{"id":870155,"date":"2026-10-04T05:32:10","date_gmt":"2026-10-04T05:32:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/870155\/"},"modified":"2026-10-04T05:32:10","modified_gmt":"2026-10-04T05:32:10","slug":"la-mansion-tax-blocked-9100-homes-killed-16650-jobs-and-cost-452m-report","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/870155\/","title":{"rendered":"LA mansion tax blocked 9,100 homes, killed 16,650 jobs and cost $452M: report"},"content":{"rendered":"

LA\u2019s \u201cmansion tax<\/a>,\u201d 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.<\/p>\n

A damning new report says the tax, officially known as United to House LA<\/a>, or ULA \u2014 has had a negative impact on the city\u2019s high-end and multi-family real estate markets and collected less than half what it was expected to generate to tackle the city\u2019s housing crisis.<\/p>\n

The ULA was expected to raise about $900 million a year, or $2.7 billion over its first three years. Instead, it brought in about $1.2 billion.<\/p>\n

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Beverly Hills realtor Danny Brown spoke about the pitfalls of the \u201cmansion tax\u201d imposed on properties on the market over $5 million. Andy Johnstone for CA Post<\/p>\n

The tax \u2014 which went into effect in April 2023 and was championed by socialist mayoral hopeful Councilwoman Nithya Raman<\/a> \u2014 means if a property in LA sells for more than $5.4 million, the seller is taxed 4% of the price at closing. If it sells for more than $10.9 million, it increases to 5.5%.<\/p>\n

Despite its nickname, LA\u2019s \u201cmansion tax\u201d applies far beyond luxury homes. Apartment buildings, offices, warehouses and vacant land can all trigger the tax if they sell above the thresholds.<\/p>\n

About 1,000 of the 9,100-plus new homes lost would have been affordable units \u2014 the very thing the tax was supposed to create \u2014 according to RAND corporation, a non-partisan, nonprofit research group.<\/p>\n

Westside real estate broker Danny Brown told The California Post the tax was \u201danother disaster initiated by the incompetent socialists who run our city.\u201d<\/p>\n

\u201cULA has chopped the legs from under the residential and commercial real estate industry, which is one of the largest parts of our city\u2019s economic engine,\u201d Brown said.<\/p>\n

Prominent westside property broker Danny Brown said the ULA tax continues to hammer the market. Andy Johnstone for CA Post<\/p>\n

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.<\/p>\n

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%.<\/p>\n

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.<\/p>\n

\u201cMeasure ULA has the noble aspiration of delivering more affordable housing inventory to Los Angeles, but its negative repercussions may outweigh its benefits. A transfer tax of this type adds friction to the housing market and slows the number of home transactions,\u201d Joel Berner, a senior economist at Realtor.com<\/a>, told The Post.<\/p>\n

Realtor.com<\/a> is owned by\u2002News Corp, the same parent company that owns The Post.<\/p>\n

Overall, $55.5 million in ULA cash went toward 3,713 existing affordable-housing units in the funding round, rather than building new ones. Google Maps<\/p>\n

\u201cBuilders 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,\u201d Berner added. \u201cThis will lead some to decide that the deals simply are not worthwhile.\u201d<\/p>\n

New research has documented a significant hit to high-value property sales and housing development since ULA took effect in 2023.<\/p>\n

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.<\/p>\n

And the City has barely touched the cash, spending just $114 million as of May \u2014 less than 10% of the money raised. 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 \u2014 nearly 70% \u2014 coming from ULA.<\/p>\n

Los Angeles resident voted for Measure ULA, dubbed the \u201cmansion tax,\u201d in 2022 as a way to get \u201dmillionaires and billionaires\u201d to help build low-income and homeless housing. Google Maps<\/p>\n

But when the tax passed, Raman couldn\u2019t stop bragging.<\/p>\n

\u201cThis 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,\u201d she said.<\/p>\n

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.<\/p>\n

The property sold for about $5.3 million in February 2023, weeks before ULA took effect.<\/p>\n

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. It hit the market last December at $19.995 million. After three price cuts, it\u2019s now listed at $15.995 million.<\/p>\n

If it sells at that price, the ULA bill would be about $880,000.<\/p>\n

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.<\/p>\n

\u201cIt\u2019s 2,000 feet. Not a mansion, even though it\u2019s $5.5 million, because of the land it\u2019s sitting on,\u201d Brown said. \u201cSounds good to tax the millionaires and billionaires. Everyone says, \u201dgreat,\u201d but it\u2019s so far from reality of what happens.\u201d<\/p>\n

For builders, that additional cost reality hits even harder.<\/p>\n

Developer Barry Cassily said ULA is a piece of a larger collection of measures, rules and taxes that make it almost impossible to build housing in Los Angeles. Andy Johnstone for CA Post<\/p>\n

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.<\/p>\n

\u201cYou are taxing housing to pay for housing,\u201d he said.<\/p>\n

Critics say the result is builders have stopped building and owners stop selling.<\/p>\n

Fewer sales also means less property tax revenue, because in California, a property is reassessed to its current market value when it changes ownership.<\/p>\n

A study by UCLA\u2019s Michael Manville and USC\u2019s Mott Smith, covering about 338,000 LA County property sales, has found a sharp decline in transactions above ULA\u2019s threshold.<\/p>\n

\u201cIf in the meantime, you\u2019ve deterred hundreds or thousands of market-rate units, you have not helped affordability,\u201d Manville, who chairs UCLA\u2019s urban planning department, told The Post.<\/p>\n

He called it \u201crobbing Peter to pay Paul.\u201d<\/p>\n

Carolwood Estates lists a luxury home in Brentwood. Andy Johnstone for CA Post<\/p>\n

Manville says the report takes into account other economic factors such as high interest rates. Researchers at Occidental College, meanwhile, argue broader economic conditions better explain the decline<\/a> in multifamily development.<\/p>\n

Their analysis suggests that the slowdown in apartment construction was part of a wider trend affecting development, making it difficult to isolate the tax\u2019s impact from other economic pressures.<\/p>\n

Jason Oppenheim, the luxury broker who stars on Netflix\u2019s \u201cSelling Sunset,\u201d claims RAND\u2019s numbers through September show as many as 10,600 apartments were deterred, against roughly 1,900 new units ULA has helped fund.<\/p>\n

\u201cCity Hall is celebrating the housing it funds from Measure ULA while ignoring the far greater number of apartments its tax is preventing,\u201d Oppenheim told The Post.<\/p>\n

Beverly Hills realtor Danny Brown said a result of ULA is there is less housing being built, more jobs lost in construction, less tax revenue being collected and more drug-addicted zombies roaming our streets. Andy Johnstone for CA Post<\/p>\n

Even those 1,900 units come with an asterisk, with the ULA only typically funding one part of affordable housing projects.<\/p>\n

Manville compared the city\u2019s claim to old TV ads calling Froot Loops \u201cpart of this nutritious breakfast.\u201d<\/p>\n

\u201cIt is a part of that breakfast,\u201d he said. \u201cBut, like, how big of a part really?\u201d<\/p>\n

Raman has since tried to change the tax, proposing earlier this year to exempt newly built apartment, commercial and mixed-use projects from ULA for 15 years.<\/p>\n

\u201cA policy that unintentionally stalls housing production ultimately undermines the very goals voters asked us to achieve,\u201d Raman said.<\/p>\n

However, her proposal failed to make the June ballot amid fierce opposition from labor and pro-ULA groups.<\/p>\n

Critics say the result is builders have stopped building and owners stop selling. Getty Images<\/p>\n

Bass hasn\u2019t been a ULA purist either.<\/p>\n

Last year, the mayor tried to rewrite the tax in Sacramento, then pulled the bill at the last minute after ULA backers revolted.<\/p>\n

Weeks later, after meeting with billionaire developer Rick Caruso, she asked the council to give Palisades fire victims a three-year break from the tax.<\/p>\n

And some of the money isn\u2019t building anything new.<\/p>\n

In April, the city steered $55.5 million toward preserving 3,713 existing affordable units. About $2 million went to 11 buildings run by SRO Housing Corp.<\/p>\n

One of them, the 96-unit Renato Apartments, got $100,000. In a 2024 lawsuit, tenants alleged they lived with bedbugs, cockroaches, rats, sewage leaks and human waste, court papers show.<\/p>\n

A home for sale sign is seen in front of a house with palm trees. Sona \u2013 stock.adobe.com<\/p>\n

SRO Housing has lost $27.8 million since 2022 and has warned the city it will collapse without more public money, Politico reported this month.<\/p>\n

Manville said keeping existing units livable isn\u2019t automatically a bad use of the money.<\/p>\n

\u201cIf for a small amount of money we can take some units that are at risk of being declared uninhabitable and keep them on the market, that could very well be a policy win,\u201d he said.<\/p>\n

Councilwoman Imelda Padilla, who took over the council\u2019s new Housing Committee in August after the committee Raman chaired was broken up, has pushed for quarterly reports on where the money goes.<\/p>\n

\u201cWe must follow these dollars and ensure they are producing the affordable housing Angelenos deserve,\u201d Padilla told The Post.<\/p>\n

ULA\u2019s citizen oversight committee did not respond to The Post\u2019s request for comment.<\/p>\n

Applications for the $466.6 million funding round open Oct. 13 \u2014 three weeks before voters decide whether Raman gets the keys to City Hall.<\/p>\n","protected":false},"excerpt":{"rendered":"LA\u2019s \u201cmansion tax,\u201d sold to Angelenos as a way to tax the rich and boost housing, has instead…\n","protected":false},"author":2,"featured_media":870156,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28,2356,2053,3031,1170,1548],"class_list":["post-870155","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-california","tag-housing","tag-los-angeles","tag-real-estate","tag-taxes"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/870155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=870155"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/870155\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/870156"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=870155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=870155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=870155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}