What Los Angeles’ ULA Decision Means
On July 1, the Los Angeles City Council voted unanimously to remove a proposed ballot measure that would have temporarily exempted newly constructed multifamily and mixed-use residential projects from Measure ULA during their first ten years.
As a result, there will be no Measure ULA reform measure before voters this November.
For commercial real estate owners, investors, and developers, this decision means that one of the region's most significant taxes on real estate transactions will remain unchanged for now.
What Was Being Proposed?
The proposal would have created a temporary exemption from Measure ULA for newly built housing projects, including mixed-use developments that combine residential and commercial space.
Supporters argued that the exemption could help encourage new housing construction and make projects more financially feasible at a time when development costs remain high.
However, by removing the proposal from the ballot, the City Council decided not to pursue changes to Measure ULA this year.
Why This Matters to Commercial Real Estate
While the proposed exemption was focused on housing, the decision sends an important message to the commercial real estate industry: meaningful changes to Measure ULA are unlikely in the near future.
Continued Uncertainty for Investment
Measure ULA remains one of the biggest concerns for many property owners and investors in Los Angeles.
The additional transfer tax can significantly increase the cost of buying and selling properties. For some investors, this creates uncertainty and may influence where they choose to invest.
Challenges for Mixed-Use Development
Many mixed-use projects include both residential and commercial space. Without the proposed exemption, some projects may continue to face financial challenges.
Higher costs can make it harder for developers to move projects forward, especially in areas where cities are encouraging redevelopment and housing production.
Impacts on Redevelopment and Office Conversions
Los Angeles continues to look for ways to encourage adaptive reuse and office-to-residential conversions.
However, many in the industry have raised concerns that Measure ULA may make these projects more difficult to finance. Additional costs can reduce the money available for building improvements, tenant upgrades, and redevelopment efforts.
Reduced Market Activity
When transaction costs increase, property owners may delay sales or hold assets longer than planned.
This can lead to fewer transactions, reduced market activity, and slower investment across Los Angeles.
What Happens Next?
With no Measure ULA reform measure heading to voters this November, the existing tax structure will remain in place.
Discussions about the long-term impacts of Measure ULA are expected to continue as city leaders, housing advocates, and the commercial real estate industry debate how to balance affordable housing goals with economic growth and investment.
Questions remain about how Measure ULA will affect:
- Future housing production
- Office-to-residential conversion projects
- Investment in mixed-use developments
- The competitiveness of the Los Angeles real estate market
Stay Connected
We will continue to support policies that encourage investment, redevelopment, and economic growth while also addressing the region's housing challenges.
Commercial real estate plays a critical role in supporting jobs, local businesses, and tax revenues throughout Los Angeles. Policies that increase costs and create uncertainty can have long-term impacts on property owners, tenants, employees, and communities.
We will continue monitoring developments related to Measure ULA and advocating for solutions that support both housing goals and a strong commercial real estate market. For example with Proposition 43 which would require future local special taxes proposed through the initiative process to receive approval from two-thirds of voters beginning in 2027.
For now, one thing is clear, Measure ULA will remain one of the most significant policy issues affecting commercial real estate in Los Angeles for the foreseeable future.
Stay connected to BOMA on the Frontline for updates.
