In the first quarter of 2025, Los Angeles saw a dramatic 57% decline in housing construction permits compared to the previous year, attributed to high interest rates, tariffs, economic uncertainty, and city tax measures. The wildfires in January likely disrupted the construction sector further. These declines notably affected the San Fernando Valley and South Los Angeles. With a continuing downturn in development, which had already decreased by 23% in 2024, experts warn that this trend may lead to increased prices and rents in the future, compounding the city's affordability crisis.
Developers pulled permits for 1,325 new homes in the city of L.A. during the first three months of 2025, down nearly 57% from the same period a year earlier.
Hilgard principal Joshua Baum said the January wildfires likely also played a role by causing widespread business disruptions.
If we aren't building now, from a long-run perspective, that says higher prices and higher rents at some point in time in the future.
A sustained pull back in housing development could have big implications for a city in the throes of an affordability and budgetary crisis.
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