Development Approval Times and New Housing Supply: Evidence from Los Angeles

Abstract

We provide credible estimates of the effect of local regulatory approval times on the rate of housing production. The analysis derives from a novel data set of development timelines for all multifamily housing projects permitted by the City of Los Angeles between 2010 and 2022. As a lower bound, we estimate that reductions of 25% in duration and uncertainty of approval times would increase the rate of housing production by 13.5%, simply by pulling forward in time the completion of already started projects. An accounting for the role of approval times in incentivizing new development results in even greater production gains.  Discretionary approvals are shown to be especially salient in driving long development times. Results support the notion that municipal regulatory reform is important to the achievement of housing production goals.

Keywords: local land-use regulation, approval timing and uncertainty, housing production JEL Classification: R31

JEL Classification: R31, R38, R52, R14