Los Angeles ED 1 Streamlining Delivers Few Permitted Units

Streamlining Reveals Delivery Gaps

Los Angeles’ ambitious push to cut red tape for affordable housing through Executive Directive 1 (ED 1) triggered a notable wave of approved projects. Bisnow reports that since the policy launched in 2022, the city has racked up more than 43,300 proposed units and rapidly signed off on nearly 34,000 of them. Yet, only 8,058 units—or just 23%—have actually made it to the permit stage as of May, falling far short of on-the-ground delivery expectations.

This mismatch between approvals and permits signals execution is lagging far behind entitlement. According to Century Housing Corp. Vice President Tracey L. Burns, even the fastest approvals can’t guarantee shovels in the ground if financing and market fundamentals don’t line up. With persistent construction cost inflation, higher rates, and location misalignments, LA’s efforts show streamlining is only one part of solving the affordable housing crisis.

The Limits of Fast-Tracking Entitlements

ED 1 was envisioned as a panacea for LA’s notorious planning slowdowns. State and local officials promoted it as a clear path to unlocking supply. Yet as approvals stacked up, distinct hurdles emerged. Many developers’ projects stalled after approval due to rising development costs or lack of committed capital. Others realized post-approval that their sites weren’t positioned to attract renters at affordable rates, especially where deed-restricted rents were on par with, or even above, market-rate options.

Experienced affordable housing builders with secured funding—like some working with Century Housing—were far more likely to advance through permitting and construction. Newer entrants or market-rate groups dabbling in affordable units often encountered speed bumps, from cost overruns to operational gaps.

The Details

Mayor Karen Bass’ office said ED 1 received 43,300 affordable units, but only 8,058 had permits by May. That approval-to-permit gap remains wide. Century Housing financed one clear example: a 44-unit Sawtelle project from Generation Real Estate Partners. The deal served moderate-income renters earning up to 120% of AMI. Rents ran $1,800–$2,100, below $2,100–$3,200 market comps on Apartments.com.

The project entered preconstruction in about 12 months, but neighbor appeals and CEQA litigation delayed permits. Eventually, HACLA acquired the project for $16.7M, or about $379K per unit. Similar stories have emerged citywide. At least six permitted ED 1 projects are now for sale, not under construction. Several sit in North Hollywood and South LA, where targeted rents often exceed local market rates. That mismatch creates problems for lenders, developers, and renters.

Location and Market Realities Stall Progress

ED 1 projects face a persistent geography problem: supply often misses demand. Many projects moved forward in submarkets where 80–120% AMI rents exceeded local market rents. That mismatch looks sharper as LA multifamily rent growth lags, limiting room for affordable rents to underwrite deals. That makes units too costly for some renters and less appealing to others. It also weakens lender interest and complicates underwriting.

Generation Real Estate Partners’ Steven Scheibe said ED 1’s upzoning created real value. However, it did not offset operational complexity or location-capped returns for his market-rate firm. Meanwhile, rising construction costs and interest rates continue to stall projects after approvals. New state and local incentives also compete with ED 1. As a result, Burns sees fewer ED 1 projects than in 2023 or early 2024.

Why It Matters

Los Angeles framed ED 1 as a breakthrough for removing planning bottlenecks. Yet the results show faster approvals alone cannot deliver affordable units at scale. Mayor Bass’ office said only 23% of approved units have reached permit. Even fewer have started or completed construction. Higher construction costs, financing gaps, and poor site-market fit continue to slow delivery.

The city now has a large affordable pipeline on paper, but limited real progress. Projects struggle most where deeded affordable rents sit close to open-market rents. In those areas, lenders see less upside and end-user demand looks weaker. Developers now list shovel-ready sites instead of breaking ground themselves. For other cities, ED 1 offers a clear lesson. Entitlement reform must pair speed with execution support and real demand alignment.

What’s Next

With ED 1 now permanent but enthusiasm waning, the market’s focus is shifting toward new incentive programs offering faster timelines and greater certainty—especially those minimizing litigation risk. Several state and local policies launched post-2024 are drawing developer and lender interest away from ED 1, with some market-rate operators returning to more traditional paths or tools that offer comparable speed. Unless LA can address the underlying financial and market hurdles in its affordable housing pipeline, quick approvals may continue to outpace real delivery, with policy tweaks and funding solutions the next battlegrounds for progress.