Important note
This article is general information based on public reporting and government sources, current as of August 2026, not investment or legal advice. Entitlement status, financing conditions, and city policy can change. Confirm current status directly with LA City Planning before relying on this for an active transaction.
Mayor Bass’s Executive Directive 1 cut affordable housing approval timelines from nine months to weeks, generating approvals for over 29,000 units. But as of mid-2026, fewer than a quarter of ED1-approved units have secured building permits. A wave of early speculation, followed by rising interest rates, means a real number of fully entitled ED1 sites are now for sale rather than under construction.
An entitlement isn’t a building. That gap is exactly what’s playing out across Los Angeles right now, and it’s creating a genuinely unusual acquisition category for buyers paying attention.
What ED1 Actually Did
Executive Directive 1, issued by Mayor Karen Bass in late 2022, lets 100% affordable housing projects bypass public hearings and City Council votes entirely. The result was dramatic: approval timelines dropped from roughly nine months to a few weeks, and by 2025 developers had submitted proposals for more than 35,000 units, securing approvals on over 29,000 of them, more than in 2020, 2021, and 2022 combined. On paper, that’s one of the most effective housing policies the city has run in years.
Why So Little of It Has Actually Been Built
The permit numbers tell a different story. As of mid-2026, Bisnow reports that just 23% of ED1-approved units have secured permits, a wide gap between how fast the city approves these projects and how many actually break ground. Three things explain most of it:
- Speculative entitlement. Some applicants pursued ED1 approvals specifically to sell the entitled land at a premium rather than build, which pushed up land prices for everyone who came after them.
- A financing environment that shifted underneath approved projects. Interest rates rose, and construction costs climbed after the earliest approvals, and underwriting that made sense in 2023 often doesn’t pencil in 2026 without fresh capital.
- Small developers without the balance sheet to adapt. Owners who entitled modest six- or seven-unit projects are the ones most likely to sell rather than absorb that shift, since they typically have less room to re-underwrite a stalled deal.
One of the earliest and most visible examples is a 75-unit site at 1228-1238 S Normandie Ave, fully entitled in January 2023 as one of the first projects approved under the directive.
The lot sat empty for years and is now on the market rather than under construction, a fairly literal illustration of the gap above. If you’re weighing whether a specific opportunity like this actually pencils, our guide on how to analyze multifamily investment opportunities in Los Angeles walks through the underwriting questions that matter most.
The Opportunity Hiding in the Backlog
For a buyer with real capital and construction experience, a stalled ED1 site is a different proposition than raw land. The entitlement work, often the slowest and most uncertain part of any development, is already done. What’s changed is simply who can execute from here.
We work with buyers actively looking to acquire in Los Angeles on exactly this kind of opportunity, where the real due diligence question isn’t whether the entitlement is real, it’s whether current construction costs and available financing still make the project work as approved, or whether it needs to be re-underwritten from scratch.
The Regulatory Wrinkle Worth Knowing
ED1 briefly allowed projects in single-family zones to use the streamlined pathway before community pushback closed that door, leaving eight projects in a contested legal limbo that a pro-housing group is still litigating. It’s a reminder that ED1’s scope has shifted since 2022 and continues to shift, so confirming a specific site’s current eligibility, not just its original approval, matters before assuming a deal is as straightforward as it looks.
The zoning tension underneath all of this connects directly to a pattern we’ve covered before: 72% of Los Angeles is zoned for single-family homes, which is exactly why a directive aimed at the other 28% keeps running into political friction at its edges.
We Track Where the Entitlement Backlog Is Creating Value
Hi, I am Max Berger, a multifamily broker at Compass in Los Angeles. Policy shifts like ED1 move value quietly, long before most owners or buyers notice. See how past deals came together on our success stories page, or browse current property listings. Contact me or call (818) 321-4972 to talk through a specific opportunity.