Why Los Angeles Housing Costs Keep Rising — And How JDJ Consulting Can Help
Los Angeles housing is in crisis. Prices are up, supply is down, and frustration is everywhere. In 2024, the city approved 23% fewer housing permits than the year before. That means fewer apartments, fewer homes, and fewer opportunities for the people who actually live here.
We hear excuses all the time. Some blame Wall Street landlords. Others say it’s inflation, or even lifestyle choices like “avocado toast.” But the truth is far simpler — and far more uncomfortable. Los Angeles made housing scarce on purpose. Through strict zoning, endless red tape, and policies that slow projects, the city created the crisis we see today.
This article breaks it down: why permits keep falling, how policies like ED1, ULA, and CEQA block growth, and what people are saying online about housing. Most importantly, we’ll explain how JDJ Consulting helps developers push through this maze and get projects moving again.
📊 Los Angeles Median Home Prices (2015–2025)
Source: California Association of Realtors (CAR), 2025
The Reality of the Permit Decline
The numbers tell the story. In 2023, Los Angeles approved 11,311 housing units. In 2024, that number dropped to 8,706 units. That’s 2,605 fewer homes — a 23% decline in just one year.
For renters, that means more competition for apartments. For homebuyers, it means tighter inventory and higher bidding wars. And for developers, it signals that the city is moving backward, not forward, on housing goals.
This decline isn’t just a statistic. It’s a warning sign. Los Angeles is under pressure from the state to add nearly 500,000 new homes by 2029. At this pace, the city will fall far short. The gap between demand and supply will only widen, driving costs up for everyone.
Permits are the first step in building. If fewer permits get approved, fewer projects break ground. And if fewer projects start, the housing shortage deepens. It’s a chain reaction — and right now, it’s working against the people of Los Angeles.
Policies That Slow Down Housing in Los Angeles
Why are permits falling? The answer lies in a web of local policies and voter decisions that make development harder. Each one was sold as a way to protect neighborhoods or fund affordable housing. Together, they’ve slowed growth to a crawl.
Here are the biggest culprits:
ED1 (Executive Directive 1)
Launched with good intentions, ED1 was meant to fast-track affordable housing approvals. But instead of opening the door to more projects, it restricted where developers could actually build. Multifamily housing was limited in many areas, and opportunities shrank.Measure ULA (“Mansion Tax”)
This policy added a transfer tax on properties sold for more than $5 million. While it promised new funds for housing programs, the reality is different. Many apartment buildings fall into that price range. The tax discouraged investors from funding multifamily housing, leaving fewer projects viable.CEQA (California Environmental Quality Act)
Originally designed to protect the environment, CEQA has been weaponized. Opponents of housing projects use lawsuits and appeals to drag approvals out for years. Developers face uncertainty, higher costs, and sometimes give up entirely.Measure U (1986 Downzoning)
Perhaps the most damaging policy of all. This voter-approved law capped density across most of Los Angeles. It locked huge areas into single-family zoning, even as the city’s population grew. Decades later, that choice still strangles supply.
Each of these policies piles on another layer of difficulty. Developers face higher costs, longer timelines, and unpredictable outcomes. It’s no wonder so many projects no longer “pencil.”
And this isn’t just theory. If you ask people online why LA housing is so expensive, they’ll point to the same thing: zoning laws, NIMBY politics, and restrictive rules.
What People Are Saying About Housing Barriers
The housing shortage in Los Angeles is no longer debated only among developers and policymakers. It has become a public discussion where residents, community advocates, and economists point to the same structural problem: local rules that prevent more housing from being built.
Key issues frequently raised include:
Single-family zoning dominates – A majority of Los Angeles land is restricted to single-family homes, limiting opportunities for multi-family developments.
Missed transit opportunities – Density near bus and rail stops remains low, undermining public transit investments.
Downzoning measures of the 1980s – Policies like Measure U cut allowable density and still shape today’s housing limits.
Neighborhood resistance – Community pushback often delays or blocks new apartments, citing traffic, parking, or character concerns.
Complex regulations – Environmental reviews, local ordinances, and layered approvals create a maze of requirements.
The common conclusion is clear: high costs are a symptom of rules that restrict supply. Unless those barriers are addressed, Los Angeles will continue to struggle to meet demand.
🔄 Factors Behind Rising LA Housing Costs
Who Loses When Housing Gets Stuck?
When new housing faces delays or cancellations, the impact extends far beyond developers. The entire city feels the consequences.
Renters – Limited new supply means fewer apartments and higher rents. Families and young professionals face increasing competition for a shrinking pool of units.
Homebuyers – With fewer homes built, prices stay elevated. First-time buyers are squeezed out, while existing homeowners benefit from scarcity.
Developers – Delays increase holding costs and create financial uncertainty. Many developers walk away from projects that no longer promise returns.
The City of Los Angeles – The city is under a state mandate to permit nearly 500,000 units by 2029. Falling short risks losing control to state agencies or facing financial penalties.
Ultimately, stalled housing projects create a cycle that hurts residents, slows economic growth, and undermines long-term planning goals.
Why Projects Don’t Pencil Anymore
For many developers, the economics of housing development in Los Angeles have shifted dramatically. A project that once made sense on paper may no longer be financially viable today.
Several factors contribute:
Higher financing costs – Rising interest rates increase the price of borrowing, reducing profit margins.
Construction challenges – Labor shortages and escalating material prices raise total project costs.
Added taxes and fees – Policies such as Measure ULA add millions in transfer costs, creating new financial hurdles.
Regulatory risks – Environmental lawsuits, zoning restrictions, and prolonged review timelines make outcomes unpredictable.
When these pressures combine, developers often find that their pro forma no longer balances. Many projects are delayed indefinitely or abandoned altogether. This deepens the housing shortage and keeps Los Angeles from achieving its stated goals.
The Role of NIMBYism in Los Angeles
NIMBYism—“Not In My Backyard”—has played a central role in shaping Los Angeles housing policy. While framed as neighborhood protection, it often results in fewer homes being built and higher costs citywide.
Opponents of new housing typically argue that development threatens neighborhood character, increases traffic, or reduces parking availability. In many cases, these objections carry enough weight at planning hearings to delay or block projects.
The impact is significant:
Projects are reduced in scale, eliminating hundreds of potential units.
Developers face costly appeals that extend timelines by years.
Housing near transit and job centers is pushed further out, worsening commutes.
While community concerns matter, the persistence of NIMBY restrictions has helped create the affordability crisis Los Angeles now faces. Without balancing local concerns against the urgent need for housing, progress will remain limited.
💡 Permit Delay Cost Estimator
Assumption: Each month of delay adds ~1.5% to costs (McKinsey, 2023)
📝 Quick Quiz: LA Housing Market
Q1: What was the average rent increase in LA in 2024?
Source: Apartment List, 2025
Can Faster Permitting Solve the Problem?
Streamlining the permitting process is often proposed as a solution to the housing shortage. On the surface, it makes sense: less time waiting for approvals means lower costs and faster delivery of units.
However, faster permitting alone cannot solve the problem. Even if approvals take months instead of years, projects still face:
Rising interest rates and financing challenges.
High construction costs and labor shortages.
Regulatory layers that create legal uncertainty.
Community opposition that can spark lawsuits or appeals.
That said, improved permitting does make a measurable difference. For developers working with thin margins, every month saved can determine whether a project moves forward. Los Angeles must combine faster approvals with zoning reform, predictable rules, and reduced legal barriers to make housing production viable.
How JDJ Consulting Helps Developers Move Forward
In this complex environment, developers need more than vision—they need guidance through a challenging system. JDJ Consulting Group provides the expertise required to navigate Los Angeles’ regulatory, political, and financial landscape.
Our team helps clients:
Identify zoning pathways that make projects possible.
Manage entitlement and permitting processes efficiently.
Anticipate community resistance and prepare effective responses.
Adapt pro formas to reflect real-world costs and constraints.
Align projects with state mandates to strengthen approval chances.
By focusing on strategy, compliance, and long-term feasibility, JDJ Consulting bridges the gap between ambition and delivery. We help developers move forward in a city where too many projects stall before breaking ground.
The Bigger Economic Picture
Housing is not just a local issue. It is a cornerstone of Los Angeles’ broader economy. When housing production stalls, the ripple effects touch nearly every sector.
Construction jobs decline when fewer projects break ground. Skilled workers either leave the city or face long gaps between projects.
Local businesses lose opportunities as fewer residents move into new communities. Retail, restaurants, and services see slower growth.
Commuting patterns worsen because workers are pushed farther from job centers. Longer commutes increase traffic and pollution.
City revenue declines when projects stall, as property taxes, permit fees, and transfer taxes shrink.
Housing production fuels economic growth. When that production slows, Los Angeles limits its potential to create jobs, attract investment, and remain competitive against other major cities.
Why Policy Shifts Matter Now
Los Angeles faces a pivotal moment. State mandates require the city to approve nearly half a million new units by 2029. Meeting this target will demand significant policy changes and bold leadership.
Why action cannot wait:
Backlog of demand – Years of underbuilding have created a severe shortfall. Waiting longer will only make the gap harder to close.
State pressure – If Los Angeles cannot meet its targets, the state may intervene with direct authority.
Investor confidence – Developers and lenders need clear, predictable policies before committing capital.
Regional competition – Cities across California are competing for investment. Those with faster approvals and better zoning attract projects first.
Policy change is not just about compliance. It is about creating a stable environment where developers, renters, and buyers all have a clearer path forward.
What Comes Next for Los Angeles Housing
The path forward will not be simple, but it is possible. Los Angeles must combine long-term structural reforms with immediate action to prevent the housing shortage from worsening.
Key steps include:
Zoning reform to allow more density, particularly near transit and job centers.
Streamlined approvals to cut delays and reduce uncertainty for developers.
Balanced incentives to encourage affordable housing while keeping projects financially viable.
Community engagement that addresses local concerns while emphasizing the citywide need for more homes.
Partnerships with experts who understand the local landscape and can guide projects through complexity.
The stakes are high. Without decisive changes, Los Angeles risks falling further behind in affordability, economic growth, and quality of life. With the right policies and guidance, the city can turn a crisis into an opportunity to build for the future.
Take the Next Step with JDJ Consulting Group
The housing challenges in Los Angeles are real. Developers face rising costs, shifting policies, and approval processes that can stall even the strongest projects. But progress is still possible with the right expertise.
At JDJ Consulting Group, we specialize in helping developers and investors navigate these challenges. From zoning analysis to permit expediting and entitlement strategy, our team provides clear direction in a complex environment. We understand how to balance compliance, community input, and profitability so projects can move forward with confidence.
If you are planning a new development or struggling with delays, now is the time to act. The landscape is changing quickly, and success depends on informed decisions made early in the process.
Call JDJ Consulting Group today at (818) 793-5058 to discuss your project and discover how we can help you move forward in Los Angeles.
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JDJ Consulting Group helps developers and investors overcome zoning, permitting, and entitlement hurdles in Los Angeles.
📞 Contact Us TodayFrequently Asked Questions: Why Los Angeles Housing Costs Keep Rising
1. What caused the 23% drop in LA residential permits in 2024?
The 23% decline in permits was not due to a single factor but rather a combination of pressures that made development less attractive. Rising interest rates increased financing costs while construction prices stayed high. At the same time, zoning limits and complex approval rules discouraged new housing starts.
High interest rates made loans more expensive.
Construction costs remained elevated, especially for labor and materials.
Policies like Measure ULA added new tax burdens.
Permit delays and environmental reviews discouraged investment.
2. How many residential units were permitted in Los Angeles in 2024 compared to 2023?
Los Angeles permitted 8,706 residential units in 2024, compared to 11,311 units in 2023. This represented a reduction of 2,605 units in a single year. The drop underscored the severity of the slowdown and signaled growing challenges for both developers and city leaders.
2023: 11,311 units permitted.
2024: 8,706 units permitted.
Total decline: 23% fewer units.
3. How steep was the decline in permits in early 2025?
The slowdown became even sharper in early 2025. In the first quarter alone, Los Angeles approved only 1,325 units, compared to 3,067 units in the same period the previous year. That marked a decline of nearly 57% in just three months.
Q1 2024: 3,067 units approved.
Q1 2025: 1,325 units approved.
A 57% year-over-year decline.
4. What’s behind the continued late-2024 permit decline?
By late 2024, Los Angeles had permitted nearly one-third fewer units than the year before. The slowdown was driven by persistent financing difficulties, high construction costs, and a lack of certainty in local regulations.
Total permitting was down 30.7% by fall 2024.
About 3,055 fewer units were approved compared to 2023.
Developers delayed projects amid unclear policies.
5. Do zoning and LA’s regulatory complexity delay permits?
Yes. Zoning restrictions and regulatory complexity are major drivers of slow permitting. Los Angeles has one of the most layered approval systems in the nation, requiring reviews across multiple agencies. This process adds months or years to housing projects.
Zoning laws often limit density in high-demand areas.
Neighborhood plans add another layer of restrictions.
Projects face separate reviews for fire, traffic, and parking impacts.
Developers must navigate overlapping city and state rules.
6. Are environmental laws slowing housing development?
Environmental protections are critical, but in practice, laws like CEQA often create roadblocks. Developers face long reviews and frequent lawsuits, which increase costs and delay projects. While designed to protect the environment, the law is frequently used to stall development.
CEQA reviews take months or years to complete.
Opponents file lawsuits to block projects.
Even small projects can face lengthy appeals.
Costs increase as developers wait for outcomes.
7. Are zoning laws to blame for housing scarcity in LA?
Zoning laws play a major role in Los Angeles’ housing shortage. More than three-quarters of residential land is reserved for single-family homes, leaving little room for multifamily developments where demand is highest.
Single-family zoning dominates city neighborhoods.
Downzoning measures cut allowable density decades ago.
Building apartments near transit is often restricted.
Developers cannot add supply where it’s most needed.
8. How is AI being used to speed up permitting after the fires?
AI is being adopted to accelerate housing approvals. Los Angeles and California agencies now use digital tools to pre-check building plans, flag compliance issues, and reduce staff workload. This makes it possible to deliver permits in days instead of weeks.
AI screens plans for code compliance.
Errors are flagged before submission.
Review times shrink from months to days.
Post-disaster rebuilding can move more quickly.
9. What state-sponsored permitting AI tools are available?
California has launched free AI-powered platforms such as eCheck to support faster housing approvals. These tools help local governments process applications more efficiently and allow homeowners to submit plans without delays.
eCheck validates architectural plans digitally.
Municipalities access AI systems at no cost.
Tools are targeted at wildfire recovery zones first.
The state plans to expand adoption across cities.
10. How much faster can AI tools make permit reviews?
AI systems significantly cut review times. What once took months of staff review can now be reduced to hours. This efficiency not only saves time but also lowers the chances of costly resubmissions for developers.
Reduces reviews from months to days.
Automates code compliance checks.
Cuts resubmission cycles by catching errors early.
Frees staff to focus on complex cases.
11. What are “A-Permits” in LA?
A-Permits are a type of construction authorization that allow developers or homeowners to begin building activities. They are valid for six months, with the option to renew once. However, if work is not pursued actively, the permit may expire.
Valid for six months.
Can be renewed one time.
May be revised during active use.
Expire if work is not diligently pursued.
12. How can homeowners expedite permits for additions?
Homeowners seeking permits for additions must still go through a full review process. The best way to expedite is by preparing detailed, accurate plans and consulting zoning maps before applying.
Confirm zoning allows the addition.
Submit a complete site and floor plan.
Work with licensed architects or expeditors.
Engage planning staff early to resolve questions.
13. What economic impact does slower housing growth have on LA?
Housing slowdowns hurt Los Angeles beyond the construction sector. When projects stall, fewer jobs are created, businesses see less demand, and tax revenues fall. In the long term, affordability worsens and the city loses competitiveness.
Construction jobs decline.
Consumer demand slows in underbuilt neighborhoods.
Tax revenues shrink from property and transfer fees.
Workers face longer commutes due to limited local housing.
14. Is the supply shortage driving rents up in Los Angeles?
Yes. When fewer homes are built, the supply gap widens, and demand outpaces availability. This drives up rents across the city and makes affordability worse for low- and middle-income families.
Renters face more competition.
Vacancy rates remain extremely low.
Prices rise fastest in central neighborhoods.
Affordability programs cannot meet demand.
15. How does California’s housing shortage compare nationally?
California’s housing shortage is among the worst in the country. The state consistently produces fewer units per resident compared to the national average, while population and job growth remain strong.
Permits per 100 residents are below the U.S. average.
Strong job centers outpace housing supply.
Regulations slow growth compared to other states.
Demand pushes prices higher than national trends.
16. Have state laws helped LA address its housing shortage?
State laws have helped somewhat, but challenges remain. Reforms like SB9 and SB10 allow more units on single-family lots and encourage density, but local implementation often limits results.
SB9 permits lot splits for small multifamily projects.
SB10 allows density near transit hubs.
SB35 streamlines approvals for infill housing.
Local resistance continues to slow uptake.
17. Can speeding permits alone boost housing construction?
Faster permitting cannot solve every problem but does make a measurable difference. Studies suggest that even modest time savings can result in more projects being completed.
A 25% faster process could yield 14% more units.
Lower holding costs make projects financially viable.
Faster approvals increase investor confidence.
Reduces abandonment of stalled developments.
18. What’s the relationship between new housing and displacement?
Research shows that building more housing reduces displacement. When supply increases, upward price pressure eases, making it less likely for existing residents to be forced out.
More units stabilize neighborhood rents.
Construction absorbs demand from higher earners.
Areas with new housing see less tenant turnover.
Scarcity drives gentrification more than construction itself.
19. Why are some areas still seeing permit approvals despite the decline?
Not every part of Los Angeles is slowing. Some districts with new zoning changes or strong market demand continue to approve projects at steady rates.
Areas near transit hubs remain attractive.
Downtown projects still receive investment.
Zoning updates support new approvals in targeted areas.
Wealthy neighborhoods often resist large developments.
20. What reforms are needed to restore LA housing growth?
To restore housing growth, Los Angeles must combine zoning reform with faster, more predictable permitting. Addressing costs and building public support are also key.
Upzone near transit and job centers.
Streamline approval processes citywide.
Create stable tax and fee policies.
Balance community concerns with housing needs.
