Los Angeles might tweak its ‘mansion tax.’ Here’s why that matters for the rest of California

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To save the City of Los Angeles’ controversial “mansion tax” — and fend off the threat of fiscal calamity across the state — Angelenos need to re-write the law.

That’s according to City Councilmember Nithya Raman who introduced a motion on Friday to put a mansion tax do-over on the June 2026 ballot. The council is scheduled to vote on the measure Tuesday.

The tax, known as Measure ULA, has stuck high-value real estate sales with supersized transfer taxes — 4% on sales of between $5 million and $10 million and 5.5% for anything higher — since it was passed by nearly 60% of local voters in 2022. All that revenue, $1 billion and counting, is reserved for affordable housing development and upkeep and low-income tenant assistance.

The measure has fierce defenders, among them tenant rights groups and public sector unions. 

Apartment developers hate it just as ferociously. Despite its moniker as a “mansion tax,” the policy draws no distinction between single family compounds in Bel Air and large new apartment buildings constructed for renters.

In the years immediately following the enactment of ULA, multifamily property sales did see a steep drop compared to those in other cities around the county. 

More recently, the fate of the Los Angeles mansion tax has become a statewide concern. The Howard Jarvis Taxpayers Association, a group that advocates for lower taxes in California, is gathering signatures to put a measure on California’s November 2026 ballot that would, in part, sharply curtail the ability of more than two dozen cities to charge heightened transfer taxes like the one in Los Angeles. 

If it passes, it would deal a multibillion dollar blow to municipal budgets in some of California’s largest cities. But even if qualifies for the ballot and ultimately fails, opponents of the measure such as public sector unions and other allies of California Democrats would likely feel compelled to spend millions on electoral offense. A growing number of Democratic lawmakers in the state capitol are eager to avoid either outcome. They hope that tinkering with Measure ULA will defang the anti-tax crusade statewide.

Hence Friday’s proposal by Raman. 

The motion calls for a local ballot measure that would make a series of tweaks to the original tax. The most significant would exempt apartments, condos, commercial and mixed-used projects from ULA’s transfer tax for the first 15 years — removing what has come to be seen by many developers as an impediment on construction. 

The motion would also change some of the rules about how money gathered by the measure can be spent.

At a council meeting on Friday, Raman described the proposed measure as an effort to “protect” the heart of the mansion tax.

“Multifamily and mixed-use housing production has slowed in the City of L.A., lenders are pulling back from the market entirely and there’s multiple efforts to un-do ULA entirely — to take it away from us completely,” she said, directing her message to the crowd of protesters who showed up to rally against any proposed changes to the tax. “There may be different ways of thinking about how we protect this going forward, but I stand here with you in deep agreement with the comments that you’re making.”

Opponents did not seem convinced. 

“Measure ULA is working,” said Joe Donlin, director of the United to House LA, a coalition of labor unions, affordable housing developers and private development skeptics that launched the initial ballot measure, said in a press release. “It’s irresponsible to propose changes without even an analysis of how much it would cost. Why would we give ‘The People’s Billion' to the billionaires who already have so much?”

The council voted to circumvent the typical committee process and push the motion to a full and final vote at the Tuesday meeting, which begins at 10am.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.