Development Approval Timelines, Approval Uncertainty, and New Housing Supply:Evidence from Los Angeles

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 timelines and uncertainty, housing production