Report: L.A. residential permitting was historically weak in 2025

Last year in Los Angeles was marked by wildfires and political upheaval. It was also a historically weak year for housing construction in Los Angeles, according to a new report released by Hilgard Economics.

During 2025, just 8,714 new residential units were approved citywide - a marginal improvement over the 8,702 units approved during 2024. According to Hilgard Economics founder Joshua Baum, these were the second weakest years for residential permitting in Los Angeles since 2013, and fall well below the 13,000-units permitted annually between 2015 and 2022.

"Wildfires early in the year disrupted activity and strained capacity," writes Baum. "Elevated interest rates continued to suppress project feasibility. At the national level, the transition to a new federal administration introduced uncertainty around trade, tariffs, and immigration policy. over the summer, heightened immigration enforcement further unsettled parts of the construction workforce, while a sustained decline in filming activity softened the local economy more broadly."

Nonetheless, Hilgard found that permitting improved in each quarter of 2025, owing in part to a particularly dismal first quarter where construction was disrupted by the January wildfires. Nonetheless, Baum writes that the improvement as a slower decline rather than a recovery.

Continued concerns about interest rates, tariffs, and the stability of the local construction workforce are expected to weigh on production, as well as Hollywood's recent struggles. While recent changes to state law such as SB 79 have the potential to make changes, its impacts are not likely to be felt in the short term, and financing remains the most significant obstacle for most projects.

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