In my childhood, the concept of “endangered species” evoked beautiful, threatened creatures in desperate need of saving—your pandas, whales, or all-American bald eagles. It’s now become synonymous with development projects held up over some obscure frog no one cares about. In one particularly hilarious reversal of fortune for the environmental movement, scientists recently discovered that the snail darter, a controversial fish species that delayed a major dam project in the 1970s, isn’t even a unique species.
In a new paper for the Journal of Public Economics, economist Maxwell Tabarrok traces how the ever-expanding list of species that America considers endangered affects housing permits. He finds a substantial effect: “species listings reduce annual permit flows by 0.5 permits per thousand residents, about 10% of the average annual flow.”
That’s somewhere around 9 million housing permits affected in total, most of which appear to have been lost, not merely moved elsewhere, in Tabarrok’s estimation. In other words, the Endangered Species Act is one factor constraining housing supply—having cost us perhaps 4 percent of the total stock at this point—and driving up prices.
The act, Tabarrok explains, makes it illegal to “harm” or “harass” a listed animal. This can include not just paving over its territory, but even light pollution and stormwater runoff. When a species is listed, building projects in areas where it lives can require modifications, be called off entirely, or never get off the ground to begin with.
To quantify the effect on building permits, he combines permit data from a census survey with data on species listings and habitats—a large undertaking that involves matching different types of geography and jurisdictions.
In 1970 there were only 82 endangered species. Two decades later the number was getting close to 500. Last year it reached nearly 1,500. Endangered-species habitats now cover most of the U.S., often overlapping with each other, and they especially blanket California and Florida.
That might be bad news for development, but it also facilitates the use of modern statistical methods: each time a new listing affects some parts of the country but not others, it creates a sort of natural experiment—did permitting trends suddenly change in the affected places relative to others?
Focusing on the 1980-2024 period, Tabarrok implements this basic concept in a few different ways, with similar conclusions. His various approaches make different technical tradeoffs and vary in how they try to address the study’s biggest limitation—namely, that endangered-species listings might not be a random shock to development that can be analyzed as an experiment. For example, earlier development might cause a species to become endangered or prompt lobbyists to push for or against new listings (though this decision isn’t supposed to involve consideration of economic impacts). Or, places that are home to endangered species might simply be different, in important ways, from places that don’t.
Tabarrok also digs into a few smaller questions. For example, he finds no effect from listings that are merely proposed and not yet enforced and a reversal of the effect when a species is de-listed. Adding satellite data on land use to his dataset, he finds similar effect on “greenfield” projects on undeveloped land versus “infill” projects in already-developed areas—which is interesting, as the latter type of project will generally be less of a change to the overall habitat.
There is, of course, a real tradeoff between building enough housing where people need it and protecting species we’re in danger of losing. But with endangered-species habitats blanketing the country and millions of housing projects lost, perhaps we’ve let environmentalists win some battles they should not have.
From the Manhattan Institute
Daniel Di Martino proposes a better approach to investor immigration (which you may know as Trump’s Gold Card).
Other Work of Note
When unions raise wages, how is that cost spread across consumers, shareholders, and productivity improvements that reduce the amount of work needed? Also, how product innovation affects worker earnings, and how wage changes spill over across sectors.
Some good news: The Foundation for Individual Rights and Expression finds a record-low number of the most problematic speech restrictions on college campuses. It still ranks most schools a “yellow light” rather than green, though.
Big Institute for Progress report on the ROAD to Housing Act, stressing the crucial role of state and local decisions.
A risk-scoring algorithm for child-maltreatment cases seems to identify high-risk kids well without increasing racial disparities.
The effect of H-1B workers on the economy.
A study on abortion bans and adolescent girls’ mental health, and a critique.
How do “viewpoint diversity” requirements for colleges mirror the old Fairness Doctrine for broadcasters?
Analyzing the foreign demand for U.S. Treasury securities.
Within states, schools with poorer students get more funding (though poor states spend less than rich ones).
Was New York’s “Summer All Out” policing initiative less effective than we thought?
A decade’s worth of data on ICE arrests.
Are cops ready for criminal and terrorist drones?
Predicting who will commit sexual offenses against children.
Some survey data on school cell phone bans.
How tax rules about capital expensing affect which projects are worthwhile.
Interesting new findings on marriage, assortative mating, and wealth inequality. But when did mammals start living in pairs?
Thousands of young men talk about their lives.
Which states ban hair discrimination?
How does minimum wage affect the number of people who apply for low-wage jobs?
Does early-life sugar intake have long-term effects on behavior and health?
Don't demagogue against ecosystem conservation. The real threat to the housing market comes from restrictive zoning laws and NIMBYism. We need to protect endangered and vulnerable species, but not Karens who don't want dense affordable housing or mixed-use development in their suburbs.
Yes, and by design.