Los Angeles mansion tax impacts housing and jobs

A new report indicates that Los Angeles’s United to House LA (ULA) tax, commonly referred to as the ‘mansion tax,’ has significantly impacted the city’s real estate and construction sectors. Since its implementation in April 2023, the tax has reportedly blocked the construction of 9,100 homes and resulted in the loss of 16,650 full-time construction jobs.

While the tax was intended to generate approximately $900 million annually to address the housing crisis, it has collected roughly $1.2 billion over its first three years, falling short of the projected $2.7 billion. The tax applies to property sales exceeding $5.4 million at a rate of 4%, increasing to 5.5% for sales over $10.9 million.

According to the RAND Corporation, the tax affects more than just luxury residences, impacting apartment buildings, offices, and warehouses. The report notes that approximately 1,000 of the lost housing units would have been affordable housing, which was a primary goal of the policy.