Commercial Construction Eyes ULA Exemption

Major ULA Changes Proposed

Bisnow reports that Councilmember Nithya Raman introduced a new motion that could bring major relief to commercial construction in Los Angeles. The proposal offers a 15-year exemption from Measure ULA’s transfer tax. It would apply to newly built commercial, multifamily, and mixed-use properties sold during that window.

Substantial rehabilitation projects would also qualify. The plan also offers disaster victims a three-year exemption and covers multifamily properties with at least four units.

Why It Matters

Enacted in April 2023, Measure ULA imposes a 4% tax on sales over $5M and 5.5% on those above $10M. While the measure has generated more than $1B—split among single-family, commercial, and multifamily sales—it has drawn criticism for impacting development and capital flows. Much of that revenue has already been channeled into affordable housing initiatives, further fueling debate over whether the tax’s economic trade-offs are justified.

Citing shifting lender interest to other markets, Raman emphasized the need for these changes to keep LA construction competitive and maintain housing production momentum.

What’s Next

The city council is set to discuss the proposal, which would require voter approval in June. If adopted, the move could reshape commercial construction incentives and market activity across Los Angeles.