July 1 Quietly Rewrote the Rules of LA Real Estate — Here's What Changed
A New Rent Control Formula
If you own, rent, sell, or build in Los Angeles, the ground shifted under your feet on July 1, 2026. Three major changes took effect at once — a new rent control formula, a statewide transit-density law, and updated "mansion tax" thresholds — and in the same week, the City Council made a decision about Measure ULA's future that most Angelenos haven't heard about yet.
Here's what actually changed, and what it means for you.
By: Jake Plewa Commercial Real Estate Sales & Valuation, Los Angeles
The mansion tax isn't going to the ballot — but relief may come anyway
For three years, the fight over Measure ULA — the transfer tax voters passed in 2022 — has been headed toward a November rematch at the ballot box. That just changed. On July 1, the City Council shelved the proposal to let voters exempt new multifamily projects from the tax.
Instead, the Council directed the Housing Department to draft something quieter but potentially more consequential: a pilot tax credit program that would drop ULA's rate to roughly 1.5% or lower for qualifying multifamily and mixed-use projects. To qualify, developments would need to be built with prevailing wages, include affordable units, and be sold within 10 years of completing construction.
Two things are worth understanding here. First, this is reform without repeal — the city gets to adjust the tax on its own terms, without asking voters. Second, the relief targets new construction only. If you're selling an existing home or building, nothing changes for you.
And the numbers did change on July 1, at least slightly. The ULA thresholds adjusted upward: sales above $5.4 million now pay the 4% tax, and sales above $10.9 million pay 5.5%. If you're anywhere near those lines, threshold planning matters more than ever — a $5.39 million sale and a $5.41 million sale are separated by more than $216,000 in tax.
The bigger wildcard sits in Sacramento. Assembly member Buffy Wicks recently introduced AB 736, which would cap all local transfer taxes statewide at 1.5% — a bill that would effectively gut ULA if it passes. It's early, but it's the one to watch when the Legislature returns from recess in August.
Rent control just got its biggest overhaul in 40 years
If you own or rent one of LA's roughly 650,000 rent-stabilized units, July 1 brought the most significant change to the Rent Stabilization Ordinance in more than four decades.
The new formula: annual allowable increases are now calculated at 90% of CPI, with a hard ceiling of 4% (down from 8%) and a floor of 1% (down from 3%). For the year running July 1, 2026 through June 30, 2027, the allowable increase is 3%.
The ordinance also eliminated two long-standing add-ons. Landlords can no longer tack on 1–2% for covering a tenant's gas or electric service, and the provision allowing a 10% increase when an additional dependent moved into a unit is gone entirely.
For tenants, this is meaningful protection against the steep catch-up increases of recent years. For owners, the math on RSO buildings has permanently changed — anyone underwriting a rent-controlled property on assumptions of 6–8% annual increases needs to re-run those numbers today. Expect this to show up in valuations, and expect it to be a point of negotiation in every RSO building sale going forward.
The state says build near transit. LA says: eventually.
The third July 1 change is the one with the longest fuse. Senate Bill 79 — the "Abundant and Affordable Homes Near Transit Act" — is now live statewide. It allows residential buildings up to nine stories within 200 feet of major heavy-rail stops (think Metro's B and D lines), and up to eight stories near light rail and dedicated bus-lane stops, regardless of what local zoning says.
That's a genuinely big deal for a city built around single-family neighborhoods, many of which sit within a half-mile of a Metro station.
But here's the twist: Los Angeles adopted what housing advocates have called the most restrictive implementation approach available. In ordinances passed June 23, the city laid out a phased rollout that delays full SB 79 implementation until 2030. State housing officials still have to review that plan — and there's a real question whether Sacramento will accept it.
So what does this mean practically? If you own property near a Metro stop, your land may be worth more than your zoning currently suggests — developers are already mapping Tier 1 and Tier 2 zones. If you're a homeowner worried about a nine-story building next door, the city's slow-walk buys time, but the direction of travel is clear: density near transit is coming, and the fight now is over the timeline, not the destination.
The bottom line
Taken together, these three changes tell one story: the rules that governed LA real estate for the past decade are being renegotiated in real time. Rent growth on stabilized units is capped harder than ever, the transfer tax that reshaped the luxury and commercial markets is being softened through the back door, and state law is overriding local zoning near transit — even as the city resists.
Whether you're a homeowner, an investor, a landlord, or a renter, the worst position to be in is not knowing. If you want to talk through what any of this means for your specific situation, reach out — I'm following these changes as they happen.
Sources: The Real Deal, LA Housing Department, LA City Planning, Hanson Bridgett, Apartment Association of Greater Los Angeles, California Department of Housing and Community Development.
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NOTE: The information provided on this website and this post is for general informational purposes only and is not intended as financial, tax, legal, or real estate advice. We are not licensed accountants, attorneys, estate planners, or real estate appraisers. All valuations, market analysis, and content are provided as educational information only. Any financial, tax, legal, or real estate decisions should be made in consultation with qualified professionals such as a licensed real estate appraiser, accountant, attorney, or financial advisor. Results and outcomes will vary based on individual circumstances.Keywords: Los Angeles rent control 2026, LARSO, RSO apartment rules, Los Angeles rent increase, LA apartment building value, rent stabilization ordinance Los Angeles, Measure ULA