There are many options in Los Angeles with regards to pre-fabricated homes. Many of them are considered green/eco friendly as building pre-fab homes creates less waste than normal construction.
This month there is the 5th Annual Ca-Boom at Barker Hanger in Santa Monica. There will be many local prefab home sellers there and if it's something you are considering doing I highly recommend it.
Prefab homes are allowed in Los Angeles and it's growing more and more popular all the time. It requires the same permits as building a regular home.
Ahaa! A prefab home supplier can actually cut through the massive ordeal with the city, making your life a GREAT deal easier, but is still confusing. The prefab supplier provide a set of plans for the prefab and also "siting" or generic installation drawings. You add a specific site plan with topo and other information and presto! you are ready to submit to the city. It is best to hire a person to prepare this site plan(about $6k), because the "city" is VERY particular on the content and format, and they will hand it back to you telling you it is wrong, but with NO info on what to do to fix it, (for liability reasons). Once permitted you will pay the siting person about $30k to place the prefab. My friend paid $60k for a large one.
So, find a lot, buy the smallest home you can get by in (it is a lot easier to "site") and get started. The deposit is put into escrow, and it is murder to get it back, since the supplier has to release it, and they WIL L NOT, so delay at least a couple of weeks while you find someone to do the site plan, and go over to the city to have them stand there and stare at you, intentionally not saying anything due to liability. They probably also require a soils report (abotu $4k from an engineer), but you can fight it and win in a year.
Beware banks do not loan on prefabs - it is a cash deal.