Los Angeles has locked its fast-track housing approval experiment into law, cementing a system that developers say will help boost affordable construction across the city.
The City Council has adopted the Affordable Housing Streamlining Ordinance, folding Mayor Karen Bass’ Executive Directive 1 designed to speed building into the municipal code. Bass is expected to sign the measure into law soon.
Under the ordinance, city agencies must finish pre-construction review within 60 days and issue permits within five days for projects where all the units are reserved for those making less than 80% of the area median income of $106,000.
The mayor's office said the directive has trimmed approval timelines from nine months to just weeks in the nation's second-largest city.
Codifying the directive is “a landmark moment for Los Angeles” that brings predictability to acquisitions and underwriting, according to Simon Aftalion of Passo, whose firm has eight ED1 projects underway, with plans for nearly 3,000 units under the program.
Los Angeles faces a widening affordability gap as it works to plan for 225,000 new residential units by 2029. Vacancy rates are among the lowest in the country, and average rents sit about 32% above the national average, according to CoStar.
Other cities are also using executive actions to tackle affordability, with San Diego, Seattle, Boston and Chicago rolling out measures that fast-track permits, shrink review times and modernize planning departments.
“This is a meaningful achievement for the city and a major step forward in breaking through the layers of red tape that have slowed housing production for too long,” Aftalion told CoStar News. “It should serve as a model for cities across the country that are committed to accelerating the creation of much-needed homes.”
Streamlining development
ED1 has been in place since late 2022 and has helped draw proposals for more than 35,000 affordable units. About 29,000 have secured approvals, and several projects from South LA to the San Fernando Valley are already completed or under construction.
While ED1 is perhaps the most popular housing development tool in Los Angeles today, developers say, it’s not the only one.
The City Housing Incentive Program offers added benefits for affordable projects, especially near transit corridors, and the newly signed SB 79 further streamlines approvals and opens up more sites for apartment development.
Even with ED1 made permanent, experts say challenges remain for attracting investment and getting affordable projects off the ground. The city’s so-called mansion tax on high-value commercial and residential sales, along with elevated construction and borrowing costs, is contributing to a 20% year-over-year decline in new construction, according to CoStar data.
Aftalion and other developers argue that locking ED1 into law helps counter those pressures by providing a clearer path for projects to advance.