State lawmakers have introduced a bill that would rewrite key parts of Measure ULA, the real estate transfer tax passed by nearly 58 percent of Los Angeles voters in 2022. The proposed legislation would slash the tax rate on certain newly built commercial and multifamily properties from 4 to 1.5 percent, roll back restrictions on what kinds of buyers can purchase distressed ULA-funded buildings, and relax affordability covenants that limit rent increases and tenant eligibility. The bill arrives just days after the city opened applications for $387 million in Measure ULA funding and as opponents of the tax ramp up pressure with a potential 2026 ballot measure to repeal it entirely.

The bill, SB 423, is the product of behind-the-scenes negotiations led in part by Los Angeles Mayor Karen Bass. While it is officially authored by Senators Lena Gonzalez and Tina McKinnor, Bass tapped former Assembly Speaker Bob Hertzberg to hammer out the legislative language and build consensus with real estate and business interests that have long opposed the tax. Her administration has characterized the effort as a way to “save” ULA from a more draconian repeal, but the resulting bill would significantly weaken the measure’s reach and revenue.

Supporters of the legislation argue that Measure ULA is stifling housing production at a moment when Los Angeles can least afford it. Citing recent studies from UCLA, USC, and other economists, they claim the tax has had a chilling effect on multifamily development and could actually reduce the number of affordable homes being built. Developers and real estate interests have echoed these concerns for months, warning that high-value transactions are falling through and projects are being shelved across the city. Mott Smith, a USC adjunct professor and co-author of one such paper, said, “When we squeeze the housing supply, the poor feel it the most.”

But those claims have come under intense scrutiny. A new report published last week by researchers from UCLA, USC, and Occidental College challenges the very foundations of the anti-ULA narrative. The authors argue that the widely cited economic studies driving the repeal push are riddled with flawed methodology, premature conclusions, and misleading assumptions. Joan Ling, a longtime UCLA lecturer and co-author of the rebuttal, said it is simply too early to blame ULA for a slowdown in housing construction. She points instead to rising interest rates, high construction costs, and the city’s recent zoning overhaul as more plausible explanations for why developers may be delaying projects. “Timing is everything,” Ling said.

The report also pushes back against alarmist claims about job losses and stalled production. While critics of ULA mocked a widely circulated claim that the measure created 10,000 union jobs, the rebuttal notes that this estimate is based on standard city accounting practices that tie construction spending to job creation benchmarks used across departments. The nine affordable housing projects currently awarded Measure ULA funds represent 795 planned units, many of which are not yet built. That is not a failure – it is how affordable housing timelines work. The researchers emphasize that ULA is still in its early stages and that judging it based on incomplete permit data or unbuilt project sites ignores the long runway these developments require.

Despite generating over $830 million since April 2023, Measure ULA has been under siege from the moment it passed. Wealthy homeowners, real estate lobbies, and anti-tax groups have consistently sought to undermine it. Now, just as the funding begins to reach shovel-ready projects, lawmakers encouraged by Bass and her team are considering a major rollback. While Bass has not publicly taken ownership of the bill, her fingerprints are all over the process. Hertzberg, her designated point person, has openly described the legislation as a response to “unintended consequences” of ULA and framed it as an economic stimulus. The bill’s backers say it is designed to prevent support for the Howard Jarvis Taxpayers Association’s 2026 repeal campaign, but critics see it as a preemptive surrender that trades away voter-approved funding in exchange for vague political assurances.

This legislative effort also plays into a broader strategy by the Howard Jarvis Taxpayers Association, which is collecting signatures for a ballot measure that would gut not only ULA but any local transfer tax that exceeds 0.11 percent. That measure would retroactively impose a two-thirds threshold on citizen-led initiatives like ULA, stripping away one of the most powerful tools Angelenos have to tax extreme wealth for the public good.

In a city where a single adult with one child needs to make nearly $49 an hour to cover basic living expenses, Measure ULA is one of the only policies generating large-scale public investment in affordable housing and tenant stability. While not all of its impacts are visible yet, its early rent relief efforts have cleared debt for thousands of households and funded free legal defense for tenants facing eviction. Critics may point to empty lots or unbuilt units, but these projects are now in the pipeline precisely because Measure ULA exists. Lawmakers seeking to rewrite it should be honest about whose interests they are serving and whose voices they are ignoring.