ULA on the Clock: The $5.4M Decision Every Seller Faces Now

Jordyn: Welcome to Listing Price. I'm Jordyn. David: And I'm David. Today's episode, Jordyn: Wow. David: oh man, this one's got teeth. Jordyn: Okay, so get this. There's a $55M Brentwood deal racing a June 30th deadline, and the difference between closing before or after that date is a $220,000 tax swing. David: $220,000. Jordyn: On the same house, same price, different recording date. David: That is the LA Office of Finance confirming the ULA threshold jumps from $53M to $54M on July 1. 1. Three weeks left. Three weeks. Jordyn: The clock is running. And here's the thing, though. That's just the opening act. David: And here's the thing, though. That's just the opening act. We're going to go deep on Measure ULA's three-year scorecard. $1.2 billion collected, only $120 million spent. Jordyn: Cute math, right? And a UCLA-RAND study saying 1910 fewer apartments built every year because of it. So real talk. City Hall had a chance to reform this. This David: Hmm. Jordyn: and passed. David: Passed. Now Howard Jarvis has a statewide repeal on the November ballot. The reform window closed and the wrecking ball showed up. Jordyn: Basically. David: Then you get into the mechanics. A $15 million Bird Streets home in escrow right now. And there are three dates every seller above $5.4 million needs to know: June 25th, July 1, and November 3rd. Jordyn: And a post-election trap nobody's talking about. Between the November vote and the December certification date, you still pay full ULA rates even if repeal wins. David: Congratulations on your yes vote. Here's your $600,000 tax bill. Jordyn: And we're mapping how this hits differently across the West Side: Brentwood Spec Band, Holmby Hills, Bel Air. Not a uniform story. David: The danger zone is a lot narrower than people think. Jordyn: We've got a full seller decision tree, too, and David and I... I do NOT agree on whether Sacramento deals before June twenty fifth. David: We do not. All right, let's get into it. The five point five million Brentwood Sprint is up first. (three) Jordyn: Okay, so get this: Brentwood, five-point-five million dollars; canyon views, pool, the whole thing, and on paper, gorgeous deal. But here is the number that reframes everything—two hundred twenty thousand dollars. David: That's not the asking price—that's the tax exposure depending on which side of June thirtieth you close. Jordyn: Exactly—the Los Angeles office of Finance confirmed it: after June thirtieth, the ULA surcharge kicks in at f at 5.4 million dollars. Right now it's 5.3 million, so on a 5.5 million dollar sale you're sitting squarely in the four percent zone either way. But agents with listings in that 5.3 to 5.4 million band, they have a brief window where a deal might slip under the old threshold before the reset. David: And that window closes in three weeks. Jordyn: Three weeks, David. David: Here's the thing, though. This is not just one deal. According to the Real Deal, the ULA- The LA threshold shifts to five point four million dollars on July first, and the upper tier moves to ten point nine million. That re prices the math on every listing in that band overnight. Jordyn: So, if your agent isn't already in escrow on a five point three million dollar Brentwood listing, I hope they like bad news. David: And Brentwood isn't exactly a neighborhood known for slow closings. ZIP code nine zero zero four nine: Brentwood, Bel Air, Pacific Palisades. According to the Real Deal, that cluster accounted for the largest share of ULA revenue collections. Jordyn: No surprise there, those are the addresses actually hitting the threshold. David: Right, so this deal isn't just a property story, it's a deadline story: June thirtieth is the cliff. Jordyn: Wait for it . . . and the cliff doesn't care how pretty your canyon views are. David: Not even a little. Jordyn: So here's the real question: this tax has been law since April twenty twenty three. Three, it's collected over a billion dollars, David: Wow. Jordyn: and people are still sprinting to beat a threshold adjustment. So what does that tell us about how ULA actually landed once it hit the market? So here's the question we ended on: three years, 1.2 billion dollars collected, what did it actually buy? David: Okay, so let's start with the revenue side, because the gap there is staggering. Proponents projected $600 million to $1.1 billion per year. The L.A. Controller revised that down to roughly $270 million annually. An actual first year take, two hundred fifteen million. According to Wikipedia's Measure ULA entry, pulling from Citi data, one point two billion dollars total over three years is less than what supporters said they'd collect in one year. Jordyn: So they promised up to one point one billion dollars per year, they got one point two billion over three years combined? David: Yeah, yeah, yeah, that's the math. Jordyn: OK, but here's the thing, David. If the city is in a housing crisis, and you're collecting hundreds of millions of dollars, isn't some revenue better than nothing? David: That's where the spending side gets uncomfortable. Of that $1.2 billion collected, only $120 million has actually been spent as of April 30, 2026. And an earlier report from the Westside Current found the city spent roughly 15 times more on administering ULA than on building housing. Jordyn: Wait, 15 times more on administration? Ten? David: Fifteen times. Jordyn: Wow. Cute but an unnecessary bureaucracy; that is genuinely the most LA thing I've ever heard. David: That's before we get to the construction side, because that's where this gets really messy. Jordyn: So here's where I actually push back a little, because yes, construction permits fell. The UCLA-RAND study put it at roughly nineteen hundred ten fewer apartment units per year, including about a hundred and sixty eight fewer affordable units annually. annually. That's a real number. David: It is. Jordyn: But Jordyn's argument, wait, I mean the counter-argument, is that interest rates spiked, construction costs spiked, developers everywhere pulled back. You can't pin all of that on one transfer tax. David: You can't pin all of it, but here's the thing, though. UCLA-RAND compared LA's permits to 87 surrounding suburbs inside the same county. Same interest rate environment, same construction costs. But those suburban saw steady or growing permit numbers. The city of LA saw overall construction down forty per cent, multifamily down twenty seven per cent, single family down forty five per cent. Speaker 3: Okay, that comparison is hard to argue with. David: And then there's the behavioral story: instead of selling and triggering the tax, Bel Air and Brentwood owners remodeled; renovation permits jumped forty six per cent. The inventory never came to market. Jordyn: So the policy designed to fund affordable housing tightened supply and kept expensive houses off the market. Plot twist! David: A $1.2 billion plot twist. Jordyn: And most of that money is sitting in an account. So the real question now is, what does $1.2 billion in mostly unspent revenue mean for the political fight coming in November? David: Right, because the Real Deal reported that Council Member Ysabel Jurado, chair of the ULA Ad Hoc... Ad hoc committee came out of the final committee meeting saying the city should not move forward with any ballot amendment right now. The reform path inside City Hall closed. Jordyn: Which is exactly why the Howard Jarvis Taxpayers Association went around City Hall entirely. David: Yep, and that's where this gets interesting heading into the next chapter. Jordyn: Now flip that on its head. We've got a $15 million Bird Streets View home, accepted offer, sitting in escrow right now. So, David, walk me through what actually happens from here. David: Okay, three dates. That's the whole decision tree. First, June 25th. That's the California election law withdrawal deadline. Under state law, a certified initiative can still be pulled from the ballot by its proponents before that date. Sacramento has done it before, trading ballot withdrawals for legislative concessions. CHAPTER two. Jordyn: And CalMatters covered the mechanics of this-the Legislature and the Governor have leaned on that withdrawal window in past cycles. The June twenty fifth window is real. David: Right, here's the thing, though: this time may be different. Jon Coupal at Howard Jarvis has said publicly, according to CalMatters, that his side cannot envision any kind of deal that would satisfy them enough to pull the measure. These guys want ULA gone, not trimmed. Jordyn: Gone, gone. David: So June twenty fifth passes, nothing happens. Second date. Date, July 1st. That's the threshold reset. Our $15 million Bird Streets seller, if they close before July 1st, they're off the board entirely. Current rates, done. Jordyn: What's the actual tax hit on a $15 million close right now? David: 5.5% on everything over $10 million, 4% on the band below. On $15 million, you're looking at roughly $775,000 in ULA alone. Jordyn: So they close in June, they know what they're paying, they wait past July 1st, and now the threshold resets and they're holding all the way to November 3rd, which is the vote. David: Binary outcome. The measure passes. ULA is capped at 0.05% statewide. On a $15 million deal, that's $7,500 instead of $77,500. Jordyn: So the wait is worth it if it passes. The gamble is real money. David: But here's what most sellers are missing. According to Reed Corporation's analysis... Thus, even if the measure passes November 3rd, it does not take effect overnight; the Secretary of State certifies results roughly five weeks later (around December 9th). Deals closing between November 3rd and that certification date still pay full ULA rates. Jordyn: Wait, wait, wait. So you vote yes, you win, and your closing on November 15th still gets hit with the old tax? David: That's the city's position; close of escrow controls when ULA accrues. Jordyn: Reed Corporation flags it specifically. The fix is protest language at closing-something like "paid under protest, pending repeal resolution," which preserves a refund claim under Revenue and Taxation Code Section 5097. But it has to be in the closing documents-your attorney has to actually know to put it there. So, here's the thing: for our Bird Streets seller the real question is-how confident are you that this thing passes? Because the Legislative Analyst's Office said And per CalMatters, the measure costs local governments a couple billion dollars a year statewide. That's a big ask for California voters. David: And more than 57 percent of likely voters opposed it when shown the ballot title, according to CalMatters polling. So no, this is not a guaranteed win for Howard Jarvis. Jordyn: So waiting for November to save $767,000 while the polls say you're probably going to lose is... A choice? David: It's a choice. Jordyn: The Sacramento wild card is the underreported part of this whole story. If a deal gets done before June 25th, the ballot measure disappears and none of the rest of this matters. David: Except Howard Jarvis is on record saying they're not dealing. Jordyn: Real talk: the one thing a seller above five point four million absolutely cannot do right now is nothing. Three dates, real money, a clock that does not. Not Pause. David: Map your clothes, talk to your closing attorney, and make sure they know what RTC 5097 means, because if they don't, that's a problem. Jordyn: And next, we're taking all of this street level, which neighborhoods are most exposed, where the bunching is already showing up in the data, and why Brentwood, between 5 and 8 million, is the most dangerous band on the west side right now. Okay, so let's zoom out from the three-day calendar and actually look at the map, because ULA does not hit every neighborhood the same way. David: Not even close. Jordyn: So here's the thing. Brentwood is where I'd focus first. The five million to eight million band there is brutal. You've got six bedrooms back home sitting at 7.5 million. That's a $300,000 ULA hit, 4% right off the top, and the buyer on the other end knows it. David: Right, but who's absorbing that? Because it's not clean. The seller discounts, the buyer still pays more than they would in Beverly Hills. It gets split in weird ways. Jordyn: Exactly, and that's the trap. Brentwood sellers can't price over the cliff without losing buyers to Santa Monica or Culver City or just unincorporated Bel Air. According to Real Deal data, Brentwood generated over $105 million in ULA revenue across its transactions. That's not a rounding error, David. That's the epicenter. David: Per square footage of affected inventory, Brentwood is carrying the most... most weight of any Westside neighborhood. Jordyn: Now David: I'll give you that. Jordyn: flip to the Bird Streets, a glass box, a $12 million, that's a $660,000 hit at 5.5%, significant, but those buyers are already in the conversation, they know the number before they schedule the showing. David: Right, psychology is different up there. Jordyn: Totally different. And then at the extreme end, 594 South Mapleton and Holmby Hills, 630 Nimes Road in Bel Air. Both closed at a hundred and ten million dollars in twenty twenty five according to the real deal. On a hundred and ten million dollar deal, ULA is about six million-nobody blinked. David: The buyer of a Spelling Manor is not losing sleep over six million dollars. Jordyn: No, Eric Schmidt is not calling his agent about the transfer tax. David: Probably not, but here's where I push back a little on your read. Jordyn: Go for it. David: Here's where I push back a little on your read. You're making it sound like ULA is killing deals uniformly. I don't buy that. Above $20 million, the tax is basically Speaker 3: Right. David: noise. Below $5.4 million, it doesn't apply at all after the reset. The damage is concentrated in... Jordyn: One band. David: $5.4 million to $15 million. Jordyn: That's it. That's the bread and butter of Westside volume, and per ReedCorp, on a $20 million Brentwood compound, ULA drops from $1.1 million to $10,000 if the repeal passes. That math is the entire seller psychology story in that band. David: And agents are already quoting two prices, a today number and an if repeal passes number that runs 3% to 4% higher. Buyers are asking for repeal contingent reductions. Deals are retrading on it right now. Jordyn: So the uncertainty itself is a transaction cost. David: The uncertainty is the tax at this point. Jordyn: That's the sharpest thing either of us has said today. David: File that one away. Jordyn: So if you had to name the single neighborhood where ULA has done the most damage per dollar of inventory on the market? David: Brentwood, not close. The $5 million to $8 million tear-down and spec cluster there is the most exposed band in the most exposed zip. That's where the tax bites hardest and sellers have the fewest places to hide. So, you've got three dates and three positions. Close before July 1, that's your certainty play. Wait for November 3, that's the probability trade. Or watch June 25th and bet Sacramento finds a deal. Jordyn: Follow the money on that last one. CalMatters reported that Democratic lawmakers would be happy to avoid a costly defensive campaign. They have every reason to deal before the withdrawal deadline. David: Okay, but real talk. Councilmember Jurado's committee just slammed the door on Speaker 4: - David: door on reform. The coalition defending ULA is dug in. I don't see Sacramento threading that needle in 16 days. Jordyn: I get it, but Sacramento has done this exactly before. A credible ballot threat clears a room faster than anything. They've got the June 25th window for a reason. David: I know, I know. But here's the thing: the PPIC poll has more than 57% of likely voters opposed. ...others opposing the initiative as titled: "If they're winning that polling, why deal? Jordyn: Wait, that cuts both ways: if the repeal is already losing in the polls, Howard Jarvis has less leverage at the bargaining table. David: Right, which is exactly why the ULA defenders won't move. They think they run out the clock and win November. Jordyn: Maybe, but if a seller is sitting on a ten million dollar listing in Brentwood right now, I'm not betting my client's five hundred thousand on Sacramento. or November outcome; close before July one. Certainty is the product. David: That's the only guaranteed exit from ULA for a twenty twenty six seller. Everything after July one is a probability trade. Jordyn: And one tactical note that almost nobody's catching: if you close between November three and the December ninth effective date, make sure your closing docs include explicit protest language. Preserve those refund rights in case the repeal survives a legal challenge. challenge and David: That's the line most sellers will miss. Jordyn: their attorneys. David: Three dates, three positions. Pick your risk. Okay, that is a wrap on one of our most stat heavy episodes yet. Jordyn: Mm-hmm. And honestly, the number that stuck with me: the spending gap. one point two billion collected, David: Yeah. Jordyn: only a hundred and twenty million out the door. That's the whole story right there. David: That's the thing about ULA: the math just doesn't work on paper-and now Howard Jarvis is on the November ballot because Speaker 3: What? David: City Hall closed the reform window. Jordyn: And if you're a seller in that five point four million to fifteen million dollar band, you've got three dates circled. circled. Miss any one of them and it costs you real money. David: So here's your one sentence takeaway. The policy fight is the market condition right now. Jordyn: File that away. David: New episodes drop every Tuesday. Follow Listing Price wherever you listen, and if you've got a deal or listing worth covering, send it our way. Jordyn: Thanks for being here, seriously. We'll see you next week.