Los Angeles is running out of time to turn its housing promises into reality.
Under California’s current residential requirements — mainly involving apartments — the city of Los Angeles is on the hook to plan for 456,643 units by 2029. So far, the city has permitted just 81,306 units as of Dec. 31, 2025, putting it about 17.8% of the way to its goal with roughly half the timeline already passed, according to the latest city data.
But the permitting shortfall is only part of the story. A number of approved projects are being stalled by financing hurdles before they can break ground, according to Sean Burton, chief executive officer of Los Angeles-based multifamily developer Cityview. The company is under way on developing 489 apartments at a new complex in Westchester.
“A lot of what’s been permitted is not financeable,” Burton told CoStar News. “Developers finish their permitting because they were in the process, but it doesn’t mean they’re actually going to build the units.”
One example of much-needed housing units being held up by financial woes is Oceanwide Plaza in downtown Los Angeles. Construction on the $1.2 billion complex of condominiums, hotel rooms, apartments and retail next to massive entertainment complex and sports venue LA Live halted in 2019 with funding shortfalls and distress, leaving the towers exposed to vandalism and years of deterioration as market conditions shifted, and giving the project the nickname of "the graffiti towers."
The challenge facing Los Angeles reflects a broader issue across California, where the state mandate known as the Regional Housing Needs Allocation requires cities to plan for a set number of residential units at all income levels. Come 2029, cities that have not planned for enough housing per the mandate are susceptible to lawsuits and penalties as well as losing zoning and permitting control over projects.
California's housing crisis
San Diego stands out as one of the stronger performers, having permitted 31,458 units from 2021 through 2024 — the most recent data available — toward a target of 108,036, achieving about 29% of its goal.
This "surge in supply" has pushed San Diego's vacancy rate to its highest level in more than 15 years, according to a CoStar research report. Asking rents declined last year for the first time since 2010, even as much of the new apartment inventory was in the luxury segment.
The city of San Diego boosted construction in part through elevated density allowances tied to the city's Complete Communities initiative that fuels construction near transit areas.
San Francisco, by contrast, has one of the toughest assignments and remains near the bottom based on progress, with roughly 5% of the 82,069 required units planned as of 2024. The city's average rents of about $3,469 per month are up 7% in the past year, with growth ranking among the nation's fastest.
Taken together, those figures suggest Los Angeles is not an outlier but part of a broader statewide struggle to translate housing policy into actual construction, even as demand and affordability pressures continue to mount.
Los Angeles' multifamily vacancy rate of 5.7% is well below the nation's average of 8.5%, while the region's average monthly rents of $2,346 is 32% above the U.S. average of $1,776.
About 19,000 apartment units are under construction in Los Angeles, down 1% from last year.
Developers point to a mix of headwinds — high construction costs, expensive labor, financing constraints, political friction and a slow entitlement process — that have made it increasingly difficult to get projects to turn a profit, thus, hindering construction starts.
ULA debate
That debate has increasingly centered on Measure ULA, a transfer tax on large property sales that developers say has pushed investment elsewhere. Housing advocates, meanwhile, argue broader economic forces are the bigger constraint on development.
“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,” said Southern California Association of Non-Profit Housing Executive Director Alan Greenlee in a statement.
City officials have rolled out new programs such as the CHIP program and Executive Directive 1 to speed affordable and transit-oriented housing, but Burton said those efforts will fall short if projects cannot move beyond approvals.
“People can’t move into a permit or live in a permit,” Burton said.
Burton said getting production back on track will likely require both reform of Measure ULA — potentially through a voter-backed ballot initiative — and broader structural changes at City Hall, including faster approvals, clearer rules and a more predictable development process.
He added that political leadership will be critical to making that happen.
“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,’” Burton said.
Regional housing gaps
Still, among the 88 cities within the county, the city of Los Angeles is not the furthest behind in its mandate to plan for more housing.
Most of these cities are also falling behind despite adopting new plans and encouraging denser development near transit and job centers.
Santa Monica has planned for just a fraction of its goal, and has already been susceptible to the so-called builder's remedy, a provision that gives homebuilders leverage over California cities and their zoning codes when cities lack an approved plan to meet housing development goals.
Builder's remedy proposals in Santa Monica have not yet translated into new construction.
Long Beach, often cited as one of the county’s more proactive jurisdictions, is leading the pack, with plans for nearly 17% of its targeted 26,502 units. Glendale, meanwhile, was already at 14% of its 13,425 target at the end of 2024.