Redlining Los Angeles: Sales Plunge Following Measure ULA’s Introduction

Redlining Los Angeles: Sales Plunge Following Measure ULA’s Introduction

OCTOBER 16, 2023

It’s been six months since Measure ULA went into effect, and one thing is already certain: sales volume is dramatically down, and many local developers are looking to do more work outside of Los Angeles because of the measure. 

Enacted on April 1, Measure ULA, which stands for United to House L.A., is a tax on all real estate sold at or above $5 million in the city of Los Angeles. The tax received 58% of voter support to pay for new homeless support, requiring sellers of properties valued at $5 million to $10 million to pay a 4% tax to the city and sellers of properties at or above $10 million to pay 5.5%.

“I think ULA was a real mistake and is materially impacting the ability of people to build new housing,” said Sean Burton, chief executive of Cityview, a multifamily investment management and development firm based in Century City.

Proponents of ULA dubbed it the “mansion tax,” arguing that it would essentially take from the rich and give to the poor, but the tax is much more complex than that and affects all types of real estate. It has impacted sales across all asset types, and commercial properties such as multifamily, industrial, office and retail have been hit hard.

“I don’t think voters understood what they were voting on,” Burton said. “Voters were told they were going to tax millionaires and billionaires on expensive mansions and take that money and use it to build more housing for the homeless. And in fact, that’s not at all what it does. That’s one aspect of it. But it’s a tax on any sort of real estate, including any sort of new housing, which has led to the redlining of Los Angeles with investors and developers.”

Some builders and developers are shunning Los Angeles altogether, because it’s no longer seen as an economically viable city to invest in, leading to staggering drops in sales. In the first quarter of this year, commercial real estate sales on properties valued over $5 million hit $2.4 billion. In quarter two, from when ULA went into effect, sales plunged to $260 million. And in quarter three, sales increased ever so slightly, reaching $300 million, according to data from Colliers.

“The transaction volume has fallen off,”  said Sean Fulp, vice chair and head of office capital markets at Colliers. “We’re operating at a transaction volume that’s roughly 15% to 20%, optimistically speaking, to where it was a year ago.”

And while it’s hard to pinpoint exactly how much of this dramatic drop can be traced back to ULA due to multiple factors affecting the current market climate – such as higher interest rates plus the work-from-home trend, which is hurting the office market – experts agree that the tax has played a pivotal role in the decrease in sales volumes. 

Asset breakdown

Sales are down across all asset types. In quarters two and three of this year, multifamily properties priced above $5 million sold for a total of $320 million. That’s far below the combined $2 billion sold in those same quarters last year, according to data from Colliers.

In the office market, in quarters two and three of last year, the combined total transaction volume was $199 million. In quarters two and three of this year, the combined total was $82 million, according to Colliers.

Industrial properties sold for a combined $594 million in quarters two and three of last year. This year, sales were $37 million. And retail properties also suffered, generating only $49 million this year compared to $496 million across the two quarters last year, according to the same Colliers data.

“It’s lost revenue,” Shlomi Ronen, founder and managing principal of Dekel Capital, a Century City-based investment real estate firm, said. “You’ve got billions of dollars of transactions that are not happening as a result of this tax. There’s a multiplier effect.”

Another asset type impacted by Measure ULA is hotels. During the third quarter of last year, Los Angeles County saw 13 hotel sales priced above $5 million. In that same period this year, only two hotel sales above $5 million took place – one in Glendale and one in Lennox. No hotel sales subject to ULA were recorded during the third quarter, according to Atlas Hospitality Group

Likewise, in the second quarter of last year, Los Angeles County had 20 hotel sales priced above $5 million. In quarter two of this year, the only hotel sale the city of L.A. had above $5 million was the $760 million foreclosure sale of the Fairmont Century Plaza, a 394-room luxury hotel located in Century City and acquired by the Reuben Brothers.

“If you foreclose on a loan, and that loan is over $5 million, you pay the ULA tax,” said Alan Reay, president of Atlas Hospitality Group, who’s been tracking California hotel sales for more than 20 years. “No one’s really bringing this up, but that’s a big issue for lenders making loans in Los Angeles right now.”

Reay said lenders are rethinking the choice to make loans as a result. In the case of the Fairmont Century Plaza, 5.5% of $760 million is $41.8 million.

“ULA is a tax that you pay even if you lose money on a project,” said Burton. “Usually, you pay taxes on your profits.”

Measure ULA is nonrestrictive, imposed even on the sales of properties part of a 1031 exchange, a tax break that allows sellers of properties to reinvest their proceeds into a replacement property with no immediate tax consequences.

According to Reay, many hotel owners will likely delay selling, or decide against selling altogether and switch to leasing because of it.

“It’s basically really shut down the market,” Reay said.

‘Completely misguided’

“The concept of taking care of homelessness is near and dear to me,” said David Prior, senior managing principal at The Klabin Co., a Torrance-based commercial real estate firm specializing in industrial assets.

Prior’s brother died in November after being homeless for 30 years on the streets of Venice.

“(Homelessness is) a pervasive issue,” Prior said. “(However) I think the intent is completely misguided.”

Intentions aside, with transactions pretty much at a standstill, the city has not been generating nearly the revenue it sought to achieve. 

In the first four months since the tax was enacted, Measure ULA raised more than $55 million, according to city officials. That’s only 25% of that period’s projected revenue needed to reach the $672 million goal within the tax’s first year.

In August, the City Council approved a plan for spending the first $150 million in Measure ULA funds, but since the tax had only raised $55 million, the city pulled from other pools of income in order to meet its promised deliverables.

However, regardless of where the money came from, only a third of that budget will actually go toward the production of more affordable housing, and none will help subsidize the cost to encourage more production.

The remaining two thirds will go toward programs including an eviction defense and prevention program, a short-term emergency assistance program for low-income tenants, a tenant outreach and education program, a tenant harassment protection program and rent subsidiary programs for low-income seniors and people with disabilities.

“What we need to do is to spend every dollar we have on building more housing for people so we can bring costs down,” Burton said.

Burton is currently teaming up with leaders in the business, real estate, labor and housing advocacy communities to come up with a “fix ULA” proposal to amend the tax so that it doesn’t continue to chill the production of affordable housing.

“The government policy with homelessness is mercurial,” Prior said. “It’s very difficult. Believe me, I lived with it for a long time. But the solution isn’t to tax people and spend more money. I don’t know what the answer is. But this is not it.”

And due to the basics of supply and demand, when transaction volume falls, values fall as well. And values will continue to fall until investors feel that there is an asset appropriately priced. This is a form of capitulation – when values fall, the property tax base is reduced in return, which means less money for the city and county, which impacts services and jobs.

“While the city’s raising money in one place, they’re losing it in another,” Fulp said.

Since April, multiple lawsuits have been filed challenging Measure ULA, including a combined dispute from the Howard Jarvis Taxpayers Association and the Apartment Association of Greater Los Angeles.

“If this unlawful tax is allowed to stand, it will be the last straw that will cause property owners to invest elsewhere and never come back to Los Angeles,” Dan Yukelson, executive director of the apartment association, said in a statement at the time of the suit.

Looking ahead

While it’s only been two quarters since ULA took effect, many real estate experts agree that sales aren’t going to pick up anytime soon.

“Activity will stay muted as long as ULA remains in effect,” Fulp predicts.

And that seems to be the case, as many top-level investors and property managers now say they are looking to invest in markets outside of Los Angeles.

“Any time you change policy, that brings uncertainty,” Fulp said. “And investment markets do not like uncertainty.”

Cityview, for example, is finishing up developments on properties it purchased prior to April 1, but is not underwriting any new deals within the city of Los Angeles.

Instead, the firm is looking to invest in new areas, such as Santa Monica, Gardena, Culver City, Pasadena and Burbank. Although all located in Los Angeles County, those cities fall outside of the city of Los Angeles and therefore are not subject to the tax. He said Cityview is also looking to expand in San Diego, Orange County and Denver.

“That’s not by choice,” Burton said. “We don’t want to not be doing L.A. We’re believers in L.A. We started our business here, raised our families here. We want to be here, but ULA has made it impossible to build new market-rate housing in the city.”

Paul Daneshrad, founder and chief executive of Beverly Hills-based real estate investment company StarPoint Properties LLC, said his firm is transitioning to expand out of Los Angeles. StarPoint’s current portfolio is about 40% Los Angeles and 60% elsewhere, but Daneshrad said the company just changed its investment parameters with a new goal to bring those numbers down to only 10% to 15% due to L.A.’s tight regulations, such as Measure ULA.

“Nothing vis-a-vis ULA is going to change until one of several things happens first,” Michael Wiener, tax partner at Century City-based law firm Greenberg Glusker LLP, who specializes in real estate tax issues, said. “First, if the lawsuits challenging it are successful and obviously eliminate it, or also if the city issues regulations, which they’re supposed to do and have not yet.” 

If ULA remains, more local developers and real estate owners may do the same, rethinking doing business in Los Angeles and looking elsewhere.

“I think you’re going to find, in the future, there’s going to be a lot of reconsideration of doing any sort of development of new buildings for sale,” Prior said. “And that’s kind of the lifeblood of our market. It’s a time a lot of people have never been through.”

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Sarah Hunt

Senior Associate, Business Development & Capital Relations

Ms. Hunt joined Cityview in 2021 and is a Senior Associate on the Business Development & Capital Relations team.  She is primarily responsible for relationship management, investor communications, and marketing collateral.  Additionally, she works closely with internal functional teams on due diligence efforts and supports investor reporting and special projects.  She is also a member of Cityview’s Sustainability Committee focused on communication of ESG initiatives to investors.

Ms. Hunt has over six years of real estate investment, capital formation, and investor relations experience.  Prior to joining Cityview, she was an Associate with Chicago-based Magnolia Capital.  During her tenure, she worked on equity capital raises for numerous real estate investment vehicles.  Prior to Magnolia, Ms. Hunt was a Financial Analyst with LaSalle Investment Management where she oversaw the financial performance of assets with over $1 billion in value.

Ms. Hunt received her Bachelor of Business Administration degree in Finance, Investment, and Banking from the University of Wisconsin-Madison.

Ramtin Esfandiari

Director, Acquisitions

Ramtin Esfandiari joined Cityview in 2018 and is responsible for managing acquisitions, including sourcing, underwriting and closing multifamily development deals. Prior to joining Cityview, Ramtin was on the Acquisitions team at The Bascom Group where he underwrote over $9 billion in multifamily acquisitions across the U.S. and supported all aspects of the acquisition process. Ramtin holds a Bachelor’s Degree in Business Economics from the University of California, Irvine, and is an active member of Urban Land Institute.

Jonathan Anderson


Jonathan Anderson is the Controller of Cityview and provides leadership and oversight over the finance, accounting, and shared services departments.  Prior to joining the Cityview team, Jonathan worked at CIM Group where he held several finance and accounting roles during his tenure, most recently as head of private fund reporting and prior to that as director of SEC reporting for one of CIM Group’s publicly traded REITs.  Jonathan began his career in Ernst & Young’s assurance practice where he served both public and private clients in the real estate and asset management industries.  Jonathan graduated from the University of Southern California with both a bachelor’s degree in accounting and a bachelor’s degree in business administration with an emphasis in real estate finance.

Tina O’ Brien

HR Director

Tina O’Brien, HR Director, is a senior national and state-certified HR Professional (SPHR, SHRM-SCP, PHRca), managing the HR team overseeing all aspects of Human Resources for both Cityview and its affiliate, Westhome. Her experience spans the spectrum of the HR field, including recruitment, employee relations, performance management, benefits, compliance and employee development. She joined Cityview in summer 2021 from a telecom technology firm in Van Nuys, and previously worked for a private real estate investment and property management company in Beverly Hills. Tina is an LA native and she’s committed to helping grow our vibrant, healthy corporate culture here at Cityview.

Noah Watts-Russell

Director Asset Management
Noah Watts-Russell is Director, Asset Management of Cityview. As Director of Asset Management, he oversees Cityview’s value-add portfolio and is responsible for establishing and driving the portfolio business plans to maximize performance and value. Prior to joining Cityview, Noah was an Associate in the Real Estate division at The Blackstone Group where he oversaw over $15bn in multifamily real estate (>70,000 units, covering market rate, affordable and rent-controlled) and worked on over $2bn in total sales and $1bn in refinancing. Prior to Blackstone, Noah managed the FP&A team at LivCor, Blackstone’s multifamily asset management company. Noah holds a Bachelor’s degree in Finance and Economics from Washington University in St. Louis.

Denise Katz

Director Asset Management

Denise Katz manages Cityview’s core and development assets across multiple investment vehicles and is responsible for maximizing the operational and financial performance of the assets.  Denise has over twelve years of experience in real estate. Prior to joining Cityview, Denise was Regional Vice President at CIM Group of a $2.4 billion portfolio in the Western US and Latin American markets. During her time at CIM, she managed end-to-end transitions of development projects, acquisitions, and dispositions of office, multifamily, retail, parking, condominium, and mixed-use projects. She holds a double major Bachelor of Arts degree in International Studies and Psychology from Wilkes University in Wilkes-Barre, PA.

Steve Roberts

Director, Development and Construction
Steve Roberts is responsible for the development of several of Cityview’s ground-up multi-family assets, including due diligence, design, entitlement, permitting, construction, and market delivery. Prior to joining Cityview, Steve managed several nationally award-winning projects as Vice President of Development for Community Dynamics, a Santa Monica based developer of residential and mixed-use communities. Steve has built his career on creating exceptional communities that deliver high-quality housing to residents, first-rate design for neighbors and municipalities, as well as strong financial returns to investors. Steve holds a BA in Urban Studies and Planning from UCSD and earned an MBA and Master of Real Estate Development from the University of Southern California.

Anh Le

Director, Development

After 8 years in the construction industry managed complex multi-use development projects, Anh Le joined Cityview in 2018 as Director of Development. Le manages ground-up developments in Northern and Southern California and leads consultant teams through entitlement, design, permitting, budgeting, contracting, construction management and project turnover. She works closely with designers, neighborhood groups and Cityview’s in-house Asset Management team to deliver best-in-class multifamily projects. Prior to Cityview, Le worked as a project engineer and project manager at Cobalt Construction. Le holds a Bachelor’s of Science in Civil Engineering from the University of California, Irvine.

Kyle Naye

Senior Director, Acquisitions

Kyle Naye is Senior Director, Acquisitions of Cityview.  As Senior Director of Acquisitions, he is responsible for managing acquisitions, including sourcing, underwriting, closing and developing comprehensive business plans for investors.  Naye primarily focuses on non-California markets across the Western U.S., including Seattle, Portland, Denver, Phoenix, Salt Lake City, Dallas, and Austin.  In his role, Naye works closely with the Cityview team to manage and expand strategic acquisitions across the firm’s vertically integrated platform.

Prior to joining Cityview, Naye was a vice president of originations at PGIM Real Estate, where he provided transactions and underwriting oversight for core-plus and high-yield debt vehicles. He also held a prior role at PGIM managing the underwriting, investment committee preparation and closing of $992 million in multifamily, retail and office assets across the Bay Area and Pacific Northwest. At earlier stages of his career, Naye was a senior associate of acquisitions at Clarion Partners, senior real estate analyst at Northmarq and an officer in the United States Navy.

Zory Grigoryan

Director, Development

As Director of Development, Zory Grigoryan is responsible for the full cycle development of several of Cityview’s projects, which includes managing the due diligence, underwriting, entitlement, design engineering, construction processes and turnover to asset management. Prior to joining Cityview, Grigoryan worked for Oakmont Capital as a Project Manager overseeing the development and construction of several multifamily projects. Prior to that, he worked at Cobalt Construction as a Project Manager on the construction of numerous mixed use and multifamily projects. During his career, Grigoryan has been responsible for the development, preconstruction and construction of over 1,500 units.

Grigoryan holds a Bachelor’s of Science Degree in Construction Management from the California State University of Northridge, where he was the top ranked graduate of his year. During his time at Cobalt Construction, Grigoryan was also selected as distinguished alumni by the CSUN department faculty and appointed as ambassador for alumni recruitment by CSUN construction management department’s board of governors committee.

Chris Brown

Director, Capital Relations

Chris Brown is responsible for capital raising and investor relations at Cityview. Chris has over seven years of real estate investment and capital raising experience. Prior to joining Cityview, he was a member of the Fund Advisory team at JLL working on equity capital raises for private real estate investment vehicles. Prior to JLL, Chris worked on the Portfolio Management team at Clarion Partners and the Asset Management team at LaSalle Investment Management. Chris graduated from Florida State University with a Bachelor’s Degrees in Finance and Real Estate. He is a general securities representative.

Dana Gomez-Gayne

Vice President and Associate General Counsel

Dana Gomez-Gayne manages the legal aspects of all project-related matters, including acquisition, development, management and disposition, and advises Cityview on corporate formation and maintenance, insurance, risk management and other legal matters. She was previously an Associate at O’Melveny & Myers LLP and Manatt, Phelps & Phillips, LLP where she represented a variety of clients in real estate, project development and finance transactions. Gomez-Gayne also has a background in fundraising development and worked at Teach For America raising philanthropic funds from regional and national corporations and foundations. She is a graduate of Pomona College and Pepperdine University School of Law.

Rob Lester

Managing Director, Business Development & Capital Relations
Rob Lester is responsible for business development and capital formation efforts for the Firm’s investment platforms, developing strategic growth initiatives, and creating long-term relationships with investors and partners. He has nearly 25 years of investment banking and private capital formation experience. Prior to joining Cityview, he was Managing Director with Macquarie Capital, and a Managing Principal with Blackstone. ​

Con Howe

Managing Director

Con Howe leads Cityview’s partnerships to finance, assemble and entitle land for development in the greater Los Angeles area. With over 40 years of experience in planning, entitlements and development, he assists all Cityview funds with acquisitions and development strategies. Prior to coming to Cityview he was the Director of Planning for the City of Los Angeles responsible for the Adaptive Reuse Ordinance and zoning to encourage infill housing. Previously he was the Executive Director of the New York City Planning Department.

Shane Robinson


Shane Robinson is responsible for managing all aspects of Cityview’s stabilized, value add and new development assets. With more than 22 years of experience managing multifamily assets, he is a seasoned real estate professional experienced in a range of investment strategies that drive growth and efficiency for investors.

Prior to this role, Shane held pivotal positions at various organizations in the real estate industry. As Vice President of Property Management at Westhome, Robinson played a vital role in implementing the operational infrastructure that facilitated market expansion.

During his tenure at Sunrise Management, his leadership established and solidified the company’s operational foothold in new markets, contributing to the growth and success of the firm. His early asset management career was at GHP Management, where he specialized in lease-ups and effectively managed a substantial core portfolio of over 5,000 units.

Melissa B. Delgado

VP, Asset Management
Melissa Delgado is responsible for overseeing Cityview’s asset management and portfolio operations. Prior to joining Cityview, Melissa was a Senior Director at TruAmerica Multifamily LLC where she was responsible for achieving the investment objectives of an $800 million portfolio. Earlier in her career, Melissa was an asset manager for Kennedy Wilson’s Southern California portfolio. Prior to that, she was a Vice President and Head of Marketing at Kepler Capital Markets, an investment bank in New York. ​

Devang Shah

Managing Director, Acquisitions

Devang Shah is co-head of Cityview’s acquisitions activities on the West Coast. He has 25 years of experience in real estate investment, development, design, construction and asset management. Previously, Devang was the principal of Marketcents Inc., an independent project management firm, serving as an owner’s representative to investment firms, builders and developers. Prior to that, he worked was Vice-President at RCLCo, LLC, a national independent real estate consulting firm. ​

Adam Perry

Senior Vice President, Development and Construction

Adam Perry oversees all aspects of the commercial real estate development process from acquisition due diligence and entitlement processing through design budgeting, contracting, construction management, closeout and turnover. Prior to joining Cityview, Adam worked at CIM group as an Associate Vice President of Development overseeing ground up retail, office and mixed-use developments. ​

Adam holds a BA Degree in Political Science and History from UCLA and an MBA from the UCLA Anderson School of Management.

Matthew Falley

General Counsel & Chief Compliance Officer
Matt Falley oversees and directs the company’s legal affairs and is the firm’s Chief Compliance Officer. Matt was previously a partner at Greenberg Glusker Fields Claman & Machtinger LLP, where he represented numerous clients in the real estate industry, including Cityview. Matt holds a B.A. from the University of California, Santa Barbara and a JD from the University of California, Berkeley School of Law (Boalt Hall), where he was a member of “California Law Review” and Order of the Coif.​

Tony Cardoza

Managing Director, Acquisitions
Tony Cardoza is responsible for Cityview’s acquisition activities throughout the West Coast. He has 21 years of experience in real estate investment and management. Previously, Tony ran the investment group for Real Estate Capital Partners in the Western U.S., which developed and acquired over 5,000 multifamily units. Prior to that, he worked for Prometheus Real Estate Group in a land and multifamily acquisitions role on the West Coast. Tony holds a B.A. in Economics from Middlebury College and an MBA from the Haas School of Business at UC Berkeley.​

Jennifer Halvas

Managing Director, Investor Relations
Jennifer Halvas leads the firm’s investor relations team, where she is responsible for maintaining relationships with the investor community, bolstering infrastructure for new and existing investors and helping to develop investment strategies and initiatives. She has been instrumental in securing capital needs for several Cityview funds across a broad base of institutional investors, insurance companies, foundations and endowments, family offices and high-net-worth investors. A 12-year veteran of Cityview, she uses her deep institutional knowledge to create value for investors and the communities in which Cityview works.
She was previously at O’Melveny & Myers LLP, where she represented a variety of clients in real estate, project development and finance transactions. Jennifer holds a B.A. with honors from the University of Southern California and a JD from Vanderbilt Law School.

Damian Gancman

Chief Operating Officer and Chief Financial Officer

Damian Gancman oversees the operations of Cityview and its investments while supporting the strategic growth of its finance, acquisition, asset management and property management functions. An 18-year veteran of the firm, Damian is also a partner at Cityview and a member of its investment committee. As CFO, he helped build out Cityview’s best-in-class finance department, including the implementation of strategic process, accounting, reporting and technology improvements that enhance the investor experience.

In addition to his role at Cityview, Damian is a guest lecturer for the University of Southern California’s Master of Real Estate Development program and is a key contributor to the Cityview Leadership Academy. Damian earned a master’s degree in real estate development from the University of Southern California and a dual bachelor’s degree in business administration and psychology from the University of California, Berkeley.

Sean Burton

Chief Executive Officer

Sean Burton has been with Cityview since 2003. Prior to joining Cityview, Sean was vice president of corporate business development and strategy at Warner Bros. Before that, he was an attorney in the real estate and corporate groups at O’Melveny & Myers, LLP and also served in the White House during the Clinton Administration. In 2022, Burton was appointed by President Biden and confirmed by the U.S. Senate as the federal nominee on the Metropolitan Washington Airports Authority Board of Directors, which oversees Washington Dulles and Reagan National airports. He also serves as co-chair of the Los Angeles Coalition, a coalition of business leaders for the economy and jobs in LA. From 2013 to 2021, Sean served as President of the Board of Airport Commissioners which oversees the LAX and Van Nuys airports. Sean holds a B.A. from the University of California, Irvine and a JD from New York University School of Law.