Three years after Los Angeles voters approved Measure ULA, the city’s “mansion tax,” the City Council is now moving to carve out one of its biggest exemptions yet — at the same time a statewide effort to repeal the tax entirely is headed to the November ballot.

On June 17, the council voted 9-5 to begin drafting a ballot measure that would exempt newly constructed apartment and mixed-use residential buildings from ULA for their first ten years. The proposal, introduced by Councilmembers Tim McOsker and Katy Yaroslavsky, would ultimately require voter approval. The same day, councilmembers also advanced a separate proposal exempting Pacific Palisades homeowners who sell properties damaged in the January 2025 fire.

Neither measure is final, as council must still approve ballot language later this summer. But the votes mark the clearest step yet toward reducing a tax that voters created specifically to fund affordable housing, eviction defense, rent relief, and homelessness prevention.

The timing is striking. The Howard Jarvis Taxpayers Association has already qualified a November ballot measure that would repeal Los Angeles’ transfer tax entirely, eliminate similar taxes across California, and make it harder for local governments to pass new taxes in the future. If both measures advance, voters could find themselves considering two separate efforts to scale back ULA on the same ballot: City Council’s targeted exemption and the anti-tax lobby’s full repeal.

Supporters of ULA argue the council is doing the “repeal ULA” campaign’s work for it. The United to House LA coalition, which sponsored the original measure, noted that a council committee had already spent months developing a narrower exemption aimed at encouraging multifamily construction. Instead, the council chose to pursue a broader ballot measure. Coalition leaders warned that the proposal could divert tens of millions of dollars annually away from affordable housing and tenant protection programs. Labor leaders delivered a similar message during public comment. Ariel Moore of the LA County Federation of Labor asked councilmembers to choose between funding affordable housing or reducing the resources available to build it.

Supporters of the exemption argue that ULA has discouraged housing production. Council President Marqueece Harris-Dawson pointed to declining affordable housing construction since the tax took effect in 2023, arguing that neighboring cities without similar taxes have not experienced the same slowdown.

But that claim remains disputed. Research from UCLA, USC, and Occidental College found little evidence that ULA itself is responsible for reduced housing production, instead identifying high interest rates, rising construction costs, and broader market conditions as more significant factors. Councilmember Ysabel Jurado, who voted against the proposal, argued that the debate has become too narrowly focused on housing production while overlooking ULA’s other purpose, preventing displacement.

“When we focus just on housing production alone, we’re missing the mark about what this measure was actually intended to do, which is to keep Angelenos housed,” Jurado said.

That distinction matters because roughly one-third of ULA revenue is dedicated not to building housing, but to helping tenants stay in the homes they already have through rent assistance, eviction defense, and income support programs. Preventing displacement often costs a fraction of what it takes to build new affordable housing following eviction.

Despite repeated attacks from developers, business groups, and anti-tax advocates, ULA has generated roughly $1.2 billion since voters approved it in 2022, making it Los Angeles’ largest dedicated source of affordable housing funding. The June 17 vote is the latest chapter in a longer effort to weaken ULA from within city government. Similar exemption proposals have surfaced repeatedly over the past two years, including a previous version backed by Councilmember Nithya Raman that would have exempted new construction for fifteen years instead of ten.

For the Westside, the debate carries particular weight. CD11 consistently ranks among the city’s largest sources of ULA revenue because many of Los Angeles’ highest-value real estate transactions occur here. And one of the proposal’s authors, Councilmember Katy Yaroslavsky, represents a district that includes some of the city’s most expensive residential and commercial properties.