While Los Angeles struggles to solve its housing shortage, San Diego has found success by creating a more inviting environment for construction. Over the last three years, San Diego has increased its new apartment construction by 10%, whereas Los Angeles has seen a sharp 33% decline, hitting an 11-year low.

This gap exists largely because San Diego has prioritized a streamlined, predictable approval process. By sticking to a clear "General Plan," the city allows projects to be approved quickly by staff if they meet existing rules, avoiding the long, politically charged delays common in L.A. City Hall.

Real estate experts and developers point to Los Angeles’ heavy regulations as a major deterrent for investment. Policies intended to help residents, such as strict rent control and the "mansion tax" (Measure ULA), often make projects financially unviable for builders.

In contrast, San Diego lacks traditional rent control and focuses on annual updates to its development codes to keep the process efficient. While L.A. lawmakers often add new layers of oversight to protect renters, economists warn that these extra costs ultimately discourage the very construction needed to lower prices.

Beyond local policy, both cities face broader economic challenges that make building difficult. High interest rates have made construction loans more expensive, while federal trade tariffs have driven up the cost of materials. Additionally, a tightened labor market—heavily reliant on immigrant workers—has made it harder to find the manpower necessary for large-scale projects.

Ultimately, San Diego’s "business-friendly" culture has allowed it to outpace other major California cities in housing growth. By providing a clear roadmap and fewer financial hurdles, San Diego has convinced the investment community to stay, while many developers have begun to view Los Angeles as too risky or complicated for new projects.