But policy outcomes matter more than slogans. The RAND report shows a blunt tax with a hard threshold chilled the very investment Los Angeles needs. If city leaders want to keep the revenue stream and build homes, they should stop doubling down on performative taxes and start adopting targeted reforms RAND recommends — like multi‑year exemptions for new multifamily buildings or smarter credit pilots. Otherwise, expect more empty promises, fewer houses and a lot more political finger‑pointing.
