The Los Angeles City Council has opted not to move forward with a November ballot measure that proposed exempting new multifamily construction from the controversial Measure ULA property transfer tax. The tax, enacted in 2022, imposes a 4% tax on real estate sales over $5.4 million and 5.5% on sales over $10.9 million to fund affordable housing and homeless services.

Real estate industry groups have criticized the tax, arguing it has suppressed luxury sales and frozen multifamily development. Instead of a voter-led reform, the council instructed the Los Angeles Housing Department to develop an ordinance for a pilot tax credit program. This program would lower the ULA rate for specific multifamily and mixed-use projects that meet certain criteria, such as including affordable units and paying prevailing wages. The move represents a bureaucratic approach that avoids taking the issue back to the voters who originally approved it.