Los Angeles Is Making a Major Bet on New Housing
For decades, Los Angeles has struggled with one of the most severe housing shortages in the United States. Skyrocketing rents, a deepening affordability crisis, and a growing homeless population have pushed the city to take bold action. Now, just one year after launching its landmark rezoning initiative, the Citywide Housing Incentive Program — commonly known as CHIP — Los Angeles is beginning to see real, measurable momentum. Mayor Karen Bass announced this week that approximately 28,500 new homes are currently under development citywide, a figure that signals the housing market is finally responding to the city's ambitious push to build 500,000 new homes by 2029.
This milestone represents a meaningful shift for a city that had long been trapped in bureaucratic inertia. From 2013 to 2021, Los Angeles added only 82,000 housing units — a pace far too slow to meet demand. The CHIP program was designed specifically to break through those barriers and unleash a wave of new construction, particularly in areas where growth makes the most economic and environmental sense.
What Is the CHIP Program and Why Does It Matter?
The Citywide Housing Incentive Program is Los Angeles' most sweeping rezoning effort in generations. Signed into law one year ago, CHIP fundamentally changes what can be built and where. Its core mechanics include streamlining the permitting and approval process, reducing regulatory barriers that previously made development slow and costly, and providing targeted incentives for projects that include affordable housing units.
One of the program's most consequential changes is that it allows multifamily residential construction on lots that were previously zoned exclusively for single-family homes. This single reform dramatically expands the pool of land available for new housing across the city. Rather than limiting dense housing to already-crowded corridors, CHIP opens up entire neighborhoods to gentle densification — adding duplexes, small apartment buildings, and mixed-income complexes where only one house once stood.
CHIP also prioritizes development in specific strategic locations, including areas near public transit hubs and major commercial corridors. The logic is straightforward: building homes where people can walk to a bus stop or subway station reduces car dependency, eases infrastructure costs, and creates more livable, connected communities. Additionally, the program offers enhanced incentives for development on land owned by public institutions or religious organizations, unlocking underutilized parcels that have sat idle for years.
40% Affordable Housing: A Commitment Built Into the Plan
Perhaps the most striking figure in Mayor Bass's announcement is this: of the 28,500 homes currently in development, 40% will be income-restricted affordable housing. This is not an accident. CHIP was deliberately structured to reward developers who include affordable units in their projects, creating a financial incentive aligned with the city's social goals.
Affordable housing in Los Angeles has historically been left to nonprofits and government agencies operating with limited resources. By bringing private developers into the equation through tax incentives, density bonuses, and expedited approvals, CHIP aims to scale affordable production far beyond what the public sector could achieve alone. If the 40% ratio holds as development continues, the city could add tens of thousands of income-restricted units over the next several years — a transformative shift for low- and middle-income Angelenos who have been priced out of the market.
Developer Interest Is Accelerating
The one-year progress report released by the city this week paints a picture of a development community that is increasingly engaged with the new framework. Builders, investors, and mixed-use developers are submitting applications and breaking ground at a pace that outstrips prior years. The simplified approval process is a key driver — time is money in real estate development, and reducing the months or years it used to take to navigate L.A.'s notoriously complex permitting system makes projects financially viable that would otherwise have been shelved.
Larger developers with the capital to take on multifamily projects are particularly interested in the transit-adjacent incentives, where higher density allowances translate directly into more units per acre and stronger returns. Smaller builders and community-based developers, meanwhile, are drawn to the single-family rezoning changes that allow two, three, or four units on previously restrictive lots without requiring massive capital outlays.
Challenges That Still Lie Ahead
Mayor Bass herself acknowledged that there is still substantial work to be done. Building 500,000 homes by 2029 is an extraordinary undertaking, and the city remains well short of that target. Construction costs in Los Angeles remain among the highest in the nation. Labor shortages in the building trades, rising material prices, and the complexity of developing infill sites in a dense urban environment all pose real obstacles.
Community opposition to new density — the so-called "not in my backyard" or NIMBY response — also remains a political challenge. Some neighborhoods have pushed back against zoning changes, particularly in wealthier single-family enclaves that have resisted densification for generations. CHIP provides legal and procedural tools to override some of these objections, but local resistance can still slow individual projects significantly.
Infrastructure capacity is another concern. Adding hundreds of thousands of new residents requires commensurate investment in water, sewer, roads, schools, and public transit. Critics argue that the city has not yet outlined a fully funded infrastructure plan to accompany its housing ambitions.
What This Means for Prospective Homebuyers and Renters
For ordinary Angelenos looking to buy or rent, the CHIP program offers cautious optimism. More housing supply, delivered at a range of income levels, should over time ease the extreme pressure on rents and home prices that has made Los Angeles one of the least affordable cities in the country. The 40% affordable set-aside means that a meaningful portion of new units will be accessible to households who earn below the area median income.
- Renters in transit-rich neighborhoods may see new supply enter the market within the next two to three years as projects currently in development reach completion.
- First-time buyers may find new opportunities in smaller multifamily buildings on formerly single-family lots, particularly in mid-tier neighborhoods.
- Households qualifying for income-restricted units should watch city and nonprofit portals for new affordable housing lotteries as CHIP-funded projects come online.
The Bigger Picture: A Model for Other Cities?
Los Angeles is not alone in facing a housing crisis, and the CHIP program is being watched closely by planners and policymakers in other major American cities. New York, San Francisco, Seattle, and Austin have all grappled with similar tensions between housing demand, affordability, and neighborhood character. CHIP's early results — particularly the speed with which developer interest has materialized — could offer a replicable blueprint for cities willing to make politically difficult rezoning decisions.
The program's emphasis on transit proximity, mixed-income development, and simplified approvals reflects a broad consensus among urban planners about what effective housing policy looks like. Whether Los Angeles can execute at the scale required to meet its 2029 goal remains to be seen, but the first year of CHIP has demonstrated something important: when cities remove barriers and offer clear incentives, the private market responds. For a city that has long promised more housing than it delivered, that response is long overdue.