How did an ‘implausible’ claim about jobs created by LA’s ‘mansion tax’ get cited by watchdogs?

Three years ago, Los Angeles voters approved a “mansion tax” that funds the construction of affordable housing. Supporters of the tax pitched it as a way to tackle the city’s affordability problems while simultaneously creating well-paying construction jobs.

So, how many jobs have been created so far? One eye-popping estimate cited by the tax’s oversight body has come under heavy criticism from local economists.

The estimate was included in an April news release from the committee, but it wasn’t immediately clear that the number was controversial. The celebratory post said the tax — officially known as Measure ULA — had “built 800 new affordable homes” and “created 10,000 union construction jobs” in its first two years.

“It was highly implausible,” said Michael Manville, a professor of urban planning at UCLA. “At the time they were making that claim, very little construction was actually happening as a result of Measure ULA. The money just wasn't flowing yet.”

Mansion tax advocates later dialed back their messaging. The tax hadn’t yet created 800 apartments or 10,000 jobs, they said, but it had “accelerated” their creation.

By then, the numbers had taken on a life of their own, spreading beyond advocacy circles into official government communications. The accuracy of these numbers matter, critics say, because they raise questions about oversight at a time when efforts to reform or even repeal the measure are ongoing.

Mansion tax critics raise oversight questions

In addition to being cited by ULA Citizen Oversight Committee, the government body tasked with auditing the tax’s revenues and expenditures, the number was later cited by a team of academic researchers who defended the tax against critiques by other economists.

Through a public records request, LAist tracked down the origin of the 10,000 jobs claim. We found that it started as a caveat-laden internal city analysis before it turned into a concrete figure circulated widely by researchers and watchdogs.

Manville, who co-authored a recent study that concluded the tax had sharply reduced sales of high-end real estate, said the dissemination of this jobs number raises questions about how carefully Measure ULA is being overseen.

“What it suggests to you is the possibility that the people at work sort of promoting and, in theory, even regulating this measure aren't that interested in the details, aren't that interested in the rigor and are more interested in just promoting a particular storyline,” Manville said.

Sharon Sandow, a spokesperson for the L.A. Housing Department, said the department “stands by the estimate of 10,000 potential construction jobs and career opportunities.”

She continued: “It is an estimate, and not a guarantee of jobs that currently exist.”

Backstory of the mansion tax 

Measure ULA took effect in April 2023 after voters approved it the previous November. Though it’s been dubbed the “mansion tax,” it applies to all kinds of real estate, including new apartment buildings.

The tax was set at 4% for property sales above $5 million, and 5.5% for sales above $10 million.

The city uses Measure ULA to fund a variety of housing affordability programs. The tax delivers rent relief to struggling tenants, pays for eviction defense for those at risk of homelessness, and funds the city’s largest-ever pot of money for low-income housing development.

But economists say those benefits come at a steep cost: the loss of much-needed new housing. Developers looking to build in Southern California can dodge the tax by simply taking their projects outside city limits, where it doesn’t apply.

Los Angeles is far behind on producing enough new housing to meet state goals and reverse its affordability issues, experts say. Many factors contribute to the city’s construction shortage, but some researchers point to the mansion tax as a key driver of depressed development.

One study from researchers at RAND and UCLA concluded that the city would have more affordable housing units on balance if the tax did not apply to new apartment buildings.

Tax backers stand by jobs estimate 

City officials and some researchers defended their use of the 10,000 jobs figure, saying it is an early estimate informed by previous city-funded housing efforts.

Greg Bonett, an attorney with Public Counsel and a co-author of the study that cited the jobs figure, said the researchers plan to add more context to a footnote in their paper.

“We intend to add a little bit more information there about how that figure was based on the city's analysis of certified payroll data,” Bonett said. “It was important to name that the employment benefits are a meaningful benefit from the measure, in addition to the many other benefits.”

LAist filed a California Public Records Act request for internal city communications regarding the jobs estimate. The request unearthed an email from the city employee behind that payroll data analysis. He said the 10,000 jobs estimate for Measure ULA “misrepresented” his conclusions.

Zerita Jones, chair of the Measure ULA Citizen Oversight Committee, told LAist in a brief phone call that she didn’t know how the number ended up on the committee’s website.

“I’m not involved in screening what goes on the website,” Jones said.

She said once ULA-funded construction projects are completed, she will ask for reports about how many jobs were ultimately created.

“Because the people need to know,” Jones said.

Backstory of the jobs estimate

The jobs estimate dates back to March 4, 2024, when Housing Department staffer Greg Good emailed a colleague in the city’s Bureau of Contract Administration.

Good wanted a job-creation estimate for Measure ULA to relay to the union workforce represented by the influential LA/OC Building and Construction Trades Council.

“This is important to everyone involved — including the Trades — and we're struggling with it,” Good wrote in the email.

In response, Good received a detailed analysis of a previous city fund — Measure HHH — approved by voters in 2016 to build homeless housing. The person who produced the analysis, Ian Monteilh with the city’s Bureau of Contract Administration, had said for every $1 million spent on total development costs in HHH projects, 34 construction jobs were created.

But Monteilh added a big disclaimer, warning against using his analysis to say exactly how many jobs Measure ULA would produce.

“Do not use language that states a specific number of jobs will be created,” Monteilh wrote in the email.

In another email he noted that such projects “don't necessarily create UNION jobs.”

But when the tax’s two-year anniversary rolled around, those caveats were gone. The Citizen Oversight Committee had used Monteilh’s central statistic — 34 jobs created for every $1 million spent on development — as the basis for their conclusion that the “mansion tax” had created 10,000 union construction jobs.

‘It just doesn’t pass the smell test’

Tax supporters told LAist they wanted to be conservative, so they rounded down Monteilh’s number to 22 jobs per $1 million. Applying that figure to the $547 million in total development costs for projects partially subsidized by Measure ULA, they arrived at a grand total of 12,034 jobs.

Advocates say they again rounded that down to an even 10,000 jobs.

When that number came out in an April news release on the Citizen Oversight Committee’s website titled “Measure ULA Celebrates Two Years!”, it seemed far too high to Manville, the UCLA professor. He later emailed researchers and city officials to try and track down where it came from.

Emails obtained by LAist show Manville asking Monteilh about the figure. Monteilh wrote back, saying, “Sounds like someone misrepresented the jobs formula.”

LAist reached out to Monteilh, but he said we needed to contact his bureau’s spokesperson. That spokesperson deferred questions to the city’s Housing Department.

The number also sounded too high to Jan Brueckner, a UC Irvine economics professor emeritus who has not been involved in studies on either side of the mansion tax debate.

“It just doesn't pass the smell test,” Brueckner told LAist. “It just seems way too big, and I don't think the logic is reasonable.”

The measure’s first batch of affordable housing funds totaled $55.6 million. If all of that money went to labor — excluding land, building materials or other development costs — each of those 10,000 workers would have received $5,560. Is that enough to create a union job?

Manville said the estimate was fundamentally flawed because it counted jobs without counting the hours associated with each job. Perhaps 34 workers stepped onto a job site for every $1 million spent on development. But some may have only been employed for a week.

“Most people, when they think about a job being created, they think about a full-time job,” Manville said. But under Measure ULA supporters’ analysis, he said, those jobs are “not going to be full-time work of the sort we think about.”

The Citizen Oversight Committee’s website is managed by Measure ULA’s interim inspector general, a public policy firm called Estolano Advisors. The firm’s principal, Richard France, told LAist in September the web post had been updated to clarify that the jobs estimate came from supporters of the measure.

The post was altered to say the tax is “creating” those jobs, rather than it has “created” the jobs.

When LAist asked how that number ended up on the oversight body’s website in the first place, France stopped responding. We’ve reached out to Estolano Advisors multiple times to seek clarification, but have not received a response.

Estolano Advisors is being paid nearly $755,000 for its services, according to its contract with the city.

Oversight committee ‘not there to be cheerleaders’

Sara Sadhwani, a politics professor at Pomona College, said the Citizen Oversight Committee should seriously consider all competing data on the tax.

“Oversight committees are not there to be cheerleaders of any particular policy — that would defeat the purpose,” Sadwhani said.

Instead, she said, they should “really assess the performance of any given policy and give the people of Los Angeles a real sense of whether or not the system is working.”

Stan Oklobdzija, an assistant professor at the UC Riverside School of Public Policy, said when assessing the performance of a policy like Measure ULA, it’s important for advocacy not to bleed into oversight.

“I think it's really important for the citizens of Los Angeles to have a good idea of exactly what this tax is doing,” Oklobdzija said. “It's important to be really, really accurate with your assessments of both its costs and its benefits.”

Efforts to reform the mansion tax have been proposed, only to fizzle at the end of Sacramento’s most recent legislative session.

A bill put forward in September by two state representatives would have lowered the tax to 1.5% on apartment buildings constructed within the last 15 years. But Mayor Karen Bass said she asked the lawmakers to shelve the bill to allow for further amendments.

Next year, voters could be asked to overturn the tax entirely. That’s if the Howard Jarvis Taxpayers Association succeeds at placing a measure on the November 2026 ballot targeting transfer taxes such as Measure ULA.