America's permitting system is a significant contributor to the rising cost of living, hindering the supply of essential goods and services and increasing prices for consumers, according to an analysis.
Complex and lengthy approval processes for housing, energy infrastructure, and manufacturing facilities create delays that translate into higher costs. These delays, often spanning years due to overlapping federal reviews, duplicative agency requirements, and litigation, increase financing and construction expenses. Investors then demand higher returns, and these accumulated costs are ultimately passed on to consumers through higher rents, home prices, utility bills, and more expensive goods.
This dysfunction is largely attributed to decades of expanding procedural requirements under the National Environmental Policy Act (NEPA). While initially intended to ensure informed environmental decision-making, NEPA has evolved into a system that frequently delays projects without necessarily yielding better environmental outcomes. The process can involve endless paperwork, reviews across multiple agencies, and prolonged legal challenges, even after thorough environmental analyses are completed.
The consequences of these delays are widespread. For housing, this means fewer new homes entering the market, driving up prices and rents for families already struggling with affordability. In the energy sector, delayed transmission lines and pipelines can lead to more expensive and less reliable electricity. Similarly, delayed factory construction can push investment and jobs to other countries with more predictable regulatory environments.
The Mountain Valley Pipeline project serves as an example, experiencing nearly a decade of delays due to litigation under NEPA, the Endangered Species Act, and the Clean Water Act before Congress intervened. In California, redevelopment of the former Mare Island Naval Shipyard, envisioned to include thousands of homes, has been stalled for decades by environmental remediation and federal oversight issues.
Fixing the permitting system does not necessitate compromising environmental standards. Proponents of reform argue that maintaining high environmental standards for clean air, water, and public lands is compatible with requiring government agencies to make timely decisions. Endless procedural delays are seen as rarely leading to cleaner environments and more often discouraging investment and inflating costs.
Several bipartisan proposals are currently before Congress, aiming to modernize the permitting system while preserving environmental protections. These include measures like the SPEED Act, the FREEDOM Act, and the PERMIT Act. The proposed reforms generally focus on establishing reasonable deadlines for agency decisions, improving coordination among federal regulators, limiting opportunities for duplicative litigation, and increasing regulatory certainty. These changes are intended to make it easier to build projects without weakening environmental safeguards.
Permitting reform is viewed not as a partisan issue, but as a practical solution to bolster economic growth and competitiveness. The broad bipartisan support for reform indicates a consensus that the current system hinders progress. Modernizing this system is presented as a crucial step toward addressing affordability challenges and demonstrating that legislative gridlock is not insurmountable.