After a rough start to 2025, the year's second quarter brought some rare good news for housing production in Los Angeles.

A new report from Hilgard Economics found that residential permitting in Los Angeles was up in the second quarter of 2025, following a first quarter which was bogged down by the January wildfires. Between April and June, the City of Los Angeles permitted 1,816 new residential units, which was a 37 percent jump over the first quarter - and a 4.2 percent increase over the same quarter in 2024. Combined with the first quarter tally of 1,325 residential units, the City has permitted 3,141 homes thus far in 2025.

Per Hilgard Economics, developers continue to face headwinds in the form of high interest rates increased construction costs, tariff threats, immigration enforcement, and an ever-convoluted regulatory environment. Bright spots which have emerged include fast-tracked reviews with additional staffing to support the rebuild of Pacific Palisades after the wildfires, as well as complimentary local and state directives which have forced faster approvals and stripped away layers of review.

Total permitted residential units by the City of Los AngelesHilgard Economics

Nonetheless, the outlook for the future remains murky. 

"The tremendous level of uncertainty right now in the economy - primarily driven by DC - is very real," said Hilgard Economics principal Joshua Baum in a statement.

Hilgard Economics points to the recent "One Big Beautiful Bill," passed by Congress and signed by President Trump, which will cut billions from social safety net programs, and will likely worsen housing insecurity. 

Likewise, the Trump administration's immigration raids in the Los Angeles area have impacted housing production, as much of the region's construction workforce is of Latino and immigrant backgrounds. The report notes that contractors have complained of labor shortages and increased delays, resulting in greater uncertainty. 

Finally, the administration's pressure on the Federal Reserve has impacted credit markets. Hilgard Economics notes that concerns about the central bank’s continued independence could result in less access to capital, further limiting financing for new residential developments.

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