We provide reliable estimates of the impact of timing and uncertainty in the timing of local regulatory approvals on the rate of housing production. The analysis is based on a novel dataset of development times for all multifamily housing projects approved in the City of Los Angeles between 2010 and 2022. As a lower bound, by simply moving forward with the completion of projects already started, we estimate that a 25% reduction in approval time and uncertainty would increase the rate of housing production by 11.9%. If we also account for the role of approval periods in stimulating new development, we estimate that a 25% reduction in approval periods would increase the rate of housing production by 33.0%. Both the expected value and the uncertainty in approval times are important in motivating new developments. The results provide new evidence that local approval processes are an important driver of housing supply and reinforce the idea that bylaw reform is an important part of housing reform.
That’s according to a new research paper by Stuart Gabriel and Edward Kung, with lead author Kevin Lewis. Speed also affects overall coverage! (roof)
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