Los Angeles approves fewer residential permits in 2024

The City of Los Angeles has permitted far fewer homes this year, despite demand.

From January through June, the city approved permits to build 5,208 homes, 18.9 percent fewer than the first half of last year, Urbanize Los Angeles reported, citing figures from a study by Hilgard Analytics and Zenith Economics.

The decrease works out to 1,216 fewer homes in the L.A. pipeline compared to last year.

The sharpest drop-offs were in Council District 1, representing Downtown and northeast L.A.; District 4, from Sherman Oaks to Griffith Park; District 10, from Koreatown to Mid-City; District 13, from Monterey Hills to Echo Park; and District 15, in San Pedro.

Council Districts 3, 6, 7 and 12 in the San Fernando Valley all saw increases, according to the report.

The plunge in permits this year accelerates the drop last year, when Hilgard found that the number of housing permits fell 5.3 percent from the first half of 2022.

Los Angeles approved 12,370 building permits last year, compared to 15,593 building permits in 2022.

While last year’s study said the downturn in home construction could be temporary, the authors this year were less optimistic.

“The continued fall in citywide permitting is somewhat unexpected as interest rates have leveled off, local employment numbers have continued to climb and it was theorized that developers might adjust to Measure ULA by now,” Joshua Baum of Hilgard Analytics and Samuel Maury-Holmes of Zenith Economics wrote.

“Even if the pace of residential permitting were to improve going forward, the shortage of deed-restricted affordable housing, historic redlining and other exclusionary policies will keep L.A,’s housing and homelessness challenges acute for an extended period.”

The study also dove into the number of housing units developed using the Mayor’s Executive Directive 1, which streamlines the approval of 100-percent affordable housing projects.

The directive dubbed ED1 has accounted for much of the city’s residential development pipeline over the past two years, according to Urbanize.

The authors found that while more than 10,000 residential units have been approved using ED1, just 588 units have been permitted citywide in the first half of 2024.

That’s a jump from the 84 ED1 units permitted in the first half of last year, when the directive was still new.

The study “identified 25 projects that received ED1 approval and have also received permits for demolitions or grading, which are often intermediate steps taken before the final construction permit, alongside many more ED1 eligible projects which are still going through the approval and permitting processes.”

Homebuilding permits across the Golden State fell last year, but not as fast as across the U.S., according to a March study by the National Association of Home Builders. California developers filed permits for 111,221 homes last year, 6 percent fewer than in 2022.

At the same time, builders in 49 states and the District of Columbia pulled 1.26 million permits, 11 percent fewer than the year before. Nine states had increases. California ranked third among states for the number of permits filed last year.

— Dana Bartholomew