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The LA Mills Act Program Is Closed to New Applications: What Loft Buyers Should Know

THE LA MILLS ACT PROGRAM IS CLOSED TO NEW APPLICATIONS: WHAT LOFT BUYERS SHOULD KNOW

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September 28, 2026By Loftway

If you have been told that buying a historic loft in Los Angeles means you can apply for a Mills Act contract and cut your property tax bill, that advice is out of date. The City of Los Angeles is not currently accepting new Mills Act applications. The city's own draft policy document says so plainly, and explains why: "Additional staffing and budget allocations are required to implement all of the proposed changes and enable the goal of re-opening the program for new contract applications."

That single fact changes how a buyer should think about the Mills Act in this market. It stops being something you pursue after closing and becomes something you either inherit with the building or do not get at all.

What the Mills Act actually is

The Mills Act is a California preservation incentive enacted in 1972, codified at Government Code sections 50280–50290 and Revenue and Taxation Code sections 439–439.4. It lets a local government sign a contract with the owner of a qualified historic property: the owner commits to restoring and maintaining the building, and in exchange the county assesses the property differently.

The key word is differently, not lower — more on that below. The California Office of Historic Preservation describes it as the most significant economic incentive in the state for private restoration of historic buildings.

A property qualifies if it is privately owned, not exempt from property tax, and either listed in the National Register of Historic Places or located in a registered historic district, or listed in a state, city, or county official register of historical or architecturally significant sites, places, or landmarks. In Los Angeles that most often means a Historic-Cultural Monument or a contributing structure in an HPOZ.

Why the program being closed matters more than it sounds

Participation in the Mills Act is voluntary for local governments. Each city sets its own criteria, application procedure, and contract limits, and the state Office of Historic Preservation is not a party to any contract and has no administrative role. So "the Mills Act exists in California" and "you can get a Mills Act contract in the City of Los Angeles this year" are two different statements, and right now only the first is true.

According to the Los Angeles Conservancy, which tracks the program closely, the city stopped taking new contracts in 2020, and the roughly 246 contracts signed since 2014 save their owners more than $20 million in taxes in aggregate. A 2022 city assessment found that existing funding was insufficient to manage the number of contracts already in place, and that the benefits were concentrated in communities that already had lower barriers to opportunity.

For a buyer, the practical consequence is simple. A loft that already carries a Mills Act contract holds a benefit that a comparable loft next door currently cannot obtain at any price. Mills Act contracts run for a minimum of ten years and renew automatically each year, and they transfer with the property on sale, binding the new owner to the same rights and obligations. You are buying the contract along with the unit.

What is being proposed, and why DTLA lofts are directly in scope

The city has published draft policy updates rather than a reopening date. Several of the proposals matter specifically to loft buyers:

  • Wider eligibility. The draft would broaden eligibility to include National Register and California Register properties alongside the designations that currently qualify.
  • Adaptive reuse gets priority. The draft would prioritise multi-family residential properties and Adaptive Reuse Ordinance projects that include affordable housing, in lower-resource areas. Most Downtown LA loft stock exists because of the Adaptive Reuse Ordinance, so this is the part of the proposal aimed most squarely at buildings like these.
  • Fees that are currently uncollected would be collected. The draft contemplates an approved contract maintenance fee, plus fees for non-compliance to pay for the compliance inspections the contracts already require every five years.
  • Real enforcement. Stronger compliance provisions, including pursuing cancellation where an owner stays unresponsive after six months of attempted contact. The city notes that to date no Mills Act contract cancellations have occurred.

Separately, the City Council approved a new annual fee schedule on 20 December 2025, effective 23 February 2026, at $675, $861 and $1,086 depending on property size, per the Conservancy's summary of the change.

The risk nobody mentions to buyers

There is a second half to the draft policy that anyone paying a premium for a Mills Act loft should read. To create capacity for properties the program has historically underserved, the city is considering non-renewal of some existing contracts — with contracts in "Highest and High Resource" areas, and contracts twenty years old or older, identified as priorities for that treatment.

Non-renewal is not cancellation. Because these contracts are evergreen — ten years, extended by one year automatically each year — declining to extend starts a countdown rather than ending the benefit immediately. But it does mean the tax treatment on an older contract in a well-resourced neighbourhood is not guaranteed to run forever, and a listing that prices the Mills Act saving as a permanent feature is making an assumption the city has not agreed to.

What to do instead of applying

If the tax treatment is a real part of your budget, the sequence changes:

  1. Search for the contract, not the designation. A building being a Historic-Cultural Monument tells you it could have qualified. It does not tell you a contract exists. Those are separate facts and only one of them saves you money.
  2. Get the contract itself, in escrow. Read the recorded document, the restoration schedule it commits the owner to, and the maintenance obligations that become yours at close.
  3. Ask how old the contract is and what resource-area designation the property sits in. Those are the two variables the draft policy would use to prioritise non-renewal.
  4. Verify the assessed value with the County, not the listing. Marketing materials quote the saving; the Assessor holds the restricted value the saving is actually calculated from.
  5. Do not assume the saving survives a remodel. The contract governs what you may change, and enforcement is precisely what the draft policy proposes to strengthen.

We have written separately about what to verify before counting on Mills Act tax savings and about the mechanics of the deduction on LA historic lofts. This post is the status update those two now need: the door to new contracts is shut, and until it reopens the only way into the program in the City of Los Angeles is to buy a building that is already in it.

Sources

  • California Office of Historic Preservation, Mills Act Program — statute, eligibility, contract terms and the income approach.
  • Los Angeles City Planning, Mills Act Program Draft Policy Updates FAQ — application status, proposed eligibility, fees, inspections, enforcement and non-renewal priorities.
  • Los Angeles Conservancy, City of Los Angeles Mills Act Program — 2020 pause, contract count, aggregate savings, 2022 assessment findings and the fee schedule effective 23 February 2026.

This is general information, not tax or legal advice. Mills Act outcomes are property-specific and depend on the recorded contract and the County Assessor's valuation. Confirm current program status with Los Angeles City Planning before relying on any of it.