We provide credible estimates of the effect of duration and uncertainty in local regulatory approval times on the rate of housing production. The analysis derives from a novel dataset of development timelines for all multifamily housing projects permitted in the City of Los Angeles between 2010 and 2022. As a lower bound, simply by pulling forward in time the completion of already started projects, we estimate that reductions of 25% in approval time duration and uncertainty would increase the rate of housing production by 11.9%. If we also account for the role of approval times in incentivizing new development, we estimate that the 25% reduction in approval time would increase the rate of housing production by a full 33.0%. Both the expected value and the uncertainty in approval times are salient to incentivizing new development. The results provide new evidence that local approval processes are a significant driver of housing supply and reinforce the notion that municipal regulatory reform is an important component of housing reform.
How true! Describes a situation similar to the Israeli approval regime. If California, the most advanced state in the world, cannot solve this problem, what can we do?
אם בַּאֲרָזִים נָפְלָה שַׁלְהֶבֶת – מַה יַּעֲשׂוּ אֲזוֹבֵי קִיר?
Illustration: Israel - a partial list of forms to be submitted for a municipal approval.
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