Permitting adds 50 percent to land prices

How much do permitting burdens raise the price of housing? This is a big question in our housing work, and it can be hard to measure the exact contribution of zoning applications, historical preservation review, and other permitting processes to our housing shortage. Princeton’s Evan Soltas and MIT’s Jonathan Gruber found a clever way to get at the number: compare land in Los Angeles that’s pre-approved for development to land that isn’t pre-approved, and see how much permit approval raises the price of land. The answer: it raises the price by 50 percent!