L.A.’s Plan To Build Half a Million New Homes Is Drawing Major Developer Interest

Los Angeles' plan to build 500,000 new homes is speeding up the pace of new development, Mayor Karen Bass says.

About 28,500 new homes are now under development in the city, and 40% of them will be income-restricted affordable housing. She touted the progress Thursday, one year after the city signed its major rezoning initiative, the Citywide Housing Incentive Program, or CHIP.

Bass said the plan "streamlines approvals, reduces barriers, and prioritizes projects that include affordable housing and serve community needs, especially near transit and major corridors where growth makes sense.

"We still have much more work ahead, but this is real progress toward making Los Angeles more affordable and ensuring future generations continue to call this city home."

Los Angeles put forth the major rezoning project after middling housing production—the city added just 82,000 units from 2013 to 2021. So the goal was to build 456,643 homes by 2029.

To do that, the plan allowed more multifamily construction on what was previously single-family lots. It has programs that offer incentives for mixed-income and affordable housing. It also targets incentives to development near transit and on land owned by the public or religious organizations.

The one-year progress report L.A. released this week points to accelerating impacts of the law.

Developers quicken the pace

Single-family housing makes up 74% of the residential land in L.A. The plan, which took effect in February 2025, took aim at densifying parts of the city. California at large mandated "housing elements" like this for all cities, punishing those that refuse to adopt a similar plan.

The number of housing projects proposed in L.A. doubled to 242 in the first six months, based on plans submitted to Los Angeles City Planning and the Los Angeles Department of Building and Safety from February 2025 to February 2026.

And almost 60% of the proposed development is in Central Los Angeles and the south San Fernando Valley. That's a marked shift away from development that was more focused toward downtown L.A.

About 38% of the projects have affordability covenants. And about 57% are in "higher opportunity areas," which means they have access to transit, schools, and jobs. Nearly 90% of the homes are eligible for the city's streamlined approval process designed to speed up housing construction.

The plan had its detractors. Initially it was aimed at allowing more dense development across the entire city. But L.A.'s council eventually built in exceptions that carved out some exclusively single-family neighborhoods.

While that stifled suburban dissent, it also put more stress on the multifamily and commercial land where development is now concentrated, the L.A. Conservancy found.

UCLA's Lewis Center found the plan still concentrates development in some neighborhoods, not others. And on much of the land impacted by the law, development was already feasible.

L.A.'s housing market health

When the new projects do deliver, the hope is they will drive down housing costs in the country's second-largest city.

The median list price for a home in L.A. hit $1,185,226 in April, down 8.8% year over year, compared with just a 1.4% national decline. Realtor.com® data show the inventory hit 3,190 in April, but that might be more a matter of homes staying on the market for longer, not new homes entering the market.

Meanwhile, asking rents across Los Angeles-Long Beach-Anaheim reached $2,730 in January 2026, a drop of about 1.9% year over year. Rental vacancy rates in the metro fell slightly from 4.8% in 2024 to 4.4% in 2025. 

The city's also dealing with a number of other legal priorities that could impact that housing. Voters may consider ending the controversial "mansion tax." Real estate agents say that's prevented people from selling homes, locking up supply.

Developers eye red tape

Not every proposed development gets built. By comparison, L.A. normally approves about 20,000 homes a year.

Still, California builders have little doubt that red tape is the culprit in stalling housing development in the state.

Every California municipality has a little different set of rules, Thomas James Homes CEO Steve Schlageter told Realtor.com. The Aliso Viejo-based homebuilder is a specialist in single-lot homes using pre-approved housing plans and vertical integration to cut down on the timeline, and it got its start in L.A. and other Southern California cities.

Los Angeles has been friendlier to pre-approved plans, especially after last year's wildfires. That's helpful in getting projects through approvals faster as some areas of the West Coast require up to a year of permitting work. The developer hopes that experience is replicated by other cities.

"It can be incredibly complicated to go from one town to the next town," Schlageter said. "And California has a lot of layers." That includes environmental regulations at the state level, plus county, city, and neighborhood reviews. Many areas also deal with the Coastal Commission.