LA’s “mansion tax,” sold to Angelenos as a way to tax the rich and boost housing, has instead blocked the building of 9,100 homes, wiped out 16,650 full-time construction jobs and cost $452 million in revenue.
asserted
tax → sell → revenue
A damning new report says the tax, officially known as United to House LA, or ULA — has had a negative impact on the city’s high-end and multi-family real estate markets and collected less than half what it was expected to generate to tackle the city’s housing crisis.
asserted
it → say → crisis
The ULA was expected to raise about $900 million a year, or $2.7 billion over its first three years.
asserted
ULA → expect → years
Instead, it brought in about $1.2 billion.
asserted
it → bring → billion
The tax — which went into effect in April 2023 and was championed by socialist mayoral hopeful Councilwoman Nithya Raman — means if a property in LA sells for more than $5.4 million, the seller is taxed 4% of the price at closing.
asserted
seller → go → closing
If it sells for more than $10.9 million, it increases to 5.5%.
asserted
it → sell → %
Despite its nickname, LA’s “mansion tax” applies far beyond luxury homes.
asserted
tax → apply → homes
Apartment buildings, offices, warehouses and vacant land can all trigger the tax if they sell above the thresholds.
asserted
they → trigger → thresholds
About 1,000 of the 9,100-plus new homes lost would have been affordable units — the very thing the tax was supposed to create — according to RAND corporation, a non-partisan, nonprofit research group.
uncertain
tax → lose → corporation
Westside real estate broker Danny Brown told The California Post the tax was ”another disaster initiated by the incompetent socialists who run our city.”
asserted
who → tell → city
“ULA has chopped the legs from under the residential and commercial real estate industry, which is one of the largest parts of our city’s economic engine,” Brown said.
asserted
Brown → chop → engine
Mayor Karen Bass did not take a position on the mansion tax, but Raman has since said she was in favor of reforming the tax.
asserted
she → take → tax
RAND found the ULA slashed high-value property sales by an estimated 31% through early 2026, with apartment and commercial sales falling by more than 46%.
asserted
sales → find → %
Simply put, the tax has discouraged some owners from selling and developers from pursuing projects that, because of the tax, no longer make financial sense.
asserted
that → put → sense
“Measure ULA has the noble aspiration of delivering more affordable housing inventory to Los Angeles, but its negative repercussions may outweigh its benefits.
uncertain
repercussions → have → benefits
A transfer tax of this type adds friction to the housing market and slows the number of home transactions,” Joel Berner, a senior economist at Realtor.com, told The Post.
asserted
Berner → add → Post
Realtor.com is owned by News Corp, the same parent company that owns The Post.
asserted
that → own → Post
“Builders are already dealing with high costs of labor and materials, so this added expense when they go to sell a completed or revitalized project squeezes their margins even further,” Berner added.
asserted
Berner → deal → margins
“This will lead some to decide that the deals simply are not worthwhile.”
asserted
deals → lead → some
New research has documented a significant hit to high-value property sales and housing development since ULA took effect in 2023.
asserted
ULA → document → 2023
The tax also wiped out the equivalent of 16,650 full-time construction jobs and cost government agencies $452 million in lost revenue, according to RAND.
uncertain
tax → wipe → RAND
And the City has barely touched the cash, spending just $114 million as of May — less than 10% of the money raised.
uncertain
City → touch → money
The City Council voted 13-0 last Tuesday, Raman included, to put a record $466.6 million toward affordable housing, with $324 million of that — nearly 70% — coming from ULA.
asserted
million → vote → ULA
But when the tax passed, Raman couldn’t stop bragging.
asserted
Raman → pass → ?
“This is truly the first housing initiative of its kind anywhere in the United States that will have such a widespread, immediate, and long-term impact on the housing and homelessness crisis,” she said.
asserted
she → have → crisis
One property in Brentwood, the Westside enclave long favored by Hollywood stars and pro athletes, shows how the tax can play out in the real world.
asserted
tax → favor → world
The property sold for about $5.3 million in February 2023, weeks before ULA took effect.
asserted
ULA → sell → effect
The original house was torn down and replaced with a new 8,990-square-foot, seven-bedroom home with a pool, screening room and guest house.
asserted
house → tear → pool
It hit the market last December at $19.995 million.
asserted
It → hit → million
After three price cuts, it’s now listed at $15.995 million.
asserted
it → list → million
If it sells at that price, the ULA bill would be about $880,000.
asserted
bill → sell → price
Brown showed The Post around the block and said even the modest older houses next door could get hit because the land beneath them alone is worth more than $5 million.
uncertain
land → show → them
“It’s 2,000 feet.
asserted
It → ’ → ?
Not a mansion, even though it’s $5.5 million, because of the land it’s sitting on,” Brown said.
asserted
Brown → ’ → land
Everyone says, ”great,” but it’s so far from reality of what happens.”
asserted
what → say → reality
For builders, that additional cost reality hits even harder.
asserted
reality → hit → builders
Developer Barry Cassily said developers already operate on threadbare profit margins, and now have to factor in an additional 4 to 5.5% bite out of qualifying sales, potentially making some projects financially unworkable.
asserted
projects → say → sales
“You are taxing housing to pay for housing,” he said.
asserted
he → tax → housing
Critics say the result is builders have stopped building and owners stop selling.
asserted
owners → say → ?
Fewer sales also means less property tax revenue, because in California, a property is reassessed to its current market value when it changes ownership.
asserted
it → mean → ownership
…and 28 more, not listed.
The Aporia
