Los Angeles is falling behind on its ambitious housing targets, highlighting a growing disconnect between project approvals and actual construction as developers face mounting financial and regulatory challenges.
.jpg)
Under California’s state-mandated housing framework, the city must plan for 456,643 new residential units by 2029. However, as of the end of 2025, only 81,306 units had been permitted — just 17.8% of the goal with roughly half the timeline already elapsed.
While permitting activity suggests progress on paper, many approved developments are failing to move forward due to financial constraints, according to Sean Burton, CEO of Cityview.
“A lot of what’s been permitted is not financeable,” Burton said. “Developers finish their permitting because they were in the process, but it doesn’t mean they’re actually going to build the units.”
A high-profile example is Oceanwide Plaza, a $1.2 billion mixed-use project in downtown Los Angeles that has been stalled since 2019 due to funding issues. The unfinished towers — located near LA Live — have become a visible symbol of the region’s housing and development challenges.
The issue reflects a broader statewide problem tied to California’s Regional Housing Needs Allocation (RHNA), which requires cities to plan for housing across income levels or face penalties, lawsuits, or loss of local zoning control.
Across California, cities are struggling to convert housing plans into completed units.
San Diego has made relatively stronger progress, permitting about 29% of its required 108,036 units between 2021 and 2024. Increased density allowances near transit have helped boost supply, though rising inventory has also pushed vacancy rates to their highest levels in over 15 years and softened rents.
By contrast, San Francisco remains among the slowest, with only about 5% of its required 82,069 units planned. At the same time, rents have surged, averaging approximately $3,469 per month — among the fastest growth rates in the nation.
In Los Angeles, the multifamily vacancy rate stands at 5.7%, below the national average of 8.5%, while average monthly rents of $2,346 remain 32% higher than the U.S. average. Roughly 19,000 apartment units are currently under construction, a slight decline from the previous year.
Developers cite a combination of high construction costs, labor expenses, financing challenges, political friction and lengthy entitlement processes as key barriers to starting new projects.
Debate has intensified around Measure ULA, a property transfer tax on high-value real estate transactions. Developers argue the tax discourages investment, while housing advocates say broader economic conditions are the primary constraint.
Alan Greenlee, executive director of the Southern California Association of Non-Profit Housing, said, “There are plenty of reasons that development would be slow in Los Angeles right now” and there are “very few kinds of developments that are unprofitable now but would suddenly make money if ULA were waived.”
City officials have introduced initiatives such as the CHIP program and Executive Directive 1 to accelerate affordable and transit-oriented housing. However, Burton emphasized that approvals alone are not enough.
“People can’t move into a permit or live in a permit,” he said.
.jpg)
The housing shortfall extends beyond Los Angeles to surrounding cities.
Santa Monica has planned only a small fraction of its required housing and has already faced the so-called “builder’s remedy,” which allows developers to bypass certain zoning restrictions when cities fail to meet state mandates.
Meanwhile, Long Beach leads much of the region, having planned nearly 17% of its 26,502-unit target, followed by Glendale at about 14%.
Despite policy changes encouraging denser development near transit and job centers, most cities remain off track, underscoring the gap between planning and execution.
Burton said meaningful progress will require both policy reform — potentially including changes to Measure ULA — and stronger political commitment to housing development.
“It takes elected officials to really be committed to new housing and to say ‘Some of that’s going to have to get built in your neighborhood,’” he said.
Originally reported by Brannon Boswell in Co Star News.
.png)
.png)
