Critics Expect L.A.’s New ‘Mansion Tax’ to Chill Development Market

A new real estate transfer tax won the approval of L.A. voters after being promoted as a “mansion tax.” No some real estate and development experts are saying that the new transfer tax will have a much broader impact on the real estate market.

2 minute read

December 19, 2022, 10:00 AM PST

By James Brasuell @CasualBrasuell


Los Angeles Residential

Joakim Lloyd Raboff / Shutterstock

“Just weeks after Los Angeles voters backed a new measure that puts a one-time transfer tax on property sales above $5 million to generate money for affordable housing and homelessness prevention, the city’s affluent homeowners are exploring potential ways of avoiding the tax,” reports Jack Fleming for the Los Angeles Times. Prop-development advocates in the city are also concerned about the measure’s likely effect on the development market in the nation’s second-most-populous city.

Measure ULA, as the voter-approved measure is called, imposed a 4 percent tax on sales of property valued at more than $5 million, increasing to 5.5 percent on property worth more than $10 million.

Jason Oppenheim of the Oppenheim Group is quoted in the article saying the 4 and 5.5 percent taxes amount to 20 to 30 percent of developer profits. “So those developers will choose to develop in other luxury communities where they won’t have to pay the tax, such as Beverly Hills, West Hollywood or Newport Beach.”

Shane Phillips, Housing Initiative Project Manager for UCLA’s Lewis Center, is also quoted in the article explaining his opinions of the measure’s effect likely effect on the development.

“[G]iven L.A.’s housing shortage, he thinks developers building new, mixed-income multifamily construction should be exempt from the tax, or else they might be discouraged from building such housing. As it stands, developers who buy land for less than $5 million and then construct multifamily housing on it, likely pushing its value above $5 million, would owe the transfer tax whenever they sell the property,” writes Fleming.

Phillips and others from the Lewis Center, have published a pair of reports on the expected effects of Measure ULA in recent months:

Thursday, December 15, 2022 in Los Angeles Times

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 2, 2025 - Diana Ionescu

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

Former New York Governor Andrew Cuomo walking down city street.

Cuomo Is the Candidate of Both NIMBYs and Developers. What Gives?

In the New York City mayoral race, odd bedfellows align to preserve the housing status quo.

June 23, 2025 - Benjamin Schneider

Blue and silver Amtrak train at small station.

Amtrak Rolls Out New Orleans to Alabama “Mardi Gras” Train

The new service will operate morning and evening departures between Mobile and New Orleans.

6 seconds ago - New Orleans City Business

Large spinning swing ride at Chicago's Navy Pier.

The Subversive Car-Free Guide to Trump's Great American Road Trip

Car-free ways to access Chicagoland’s best tourist attractions.

1 hour ago - Streetsblog Chicago

Aerial view of downtown San Antonio, Texas at night with rotating Tower of the Americas in foreground.

San Antonio and Austin are Fusing Into one Massive Megaregion

The region spanning the two central Texas cities is growing fast, posing challenges for local infrastructure and water supplies.

2 hours ago - Governing