New Data Shows a 37% Quarterly Jump in Residential Permits, Long-Term Uncertainty Looms
Residential development in Los Angeles picked up in the second quarter of 2025, following a sluggish start to the year attributed to the January wildfires, according to a new report from Hilgard Economics.
From April through June, the city approved 1,816 new residential units — a 37% increase over the first quarter and a 4.2% gain compared to the same period last year. This brings the total number of residential permits issued in 2025 to 3,141.
While the latest figures offer a glimmer of optimism for housing advocates and developers alike, Hilgard Economics cautions that major challenges remain. High interest rates, construction cost inflation, threatened tariffs, labor shortages intensified by immigration enforcement, and a complex regulatory environment continue to hamper the region’s ability to build at scale.
Some areas, however, are seeing incremental improvements. The report highlights expedited permitting in fire-affected neighborhoods like Pacific Palisades, where the city has deployed additional staff and streamlined reviews. State and local mandates pushing for quicker approvals have also contributed to the uptick in activity.
Despite these gains, Hilgard warns of longer-term risks. The recent passage of the “One Big Beautiful Bill” — a sweeping federal budget measure signed into law by President Trump — is expected to slash funding for social safety net programs, which experts say could further exacerbate housing insecurity across Southern California.
Additionally, the report flags growing concerns over political pressure on the Federal Reserve, which could destabilize credit markets and make it more difficult for developers to secure financing.
