When ED1 was signed into law at the end of 2022, it felt like the floodgates were finally opening for affordable housing in Los Angeles.
Developers rushed in. Permits were filed. Projects moved.
Now, a little over 3 years later, the first wave is delivering. So what’s the issue?
These deals were underwritten assuming low-income tenants would be placed using government vouchers.
But in 2025, LA hit a budget shortfall and stopped issuing new vouchers. That changed the math completely.
Those projected ~$2,400 rents are, in many cases, closer to ~$1,700. On a 50-unit deal, that’s a few million dollars in erased equity.
We've had that exact conversation with countless owners.
The result?
The market is now full of RTI sites — vacant land with approved plans that no longer pencil. We're seeing developers exit these deals at roughly $25k-$40k per buildable unit.
ED1 created opportunity, but without consistent voucher support, a lot of these projects are now sitting in limbo.
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