The U.S. Court of Appeals for the Ninth Circuit has agreed to hear a challenge to Measure ULA, a November 2022 referendum in Los Angeles that imposes a tax on high-end property sales to fund affordable housing. Despite falling short of its goals, Measure ULA requires the city to collect a 4% tax on sales exceeding $5 million and a 5.5% tax on sales of property worth $10 million or more, aiming to generate $900 million annually.
The Howard Jarvis Taxpayers’ Association (HJTA) is leading the legal charge, arguing that Measure ULA is unconstitutional as it expands the city’s taxation powers in a way that violates California’s Proposition 13. A Los Angeles County judge dismissed an initial lawsuit by HJTA, but the organization has opted to appeal. Additionally, a proposed statewide ballot measure for 2024 would require a two-thirds majority for tax increases, potentially putting Measure ULA, which won 57.7% of the vote, up for reconsideration.
The case, Newcastle Courtyards LLC et al. v. City of Los Angeles, Case No. 2:2023-cv-00104, remains pending before the Ninth Circuit, with the outcome likely to have far-reaching implications for the city’s approach to affordable housing and its relationship with taxpayers.
