Development Approval Timelines, Approval Uncertainty, and New Housing Supply: Evidence from Los Angeles
53 Pages Posted: 26 Jun 2024
There are 2 versions of this paper
Development Approval Timelines, Approval Uncertainty, and New Housing Supply: Evidence from Los Angeles
Development Approval Timelines, Approval Uncertainty, and New Housing Supply:Evidence from Los Angeles
Date Written: June 18, 2024
Abstract
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.
Keywords: local land-use regulation, approval timing and uncertainty, housing production JEL Classification: R31
JEL Classification: R31, R38, R52, R14
Suggested Citation: Suggested Citation