The Unintended Consequences of Measure ULA for the CRE Industry
A new report from UCLA highlights how Measure ULA is affecting Los Angeles’s real estate market.
What You Need to Know
Measure ULA, passed in April 2023, adds a 4% tax on property sales between $5 million and $10 million, and 5.5% on sales over $10 million.
Originally called a "Mansion Tax" for luxury homes, the measure also affects other types of properties.
A UCLA report shows a 30-50% drop in property transactions, including commercial, industrial, and multifamily properties, since the tax was implemented.
The decline is bigger in Los Angeles than other areas, suggesting Measure ULA is the cause.
How It Impacts You
For commercial real estate professionals, these findings highlight a few key points:
Transaction Decline: Fewer high-value property deals suggest a slowing market, which could mean fewer opportunities for property managers and developers.
Development Challenges: The tax may discourage investment in new commercial and multifamily projects due to higher costs affecting feasibility and financing.
Revenue Impact: Fewer property sales can reduce property tax revenue, which may affect public services and infrastructure for commercial properties
Stay Connected
Staying informed is crucial in managing the challenges of Measure ULA.
Please stay connected on BOMA on the Frontline for updates on the battle against Measure ULA.
