In the time it takes for a developer in Boston to get permission to build a house, a developer in Indianapolis has not only secured permits, hired construction workers, and bought materials — they’ve also finished building the house.
Though YIMBYs have long argued that unduly stringent local permitting processes are choking off housing supply in the highest-demand cities, a lack of good, standardized data has made this difficult to demonstrate with hard numbers.
That’s why the debut of a single, centralized database tracking permitting for homebuilding across the country is cause for celebration. In a new paper, Leonardo D’Amico, Evan Soltas, and Audrey Wang were able to collect data on how long it takes for permits to get approved in 60 major cities and calculate the average permitting duration for different types of projects.
Their findings confirm the conventional wisdom: It takes longer to build in cities with slower permitting, and those cities have higher rents and less building. The authors are also able to disentangle just how much permitting contributes to slower homebuilding. When it comes to housing project completion, “30 to 43 percent of the difference between the slowest and fastest cities is due to differences in the time to receive a permit, rather than in the time to actually build,” they wrote.
In the cities with the slowest permitting processes — San Francisco, Miami, and Boston — permitting alone takes longer than the entire construction process takes in the fastest cities (Indianapolis; Little Rock, Arkansas; and Oklahoma City).
Naturally, the longer it takes to get permits, the longer it takes to build an individual house or apartment building. That, in turn, means that it takes longer for the supply of housing to catch up to demand, keeping prices high. And since housing development is often debt-financed, longer project times mean higher interest payments for developers. Developers then pass on those elevated costs to buyers or tenants to make their money back.
The authors’ findings depict a country that, as a whole, appears to be heading in the wrong direction when it comes to the speed of homebuilding. While average total project duration time has fluctuated from year to year, permitting steadily slowed between 2000 and 2023. That dynamic has reversed in recent years, but it’s not clear why permitting durations fell or whether they will continue to do so.
The optimistic explanation is that permitting durations have fallen post-pandemic as a result of state- and local-level YIMBY reforms. The pessimistic view is that even now, permitting still takes longer than it did in 2000.
The housing holdup, by the numbers
It’s no secret that Phoenix is cheaper than Boston. Comparing rents across American cities has long been possible for economists (and noneconomists, thanks to Zillow). But until now, no one could compare permitting time and total construction duration across cities.