Los Angeles’s Housing Department wants the City Council to approve four amendments to Measure ULA, the voter-approved real estate transfer tax on sales above $5.3 million. The department calls the changes “narrowly focused.” Critics say that’s exactly the problem.
Measure ULA took effect after the 2022 vote, and supporters projected it would produce 26,000 homes in its first decade. About 800 homes have been built with tax revenue so far. The measure has pulled in more than $1 billion for tenant assistance and affordable housing construction since then, which sounds like a success until you look at the production numbers.
Not close to on track.
The proposed amendments target financing rules that govern how tax dollars flow to affordable housing projects. Specifically, they’d exempt affordable developers from paying the tax at all, smooth out conflicts between Measure ULA loan terms and other public funding sources, allow foreclosed projects to transfer to new developers, and let building owners raise rents when rental subsidies disappear. According to the Housing Department’s report, affordable housing lenders told the city directly that current Measure ULA requirements are discouraging them from funding projects. That’s a structural problem, not an administrative glitch.
The city opened applications for $387 million in housing development and preservation funds last year. Joe Donlin, director of the United to House L.A. coalition, told reporters his group supports the package.
“ULA was written with flexibility to make these exact kinds of amendments,” Donlin said. “We always knew that there would need to be adjustments along the way, and we continue to support efforts to optimize Measure ULA in any way possible.”
The citizen oversight committee that monitors the measure reviewed the recommendations and signed off. That’s the pro-ULA side of the ledger.
Mott Smith doesn’t see it that way. Smith, an adjunct professor of real estate at USC who’s been a consistent critic of the tax, acknowledged the proposed reforms could loosen some overly restrictive spending rules. But he said they don’t touch the tax’s effect on the broader housing market across Los Angeles, where data on housing production shows permits have slowed considerably.
“This is really a form of admission that ULA is not working as designed,” Smith told city officials. “It’s frankly about time that the city admits this because we’re never going to fix it if they can’t admit there’s a problem.”
Smith’s point isn’t just rhetorical. California’s California housing shortage has been worsening for years, and any tax that suppresses market-rate development carries real costs even when it funds affordable units on the other end. The four amendments the Housing Department is recommending don’t engage with that tradeoff at all.
Azeen Khanmalek, executive director of Abundant Housing L.A., lands somewhere in between. She said the changes would help move Measure ULA dollars into actual projects but won’t reverse the broader slowdown in apartment construction that the tax’s critics blame on the policy itself. That’s a significant distinction. Unlocking $387 million in stalled financing is meaningful. Fixing the underlying market signal the tax sends to private developers is a different, harder task that these amendments don’t attempt.
Officials want the Council to act by early fall so housing loans can close before the year ends. That timeline isn’t soft. If the Council delays, projects that are already in the pipeline could lose financing windows, and developers who’ve been waiting on certainty won’t get it.
As LAist first reported, the Housing Department framed these changes as technical corrections rather than a policy reversal. But when affordable housing lenders are telling a city they won’t fund projects because the city’s own loan terms are too restrictive, that’s not a technical problem. It’s the program working against itself.
The 800-home figure is what it is.