Measure ULA and the November 3 Ballot: What Developers Should Know
The ULA rewrite is not on the November 3 ballot. What Prop 43 and Prop TE do, today's $5.4M and $10.9M lines, and the sale vs refi math on a 2028 exit.
October 24, 2026
Updated October 24, 2026. The vote is November 3.
Developers keep asking me what November 3 does to Measure ULA. The short answer: the rewrite they were waiting for is not on the ballot. The tax on a 2028 sale is the tax on the books today, and the levers that move it are mostly yours.
Where ULA stands today
For sales closing on or after July 1, 2026, ULA is 4% on a City of Los Angeles sale above $5.4 million and 5.5% at $10.9 million and up. A year ago the lines were $5.3 million and $10.6 million. The rate applies to the entire price, not the slice above the line, and it sits on top of the city's base 0.45% transfer tax. The lines reset every July with the Chained CPI, so the 2028 line will be higher by an amount nobody knows yet. I covered the cliff in Issue 5, and the broader rules are in our Measure ULA guide.
What is actually on the ballot
| Item | What it does | Effect on a ground up rental |
|---|---|---|
| City Proposition TE | One-time ULA exemption or refund for residential property damaged or destroyed in the Palisades Fire, sold by the owner of record on January 7, 2025, through January 6, 2030 | None, unless you are buying a burned lot from that original owner |
| State Proposition 43 (ACA 22) | Starting January 1, 2027, new, increased or extended local special taxes proposed by voters need a two-thirds vote instead of a simple majority | ULA stays as is. It lowers the odds of the next ULA-style tax |
| City ULA rewrite (rate cut or new construction exemption) | Not on the ballot | No change |
| Howard Jarvis initiative against ULA | Pulled in June; not among the 14 measures the Secretary of State certified | No change |
One number on Prop 43: ULA passed in 2022 with 57.77% of the vote. Under Prop 43, a citizen measure like it would need two-thirds. That matters on a long hold. It does not change what you owe in 2028.
What happened to the rewrite
Council File 26-0782 started in May as a motion to put a ULA rate cut on this ballot, with options between 2% and 3.5% for multifamily. Housing groups pushed for a 15 year new construction exemption; it never made it into the motion. A separate measure exempting new multifamily for its first ten years was shelved on July 1, which took it off the November ballot.
What the council adopted that day was an instruction to the Housing Department and City Attorney to bring back ordinance language for a five year pilot tax credit. As written, credits sized by the number and depth of affordable units could bring the effective rate down to 1.5% on the sale of a newly built multifamily or mixed use project that has covenanted affordable units, paid prevailing wage, pulled its building permit after the program starts, and sells within ten years of certificate of occupancy. As of this week I could find no adopted ordinance, so I would not underwrite it. And a project already permitted would not qualify as drafted.
Worked example: a 2028 exit
Round, illustrative numbers. A ground up rental costs $10 million all in, delivers in 2027, and stabilizes at $720,000 of NOI. At a 6% cap it is worth $12 million.
- Sell in 2028 at $12 million. ULA at 5.5% is $660,000, plus $54,000 of base city tax. The 2028 line will be higher, but $12 million clears it easily.
- Price near a line. At today's thresholds, a $10.85 million sale pays $434,000 of ULA and a $10.95 million sale pays $602,250. The extra $100,000 of price costs $168,250 of tax, so the seller nets $68,250 less.
- Refinance instead. A perm sized at 1.20x DSCR, 6.5%, 30 year amortization supports about $7.9 million on that NOI, enough to retire a $7.5 million construction loan. A refinance is not a sale, so no ULA is due. The tax waits for the day you do sell.
- If the pilot became law and you qualified. At best, 1.5% on $12 million is $180,000, which is $480,000 less than today's rate.
The levers you control
- Sell or hold. Run the exit both ways before you buy the land. If the deal only works with a 2028 sale, the $660,000 belongs in your land price today.
- Where the price lands, and when. Near a line, the line matters more than the price, and the lines step up every July 1. Use the Office of Finance thresholds for the year you actually close.
- Permit timing. If you are pre-permit and the pilot is adopted, the permit date could decide eligibility. Watch CF 26-0782.
Questions to take to your tax counsel: Would a sale of interests in my entity be treated as a sale for ULA? Who pays the tax under my purchase contract? What goes into gross consideration on my deal, including any debt the buyer assumes? And if the pilot is adopted, would my project meet its terms?
How I'd finance it
On a deal like this I would size the construction loan at up to 75% of cost, usually limited by the income approach at 1.20x DSCR at 6.5% on a 30 year amortization, then line up a permanent loan sized the same way to take it out. That perm is also your option to hold instead of selling into the tax. If you are buying land in the city now, send me the deal before you go hard and I will run both exits. More for LA developers.
Trevor Damyan
President, Commercial Lending Solutions
Sources
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