Environmental Regulations Create Higher Housing Costs


Environmental regulations are necessary for many reasons but they are increasing the cost of housing in two ways, first by reducing available land, and second by causing the entitlement process to be drawn out and costly. This has gotten progressively more challenging despite the best intentions of governmental authorities and repeated attempts to streamline the permitting process. In many urban areas of the United States obtaining the necessary entitlements has become a 5-10 year process, and costly. Little is reported in the press or elsewhere on this important topic, but I came across an interesting report on the subject written by Professor David Sundling of UC Berkley that you can view/download by following this link. An excerpt of the title page is below.

The Economics of Environmental Regulation of Housing Development

Written by

Professor David Sunding
College of Natural Resources
Department of Agriculture and Resource Economics
UC Berkeley

Conflicts over protection of biodiversity and other environmental amenities seem to be at their strongest when housing development is at issue. Housing affordability has emerged as a major national policy issue, and is seemingly in conflict with other mandates to protect and enhance environmental quality. Despite this apparent policy conflict, and despite the enormous potential wealth transfers resulting from environmental regulation of land use changes, it is somewhat surprising that there are relatively few papers linking these two problems. The paper reviews some of the issues arising from environmental regulation of housing development, and highlights a number of areas for future research.