The Battle Over Los Angeles’s Mansion Tax

The Battle Over Los Angeles’s Mansion Tax

The Measure ULA campaign shows how a housing-labor coalition can transform the political landscape, even in the face of staunch special interest reaction.

Carlos Casillas, a fifty-year-old renter in Los Angeles, lives in a 150-square-foot studio apartment in Highland Park, a longtime Latino neighborhood that has been gentrifying. The rent is $1,450 a month. “I had no choice,” he said. “I needed a place to live. So I told myself I gotta work three jobs.” Casillas drives for Uber and Postmates, does construction work, and is a first responder at a mental health center, dispatched by the L.A. Police Department to de-escalate potentially violent situations, most involving homeless persons.

A divorced father of three who was born and raised in Los Angeles, Casillas was worried that he might become homeless himself. “I was stressed out, living paycheck to paycheck,” he explained. “I had insomnia. It was hard for me to concentrate at work, to give 100 percent to the homeless clients I was supporting, knowing that I could be in their shoes at any given moment if anything goes wrong.” Fortunately, he saw a flyer for a local community organizing group, LA Más. Casillas attended a few meetings and met with the staff, who told him about a new rental assistance program for people threatened with eviction and helped him apply.

“When I finally got the email saying, congratulations, we are going to assist you with the funds for six months of back rent, I was in disbelief, in awe,” Casillas said. “I actually got down on my knees and prayed and gave thanks. It was a big weight off my shoulders, and I was able to breathe. And I was able to sleep again.” Without the assistance, Casillas would have been living in his car. “My main concern at the time was my children: the stress and the fear they would have had knowing that their father was homeless.”

Casillas was saved from eviction by a new L.A. law passed in November 2022. Though often called the “mansion tax,” the bill requires sellers of both residential and commercial properties valued above $5 million to pay a 4 percent tax, while sellers of properties of $10 million and up pay 5.5 percent. (The thresholds are adjusted for inflation each year.) The funds are used to help tenants stay in their homes and to support the construction of affordable housing.

Officially called Measure ULA (United to House LA), the law went into effect in April 2023, and it is likely the largest locally generated housing fund in any U.S. city. By November 30, 2024, it had raised $479 million from 713 transactions. That pace is likely to increase significantly once high interest rates—an obstacle to real estate construction and sales—decline.

According to the Institute on Taxation and Economic Policy, seventeen other cities and counties, including New York City and San Francisco, and seven states have enacted progressive taxes on high-price real e...