Officials plan to build bigger, denser housing, but critics say plans fall short of goals
Los Angeles hopes to encourage developers to build more multifamily projects along commercial corridors like The Jagger in the Palms neighborhood. (CoStar)
CoStar News
February 11, 2025 | 2:34 P.M.
Los Angeles officials have approved a rezoning plan to encourage more housing development in already dense areas to help increase inventory and ease affordability concerns in one of the nation's most populous cities.
The Los Angeles City Council unanimously approved the Citywide Housing Incentive Program, or CHIP Ordinance, last week, after two years of debate. The ordinance lets developers build taller and denser multifamily properties if they locate them near public transit and include a certain percentage of affordable units. Projects that are 100% affordable get bonus incentives.
The plan is a "game changer" for the city and state of California, serving as a foundation for "ensuring development is possible and affordable units are actualized,” said Vince Bertoni, Los Angeles city planning director, at a December meeting of the Los Angeles City Council.
The ordinance, part of the city’s plan to address California’s affordable housing crisis by making room for 450,000 new units of housing by 2029, allows developers to build new apartments along major street corridors and in some communities with mixed zoning regulations.
It excludes single-family neighborhoods, despite a prior attempt to extend the ordinance to such regions. Local neighborhood groups including the Hancock Park Homeowners Association were vocal opponents of such an extension.
Los Angeles is just one of the major U.S. cities rezoning to make room for more housing. Pittsburgh, for one, is changing zoning to encourage more mixed-use development and more affordable housing in new multifamily developments.
Not enough
Critics say the ordinance won't have much impact because it exempts many single-family-home neighborhoods from development, unless a property is owned by a public agency or a faith-based organization.
A study by UCLA researchers found that the ordinance would likely generate just 30% of the homes the city needs without including single-family areas. Single-family zones make up more than 70% of the city's residential-zoned land, according to the study.
“Expanding CHIP into single-family zones is a critical step toward achieving the affordability and abundance we desperately need," said Andrew Slocum, a principal at Pasadena-based multifamily developer Green Development Company and board member of pro-housing development political group YIMBY Action, in a statement.
The CHIP Ordinance should be just one of many tools the government uses to make housing more plentiful and affordable in the state, said Moussa Diop, associate professor at the USC Price School of Public Policy. He called for more state and federal incentives and a more tailored approach to development than simply making dense areas even denser.
“We need really very aggressive policies to add more supply, and we are not seeing that right now,” Diop told CoStar News. Solving Los Angeles' housing woes "is not just about allowing for more density.”
About 20,000 multifamily units are currently under construction across Los Angeles, down 16% from a year ago. That compares to Boston, where multifamily construction is up 5% year-over-year, and Miami, where it's up 13% year-over-year.
Los Angeles asking rents are up slightly year-over-year to $2,309 per month, compared to the national average of $1,741 per month.
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