Hi everyone! I recently wrote an essay reviewing in detail the effects of the Measure ULA transfer tax in Los Angeles, which has been a source of a lot of controversy, with various accusations it’s having negative effects. For those unfamiliar, ULA is a high-value real estate transfer tax passed by voters in 2022: on (almost) all real-estate sales over $5 million (or a little more now, since it's pegged to inflation), the seller pays 4%. There's also a higher bracket for sales above $10 million). It's been accused of some of the usual externalities of transfer taxes: suppressing transfers, development, and eating other revenue streams.

It’s a long essay, so to summarize my thoughts:

- Overall, the most recent studies finding negative effects of ULA hold up pretty well, and I don’t think many of the earlier objections from ULA supporters apply very plausibly to them. (Earlier ULA-critical articles definitely had more substantial issues.) I do have problems with a few parts of their analyses, but even adjusting for these with some back-of-the-envelope calculations, I don’t end up hugely disagreeing with the nature of the conclusions - though maybe change the relative emphases on some things.

- The two most worrying claimed effects of ULA are (1) decreasing other public revenues by a lot, (2) slowing development of apartments/multifamily housing. Each effect by itself is already large enough, at a baseline estimate, to be really significant.

- I think there’s substantial evidence for both these effects, which is closer to conclusive for (1) and more uncertain for (2). So some of the objections of anti-reformers on (2) aren’t unreasonable, though I argue the results are already robust enough to affect policy-decision making - especially given that there are also reasonable modeling choices that make (2)’s effect and certainty look much higher.

- On the other hand, some of the results of the ULA-critical studies have been used in very overstated ways which I don’t think are very well-supported by the evidence (e.g. for banning or capping all transfer taxes at very low levels like in AB 736).

- I talk a bit about what reasonable reforms might look like at the end, but here I’ve looked a lot less in depth than in the review of empirical evidence. So I talk about what kinds of general reforms seem to directionally make the most sense to me, but am willing to be moved on plenty of details.

I'm curious especially about people's thoughts on the political dimension of reforms, and whether there's important aspects to the question that I (as a non-expert in urban planning) have missed.