September 4, 2025
LOS ANGELES, CA – “Major Research Flaws Undermine Authors’ Bold Claims: Unpacking the Debate on Measure ULA,” a report released today by researchers and scholars from UCLA, USC, Occidental College and Public Counsel shows that a widely circulated report claiming that Measure ULA reduces multifamily housing development used flawed analysis, ignored the positive benefits of the housing programs it funds, and didn’t accurately describe Los Angeles’s real estate market.
Since going into effect in April 2023, city dashboards show that Measure ULA has supported development of hundreds of units of new affordable housing, and provided rental assistance and income support to more than 10,000 households. It has also educated almost 100,000 tenants on their rights and accelerated 10,000 construction jobs. Its transfer tax on property sales over $5 million has generated over $450 million over the past year alone and more than $830 million in total.
In April 2025, the UCLA Lewis Center for Regional Policy Studies released two reports claiming that the Measure ULA tax is hurting the Los Angeles real estate market. This report scrutinizes one of those papers, “Taxing Tomorrow: Measure ULA’s Impact on Multifamily Housing Production and Potential Reforms,” by Jason Ward and Shane Phillips, finding that it relies on flawed data and questionable methodology to draw broad, premature conclusions and call for massive changes to Measure ULA.
“To understand development, you have to watch what developers do, not what they say,” said Joan Ling (ret.) of the UCLA Urban Planning Department and the Ziman Center for Real Estate. “Developers say they won’t work in LA because of ULA, but then why do we see strong leading indicators of development activity since Measure ULA was passed, evidenced by rising entitlements and steadily growing revenue? The numbers do not support the narrative in the Lewis Center report.”
Contrary to conventional wisdom, multiple signs support strong confidence in the Los Angeles real estate market. Transactions subject to the ULA tax and the resulting revenue have been steadily increasing quarter-over-quarter (with a dip accounted for by the January 2025 fires). At the same time, the LA City Planning Department has reported that the number of housing units that have received entitlements increased 52% from 2022 to 2024, and Los Angeles’s new Citywide Housing Incentive Program (CHIP) — passed as part of the City’s rezoning plan in February 2025 — has already resulted in pre-applications for 17,029 units in under 6 months of the program, suggesting that many developers had been waiting until after the new development incentives were in place before beginning their projects.
“The Ward-Phillips report compared two very short windows pre- and post- Measure ULA,” added Ling. “Before Measure ULA went into effect we had extremely low interest rates and record-high home prices. After, we saw high interest rates, capitalization rates, construction costs and insurance costs. All of this unfolded during a global pandemic and its attendant uncertainties. You simply can’t draw useful conclusions from comparisons across that time period.”
Additionally, the “post” period analyzed in the Ward-Phillips report is one full year shorter than the “pre” period. The short time periods of both make them a poor basis for predictions about the future.
“There’s a story of doom and gloom about real estate in L.A. that developers and observers have been telling each other that doesn’t stand up to reality—and should in no way be used to justify tax exemptions that would cost Los Angeles tens of millions of dollars in affordable housing revenue,” said Peter Dreier (ret.), Urban and Environmental Policy Institute, Occidental College. “We want legislators to understand that the work they’ve been shown should not be used to justify making policy.”
Among the significant methodological issues in the Ward-Phillips report is its use of permit data and failure to control for confounding variables.
“The authors overstate the strength of their findings and downplay flaws in their methodology,” said Greg Bonett, Public Counsel, Community Development Project. “For example, the report’s central estimate of reduced multifamily housing production appears to be based on a misapplication of a statistical analysis with a small sample size of only 27 projects, a large margin of error, and no controls to account for confounding factors such as changing interest rates or construction costs.”
“We’re eager to see continued study of Measure ULA’s direct effects, such as protecting renters, building affordable housing, and creating jobs, as well as its indirect economic effects, such as those discussed in these reports,” said Bonett. “But we’re going to need more data and more rigorous methods.”
The complete list of authors comprises Greg Bonett, Public Counsel; Jan Breidenbach (ret.), USC; Scott Cummings, UCLA; Peter Dreier, Occidental College; Regina Freer, Occidental College; Joan Ling (ret.), UCLA; Deepika Sharma, USC; Chris Tilly, UCLA; and Madeline Wander, Occidental College.
KEY TAKEAWAYS
- ULA Working as Intended: Since its voter approval in November 2022 and implementation in April 2023, Measure ULA has raised more than $830 million in revenue and has helped to create affordable housing and jobs and keep tenants housed, as intended.
- Reports Not Rigorously Peer-Reviewed: Both reports by the UCLA Lewis Center make bold claims around Measure ULA causing certain market behavior, but neither report, nor any portion of their findings, has been published in a peer-reviewed academic journal, which would better ensure quality, accuracy, and validity.
- Flawed Methodology, Data, and Conclusions: The methodological flaws and limited, imprecise, and misused data found in the Ward and Phillips report raise significant questions about the report’s claim of a “robust causal linkage” between Measure ULA and multifamily housing production.
- Unduly Short and Abnormal Time Frames: In their effort to release findings quickly, Ward and Phillips examine unduly short pre- and especially post-ULA time periods that are marked by some of the most unusual real estate market dynamics in recent history (e.g. global pandemic, extremely low interest rates, and record-high home prices in the “pre” period; and high interest rates, capitalization rates, construction costs, and insurance costs in the “post” period), making them a poor basis for predictions about the future. The “post” period analyzed is one full year shorter than the “pre” period, indicating premature conclusions at best.
- Weak Indirect Indicator of Development Activity: Because of the unduly short time frames analyzed, the Ward-Phillips report uses sales of multifamily-zoned parcels as a proxy for development activity, a weak and imprecise indicator. In reality, many parcel sales do not lead to multifamily housing development, and not all development projects are precipitated by a sale; some are developed by long-term owners. Over a longer time frame, a proxy is not necessary because direct data will be available in the form of building permits.
- Method’s Strict Assumptions Are Not Satisfied: The report’s “difference-in-differences” (DiD) model fails to meet the strict requirements for that method, including the “no spillover” test, which requires no spillovers between the treatment group (City of LA) and the control group (“rest of LA County,” in this case only 10 jurisdictions out of 88 that differ significantly from the City of LA in terms of market and regulatory conditions). In fact, recent scholarship, including a re-analysis of published studies, suggests that the DiD technique is often misapplied and can result in misleading conclusions.
- Analysis Misuses Permit Data and Fails to Control for Confounding Variables: The Ward-Phillips report uses the reduced average size of projects permitted on parcels sold in the 10 months after Measure ULA’s implementation to estimate the impact on housing production, without accounting for the increased frequency of projects, ignoring the fact that the report’s dataset includes more projects per quarter after ULA went into effect. By not accounting for the increased frequency of permitted projects and the total number of units permitted across all projects, the report dramatically overestimates the impact of ULA. The report’s analysis of building permit data also does not control for any potentially confounding variables that could impact permit trends.
- Small Sample, Large Margin of Error: The report’s central claim that Measure ULA is reducing multifamily housing production is based on a regression analysis with a large margin of error and a small sample size of only 27 projects. With this small sample size, the model’s estimates can easily be influenced by a few abnormally large or abnormally small projects, and reliable conclusions cannot be drawn from this data.
- Likely Bias from Excluding ED1 Projects: The report excludes all projects that use the streamlining authorized by the Mayor’s Executive Directive 1 (ED1), aimed at speeding affordable housing development. By excluding all ED1 projects, the authors artificially reduce the number of units and permits counted in the post-ULA period (e.g. some projects that received ED1 streamlining would likely have moved forward without ED1 but were excluded from the analysis nonetheless). Over 28,000 units of housing were approved under ED1 between December 2022 and June 2025.
- Overestimated Market Production, Underestimated ULA Production of Affordable Housing: The Ward and Phillips report uses inaccurate and unsupported assumptions about affordable housing production, claiming without evidence that 80% of all units in larger, non-publicly-subsidized (privately-financed) multifamily projects are in mixed-income projects, thereby potentially overestimating the prevalence of mixed-income housing and the market production of affordable housing. At the same time, the report underestimates the affordable housing production made possible by ULA funds by assuming that ULA must fund 60% of total affordable development costs. Typically, City funds are capped at 20-30% of total project costs, which would mean $29 million of ULA funds would produce at least 116 units, about 65% more than the report estimates.
- What a Rigorous Analysis Should Look Like:
- A longer time frame of data analysis on both sides of Measure ULA’s implementation date, with building permit data as the best indicator of development activity
- Comparisons of the City of Los Angeles to jurisdictions and geographies (even submarkets) with similar housing conditions, including developability and market strength
- Statistical best practices and modeling, including robustness analysis testing assumptions Accurate assumptions for affordable housing production
- Transparency about the limitations of the research and conclusions, especially around claiming causal linkages between a policy intervention and market behavior