Why Los Angeles is spending $544 million from Measure ULA after a near repeal scare

Measure ULA faces a big moment

Measure ULA is now at the center of a major Los Angeles housing debate. The Los Angeles City Council approved a $544.3 million spending plan from the tax, the largest allocation since the program began, and sent it to Mayor Karen Bass for final approval.

The money is aimed at affordable housing and homelessness prevention. Supporters say Los Angeles badly needs the funding. Critics say the tax, often called the “mansion tax,” has also created problems for property sales and development.

Measure ULA money has a clear split

Measure ULA is designed to divide money between two main goals. The city says 70% of the program funds affordable housing, while 30% supports homelessness prevention. That split shapes how each yearly spending plan is built.

For the new plan, about $381 million is going toward affordable housing programs. Another $163.3 million is planned for homelessness prevention. Together, the funding touches renters, developers, nonprofits, and city housing programs.

Measure ULA survived a close call

Measure ULA nearly faced a serious statewide challenge. A tax-limiting proposal backed by the Howard Jarvis Taxpayers Association could have weakened or eliminated local transfer taxes, such as ULA, if voters approved it.

A last-minute Sacramento deal changed that path. The Howard Jarvis-backed measure was pulled before the ballot deadline, while a separate proposal on special tax voting rules moved forward without touching existing transfer taxes such as ULA. That meant Los Angeles could keep spending ULA money for now.

Why the tax is called a mansion tax

Measure ULA is often called a mansion tax because it applies to high-value property sales. But the nickname can be misleading. The tax does not only apply to luxury homes.

It can also apply to apartment buildings, commercial properties, mixed-use buildings, and vacant land if the sale price is high enough. That is one reason the debate is so heated. Supporters see housing money. Critics see a broader real estate tax.

Little-known fact: For transactions closing after June 30, 2026, Los Angeles will raise the Measure ULA thresholds to $5.4 million and $10.9 million.

The tax rates are not low

Measure ULA adds a major cost when a qualifying property sells. Los Angeles says sales above the lower threshold are taxed at 4%, while sales above the higher threshold are taxed at 5.5%. That is on top of regular transfer taxes.

For a multimillion-dollar property deal, that can mean hundreds of thousands of dollars. Supporters say very high-value sales can help fund public needs. Critics say the cost can scare off deals or change how projects are financed.

Fun fact: Los Angeles’ finance office says the tax applies based on a property’s sales price at closing.

Affordable housing gets the biggest share

The biggest part of the new spending plan is for affordable housing. That can include building new homes, preserving existing affordable units, and helping nonprofit or public partners move projects forward.

Los Angeles has a deep housing shortage, so supporters say this funding matters. They argue that without a steady local source of money, the city would have fewer tools to create lower-cost homes in one of America’s most expensive markets.

Renters are part of the plan

The second major piece of the plan focuses on homelessness prevention. That can include rental assistance, eviction defense, tenant outreach, and income support for people at risk of losing housing.

This matters because a missed rent payment can lead to an eviction, and an eviction can push a family into a deeper crisis. Supporters say preventing homelessness can be cheaper and more humane than responding after someone loses a home.

Critics say sales have slowed

Critics argue that Measure ULA has chilled high-value real estate sales. If owners delay selling to avoid the tax, the city may collect less than expected. That also means fewer deals moving through the market.

A 2026 RAND report said Measure ULA had raised $1.2 billion, but also reduced high-value real estate sales by 31% and cut housing production by more than 9,000 units through early 2026. That gives critics a strong talking point. The question is whether the housing benefits outweigh the market slowdown.

Builders worry about apartments

The biggest concern from builders is not just luxury homes. Apartment developers say the tax can apply when large multifamily properties or development sites are sold. That can affect the math behind new housing projects.

If developers expect a costly tax when a project changes hands, some may pause, shrink, or cancel plans. Supporters dispute that ULA is the main cause of construction problems, but the concern has become central to the debate.

The money has not met early hopes

Measure ULA has raised more than $1 billion, but early projections were much higher. Supporters once projected that the tax could raise close to $1 billion per year, but actual collections have fallen far short of that level as real estate activity slowed.

That gap matters because city programs were built around big promises. When sales slow or revenue falls short of expectations, Los Angeles must decide which housing and renter programs to fund first.

Spending the money takes time

Raising money is one challenge. Spending it well is another. Affordable housing projects can take years because they need land, permits, financing, construction plans, and community review.

That can frustrate residents who want quick results. Rental help and eviction defense can move faster, but building homes usually takes longer. The city now faces pressure to demonstrate that ULA funds are not merely collected but used effectively.

The debate is not over

Even after the latest deal, Measure ULA is not free from pressure. Some critics still want reforms, especially for apartment buildings and commercial properties. Supporters want to protect the money for renters and affordable housing.

That leaves Los Angeles in a tough spot. Changing the tax could calm parts of the real estate market. Keeping it strong could protect a major funding stream. Either choice comes with political and housing consequences.

For another Los Angeles housing tax update tied to Measure ULA, affordable housing funds, and real estate pressure, see why reform efforts are still not going away.

LA is testing a hard tradeoff

The $544 million plan shows how much Los Angeles is relying on Measure ULA. The city needs money for affordable housing and homelessness prevention, but it also needs a real estate market that keeps housing projects moving.

That is why this fight matters beyond City Hall. It touches renters, homeowners, builders, landlords, nonprofits, and taxpayers. LA is testing whether a high-value real estate transfer tax can help address housing problems without creating new ones.

For another Los Angeles tax update tied to Measure ULA, housing funds, and real estate pressure, see why mansion tax changes are facing an uncertain next move.

Do voters deserve another say when a rejected tax fight turns into major city spending? Share your thoughts and drop a comment.

This slideshow was made with AI assistance and human editing.

Read More From This Brand:

• Mark Zuckerberg’s $170M Florida mansion sparks speculation about California’s billionaire tax
• Hillsborough County homeowners could feel the effects of sweeping tax changes
• Property tax hikes are reshaping the cost of doing business in Nashville