Mom-and-pop apartment owners in Los Angeles and Santa Monica are staring down a 2026 ballot season that could meaningfully change their tax picture—both at the local and statewide level.¹²³ Some measures would increase or preserve transfer and parcel taxes, while others would limit local taxing power or expand rent control authority, indirectly affecting property values, income, and exit strategies.⁴⁵

1. Los Angeles: “Mansion Tax” Changes and Other City Measures

Measure ULA “Mansion Tax” – Possible June 2026 Rewrite

Los Angeles’ Measure ULA currently imposes a special transfer tax on high-value real estate sales, including multifamily, to fund homelessness and affordable housing.¹⁶ A motion at City Hall seeks to place a reform measure on the June 2026 ballot that would, among other changes, exempt new apartment buildings (roughly within the last 15 years) from the ULA transfer tax.¹²

For small apartment owners, the implications are mixed:

If your property is older housing, you would likely still be subject to the ULA transfer tax on a sale above the threshold values, keeping a significant transaction cost in place.⁶

If your building qualifies as “recently constructed,” a successful reform could lower your potential exit tax burden, making a sale marginally more attractive and possibly improving buyer demand and pricing.¹²

Tenant advocates are pushing back, warning that exemptions for newer apartments would reduce ULA funding for renter protections and homelessness prevention, potentially shifting political pressure onto small owners as “soft targets” for future revenue or regulation.¹²

At the same time, statewide taxpayer groups are advancing a separate initiative to overturn ULA and similar local transfer taxes entirely, highlighting how fragile this revenue source may be over the next few years.²³

Possible Increases in Hotel and Parking Taxes

The Los Angeles City Council is also exploring placing increases to the transient occupancy (hotel) tax and parking tax on the June 2026 ballot.⁷ While these are not direct taxes on apartment buildings, they matter to mom-and-pop owners because:

Higher hotel and parking taxes can make visitors and workers more cost-conscious about where they stay and park, affecting certain neighborhoods’ retail and mixed-use vitality, which feeds back into rental demand and value.⁷

If voters prove willing to approve these revenue measures, it signals an electorate that may also support future tax increases aimed more directly at property owners, including small landlords.⁷

2. Santa Monica: Parcel Tax and High-End Transfer Tax

New Citywide Parcel Tax – Schools and City Services

Santa Monica is moving toward a flat parcel tax measure that would impose approximately 540 dollars per parcel to support city services and help preserve school funding, exempting seniors.⁸ The proposed tax is expected to generate about 12 million dollars annually and would continue until repealed by voters.⁸

For mom-and-pop apartment owners in Santa Monica:

This is a direct increase in annual carrying cost for each parcel, regardless of income or building size, squeezing cash flow on smaller properties where margins are already thin under local rent control caps.⁸

Owners of duplexes and small apartment buildings would likely need to treat the parcel tax as a non-recoverable expense, absorbing it unless lease structures or local regulations allow pass-throughs.⁸

Politically, the measure is framed as protecting schools, homelessness services, emergency response, and libraries—causes that are broadly popular, making defeat of the tax challenging for a fragmented group of small landlords.⁸

Measure GS High-Value Transfer Tax – And the Statewide Threat

Santa Monica’s Measure GS added a substantial local transfer tax surcharge on properties selling for 8 million dollars or more, generating roughly 79 million dollars in its first cycles, with significant allocations to schools and housing.⁹ An earlier attempt to qualify a local initiative that would have exempted multi-family housing sales from GS failed to reach the 2024 ballot but could still appear in a future election, including November 2026.⁹

For small owners, the direct impact of GS is limited unless your building’s sale price approaches or exceeds 8 million dollars, but the policy direction is clear:

The city has shown a willingness to use high-end real estate transactions as a piggy bank for ongoing programs, suggesting that thresholds or rates could be revisited in the future.⁹

Multifamily exemptions, if ever approved, would create a two-tier market, potentially favoring apartments over other asset types in high-value sales and slightly improving cap rates for qualifying properties.⁹

More relevant for Santa Monica is a proposed statewide ballot measure that would drastically clamp down on local property-related taxes, including transfer taxes.³⁹ A current proposal would:

Prohibit voters from approving new real estate transfer taxes beyond a narrow existing authorization of about 0.11 percent, effectively blocking “Measure GS style” surcharges going forward.³

Overturn existing voter-approved property-related taxes, including real estate transfer taxes that do not comply with its limits, within two years of enactment.³

If that statewide measure qualifies and passes in November 2026:

Santa Monica’s Measure GS could be phased out, eliminating a major source of local funding for schools and housing.³⁹

The city would likely look for replacement revenue—often in the form of parcel taxes, utility taxes, or other broad-based charges where apartment owners are a predictable target.³⁹

For owners of higher-value buildings, the collapse of GS could make sales more attractive, possibly boosting transaction volume and values in the short to medium term.³⁹

3. Statewide Measures on Rent Control and Property-Related Taxes

Renewed Efforts to Expand Local Rent Control Authority

Although a statewide rent control expansion measure failed in early 2026, advocates have repeatedly pushed versions of the Justice for Renters Act, previously placed on the November 2024 ballot as Proposition 33.⁴¹⁰ That initiative would have removed state limits on local rent control (Costa-Hawkins-type restrictions), explicitly allowing cities and counties to expand rent control to more properties, including single-family homes and newer apartments.⁴

If a similar measure qualifies for November 2026 and passes:

Los Angeles and Santa Monica could extend rent control to buildings that are currently exempt, pulling many mom-and-pop owners into stricter local regulation on rent increases, vacancy controls, and eviction rules.⁴¹⁰

Property values for smaller, individually owned buildings could stagnate or decline as buyers price in tighter rent limits and higher regulatory risk.⁴¹⁰

Long-term, owners might see reduced flexibility to reposition or refinance buildings based on market rents, complicating retirement and succession planning that relies on equity built over decades.⁴¹⁰

Statewide Measure Targeting Local Transfer and Property Taxes

The same statewide proposal threatening Santa Monica’s GS transfer tax would also hit other local property-related taxes that exceed strict constitutional or statutory caps.³⁹ Key elements include:

Rolling back or prohibiting a broad range of local property-linked taxes and fees, especially those adopted by majority-vote “special purpose” measures.³

For mom-and-pop owners, this could provide medium-term relief from the constant layering of new transfer and parcel taxes, but it may shift local governments toward more aggressive enforcement and fee-based approaches where landlords still bear significant costs (code enforcement, inspections, licenses).³⁵

4. Practical Takeaways for Mom-and-Pop Owners

Heading into June and November 2026, small apartment owners in Los Angeles and Santa Monica should:

Track the final ballot language: Details on exemptions, thresholds, and phase-out timing will drive which measures truly matter to you.¹²³

Stress-test cash flow: Build the potential parcel tax for Santa Monica and continued or modified ULA transfer tax for Los Angeles into pro formas and refinance plans.¹²⁸⁹

Revisit holding vs. selling: If you own higher-value assets that could be hit by transfer taxes, consider whether to sell before possible rate changes—or to wait if a rollback measure appears likely to pass.²³⁶⁹

Stay engaged politically: Mom-and-pop owners remain under-organized compared with tenants’ unions and large institutional landlords; your testimony and support can influence how local councils draft these measures before they reach the ballot.¹⁷⁸

From your vantage point as a small owner, 2026 is shaping up as a year where ballot-box tax policy can either lock in higher ongoing costs or modestly limit local governments’ ability to treat property transfers as an open-ended revenue source.¹²³⁹

Written by Wesley V. Wellman

Wesley V. Wellman has been active in the financial services field for more than 40 years. His brokerage firm, Wellman Realty Company, specializes in multi-family and commercial investment property. Since the year 2000, Mr. Wellman has sold over $342 million of investment property. He is a Santa Monica apartment industry leader and is frequently quoted in the local press about rental property issues. He is one of the founding directors of the Action Apartment Association, which was formed in 1980. As an advisor, Mr. Wellman draws on a wealth of educational background in real estate, taxation, securities and estate planning.

Footnotes

1. LAist, “Researchers Say L.A.’s ‘Mansion Tax’ Hurts New Housing. Voters Could Change It,” January 23, 2026.

2. CalMatters, “L.A. Is Keeping Its ‘Mansion Tax.’ Now the Debate Is Going Statewide,” January 26, 2026.

3. The Lookout (Santa Monica), “Proposed Statewide Ballot Measure Puts Local Transfer Tax at Risk,” February 4, 2026.

4. Institute of Governmental Studies, University of California, Berkeley, “November 5, 2024 Ballot Proposition 33 (Justice for Renters Act): Official Guide and Analysis,” November 4, 2024.

5. Multifamily Dive, “6 California Housing Moves to Follow in 2026,” January 29, 2026.

6. Realtor.com News, “L.A.’s Mansion Tax Chokes New Construction as Permits Plunge 40%,” February 19, 2026.

7. Los Angeles Sentinel, “L.A. Council to Explore Potential Tax Measures Ahead of June Election,” January 26, 2026.

8. Santa Monica Daily Press, “Election Season Begins with a Trio of Ballot Measures,” January 23, 2026.

9. Santa Monica Daily Press, “Proposed Statewide Ballot Measure Puts Local Transfer Tax at Risk,” February 4, 2026.

10. Institute of Governmental Studies, University of California, Berkeley, “November 5, 2024 Ballot Proposition 33 (Justice for Renters Act): Voter Information and Fiscal Analysis,” November 4, 2024.