Measure ULA has now been in effect for two years, and the market impact is impossible to ignore. The tax was projected to generate between $600 million and $1.1 billion annually for housing, but actual collections are running roughly 50 percent below projections. More significantly, high-value property transactions inside the Los Angeles city limits have declined approximately 50 percent compared to pre-ULA activity. For sellers and buyers navigating the current landscape, understanding these shifts is essential to strategic decision-making.
Understanding Measure ULA
Measure ULA, adopted in November 2024, imposes a progressive transfer tax on residential property sales within Los Angeles city limits:
- 4 percent on sales between $5 million and $10 million
- 5.5 percent on sales above $10 million
The tax applies to the sale price, not the property's appraised value. For a $10 million sale, the buyer faces a $400,000 ULA liability. For a $20 million sale, that figure climbs to $1.1 million. These are not trivial amounts, and they function as a significant price friction point in the transaction.
Revenue Reality vs. Projections
Two years in, Measure ULA has collected approximately $1 billion cumulatively—well below the $1.2 billion to $2.2 billion in projected biennial revenue. The annual run rate averages approximately $288 million, compared to the midpoint projection of $850 million per year. This gap is not due to fewer sales in other price tiers; it reflects a clear behavioral response among high-net-worth buyers and sellers at the threshold where the tax applies.
The shortfall raises questions about the long-term viability of ULA as a revenue mechanism. Tax policy advocates have argued for expanded brackets and higher rates to close the gap, but such proposals face political headwinds and further risk accelerating out-of-jurisdiction migration.
Transaction Volume Decline and Market Migration
The data is stark: high-value transactions inside Los Angeles city limits have fallen roughly 50 percent since ULA took effect. Simultaneously, transactions in adjacent jurisdictions—particularly Manhattan Beach, Beverly Hills, and unincorporated areas—have surged. This is rational market behavior. Buyers and sellers are not disappearing; they are relocating transactions to avoid the tax.
The decline extends beyond residential sales. Commercial and multifamily transactions within the city have also contracted 30 to 50 percent, suggesting that the tax is meaningfully altering development and investment patterns across all real estate classes.
UCLA Research: Housing Affordability Paradox
Recent UCLA research has quantified an unintended consequence of the tax: reduced housing supply development. The analysis suggests that ULA is costing the city approximately 1,900 new units per year. This occurs because developers and investors who would otherwise pursue residential projects inside the city limits are choosing alternative locations where the tax does not apply or is lower. The paradox is difficult to ignore: a tax designed to fund affordable housing may actually be constraining the supply-side conditions necessary to address affordability long-term.
The Howard Jarvis Petition and November 2026 Ballot
The Howard Jarvis Taxpayers Association has qualified a ballot measure for November 2026 that would repeal Measure ULA. If successful, this initiative would eliminate the tax entirely. The political contest is now open, and the outcome remains uncertain. For participants in the Los Angeles market, this creates strategic ambiguity: Should you execute transactions now under the current ULA regime, or wait to see if the November vote changes the landscape?
Strategic Implications: Timing and Jurisdiction Arbitrage
For sellers, the ULA landscape creates specific strategic considerations:
Timing: If your property is in Los Angeles city proper and you are considering sale, the current market has already priced in the ULA burden. Pricing is unlikely to improve materially if the tax is repealed, because repeal is already partially reflected in market expectations. The advantage of executing a transaction now is certainty; the cost is the tax. Waiting introduces political and market uncertainty.
Jurisdictional Arbitrage: For high-value properties on the borders of Los Angeles city limits—particularly in Manhattan Beach, Beverly Hills, or unincorporated county areas—location advantage is material. Properties outside the city boundary can command price premiums precisely because they avoid the ULA burden. This has reshaped relative valuations across the region.
Entity Structuring: Some transactions have shifted toward entity-based structures (LLC transfers, corporate conveyances) to reduce ULA liability, though such strategies face increasing scrutiny from the city assessor. This is a rapidly evolving legal and tax area, and buyers and sellers must work closely with qualified tax counsel to navigate the complexity.
How Elite Collective Advises Clients on ULA
We approach ULA strategy holistically. For sellers, we help quantify the tax impact on net proceeds and provide transparent modeling of various transactional approaches. We coordinate with tax advisors and accountants to ensure that all legal structuring options are evaluated. For buyers, we factor the tax into offer strategy and negotiation positioning.
Most importantly, we do not pretend that ULA will disappear. We acknowledge the current regime, price accordingly, and advise clients on the factors that might shift the calculus—such as the November 2026 ballot outcome.
The landscape has changed. High-value transactions are moving to the periphery. The question for today's sellers is not whether to wish the tax away, but how to position your property strategically within the constraints it creates. That is the work we do at Elite Collective.