Federal protections for endangered species have played a role in the ongoing affordable housing crisis by reducing the number of housing permits issued, according to new research. A paper published in the Journal of Public Economics by economist Maxwell Tabarrok indicates that the Endangered Species Act (ESA), enacted in 1973, has had a substantial impact on housing development.
Tabarrok's analysis found that species listings reduce annual housing permit flows by approximately 10%. This has resulted in an estimated loss of around 9 million housing permits since 1980, contributing to an estimated 4% reduction in the total housing stock and subsequently driving up housing prices.
The ESA prohibits activities that could "harm" or "harass" a listed animal, which can extend beyond direct habitat destruction to include impacts such as light pollution and stormwater runoff. Consequently, building projects in areas inhabited by listed species may require modifications, face cancellation, or never begin construction.
To quantify these effects, Tabarrok integrated data from a census survey on building permits with information on species listings and their habitats. The number of species listed as endangered has grown significantly, from 82 in 1970 to nearly 1,500 as of last year. These protected habitats now cover large portions of the United States, with particularly dense concentrations in California and Florida.
Tabarrok's study, which focused on the period between 1980 and 2024, utilized variations in species listings across different regions to create a quasi-experimental setting. He examined trends in permitting to see if they changed abruptly in areas affected by new listings compared to unaffected areas. The research also noted that proposed listings had no discernible effect, while the de-listing of a species correlated with a reversal of the effect on permits.
Further analysis incorporating land-use data revealed that the ESA's impact was consistent across both new constructions on undeveloped land and infill projects within already developed areas. This finding suggests that the act's restrictions are often applied regardless of the actual impact on endangered species' habitats, indicating that the literal interpretation of the law, rather than its ecological consequence, may be the primary limiting factor.