Measure ULA Challenge Dismissed In LA Superior Court
This week was a big one for supporters of Measure ULA, the real estate transfer tax also sometimes called the mansion tax despite the fact that it applies to commercial transactions as well as residential.
On Tuesday, a Los Angeles County Superior Court judge rejected challenges to the measure, which was approved by voters in November 2022, brought by the Apartment Association of Greater Los Angeles and the Howard Jarvis Taxpayers Association.
“The judge's ruling confirms what we knew all along: ULA is the law of the land and it's the will of the people,” Joe Donlin, director of the United to House LA Coalition, which drafted the measure, told Bisnow in an emailed statement. “And it reminds us of the power of the people to shape our city's future for the good.”
AAGLA took the ruling in stride, calling it a “temporary setback” and voicing its intent to appeal the decision.
“We need to get this fixed before every development project seeks shelter in neighboring jurisdictions and the real estate business completely abandons us here in the City of Los Angeles,” AAGLA Executive Director Daniel Yukelson told Bisnow in an email.
Yukelson called the ruling “a potential disaster for the real estate business in Los Angeles” and said it would deter development in the city.
The legal fate of Measure ULA threw a slight hitch in plans to use the money for efforts to keep Angelenos housed, including building affordable housing and providing legal aid and eviction defense for tenants facing eviction.
In March, the city administrative officer told city officials to plan as though it might lose these legal challenges, instructing them to arrange a way to pay back any Measure ULA money it had already distributed. By June, Mayor Karen Bass’ budget laid out a plan to spend $150M of Measure ULA funds and identified a potential reimbursement source.
State-level challenges to the measure were dismissed in September, and there are no other active state or federal-level challenges. There is, however, a measure on the 2024 ballot that would invalidate the transfer tax.
Measure ULA has filled the city's coffers more slowly than anticipated. It went into effect in a commercial and residential market with some of the highest interest rates seen in decades, tamping down transactions across the board. Some industry watchers have said that the combination of these larger market factors and ULA have tamped down transactions in LA even more than in other areas.
The United to House LA Coalition is active in determining implementation for Measure ULA. Donlin said $30M of ULA funds are set to go out in the form of rental assistance for rent-burdened seniors and families, and $50M in ULA revenues for affordable housing “will spur new construction as early as this coming February.”
“The benefits of the mansion tax are just getting started,” Donlin said.
