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I’ve recently started a new tradition on my commutes to work. When the Pittsburgh Steelers win, I listen to my favorite Steelers podcasts for the next week. When the Steelers lose, I listen to an audiobook instead.
So it is with a heavy heart that I say I’ve listened to three books this past month.
The first, Abundance by Ezra Klein and Derek Thompson, covered the labyrinth of permitting, zoning, and other regulations that prevent Americans from building the housing, clean energy, and science and technology infrastructure we need. The second, Warp Speed by Paul Mango, chronicled the U.S. government’s most-recent-yet-least-discussed groundbreaking achievement: developing a COVID-19 vaccine in under a year, shattering the previous record to develop a vaccine (about 4 years to develop one for mumps) and saving countless lives around the world, and doing it by cutting through much of that aforementioned red tape. The third, Neighborhood Defenders by David M. Glick, Katherine Levine Einstein, and Maxwell Palmer, detailed how local planning and zoning meetings meant to epitomize inclusive, democratic, participatory politics actually result in a small group of wealthier homeowners blocking new housing developments across America.
And then, we beat the Baltimore Ravens on Sunday. So no more books. I hope.
Thankfully, I’m not the only one thinking about permitting laws. A few months ago, Congressmen Bruce Westerman (R-AR) and Jared Golden (D-ME) introduced the bipartisan Standardizing Permitting and Expediting Economic Development (SPEED) Act, a permitting reform bill that proposes significant changes to the 1970 National Environmental Policy Act with the goal of making it easier to build new infrastructure in America. Excellent acronym work as always. Interestingly, there are prominent Democrats and Freedom Caucus Republicans opposing the bill as well. I gather that the House plans to vote on the bill next week, and discussions amongst senators have begun as well.
And I say “I gather” because news coverage on this bipartisan bill, which tackles a pivotal affordability and climate issue, is nearly nonexistent.
I don’t know whether the SPEED Act is a step in the right direction or not. My instinct is that it’s positive, though it’s a lot of bureaucratic legalese that I had trouble parsing. But at least they’re trying. Permitting — the government system used to approve “major federal actions” such as federally funded infrastructure or infrastructure on federal land and make sure these projects follow environmental rules — is a good thing in theory. Agencies study a project’s impacts, solicit public input, and try to catch problems before they happen. But in practice, the system has become so slow, expensive, and confusing that it often works against its own goals. The average Environmental Impact Statement now takes 4.5 years to complete and costs $1.4 million, and that’s only one step in a much longer approval chain. Crucially, these delays stall and often derail projects meant to help the environment, like building clean energy, installing transmission lines, managing forests for wildfire prevention, and restoring wetlands. Proponents of reform have argued that these laws, while environmental in name, are now doing far more environmental harm than good.
A month ago, I thought permitting was a niche passion project at some think tanks that could lead to some bipartisanship, but nothing major. Now, I believe permitting is a dire issue at the center of our affordability crisis and climate crisis. The SPEED Act represents incremental change, but solving these crises demands a bold and transformative shift in how we permit, approve, and construct nearly everything. And now, as a 26-year-old with no political experience who read three whole books, I am going to share my wacky idea for how we do it.
And don’t worry, I ran it by my economics professor and he didn’t shoot it down. Not that he’d be looking for a good student evaluation or anything…
We can’t build what we need
There is ample anecdotal evidence showing how environmental permitting laws block critical projects intended to help the environment, either directly or more often indirectly by delaying them until they become unaffordable. In my backyard in Connecticut, a new offshore wind development called Park City Wind began the federal permitting process in December 2020, and over three years later, only two of the project’s nine required permitting processes had been completed and the project had been granted three deadline extensions. By that point, interest rates had skyrocketed, inflation drove up costs, and the project was canceled.
In Florida, Congress passed the Central Everglades Restoration Plan in 2000 to restore water flow through southern Florida, but despite billions in authorized funding, permitting delays meant only 6 of 68 projects were underway by 2017, at which point impacts from climate change were already setting in.
In California, the state legislature established an authority to build high-speed rail from Los Angeles to San Francisco in 1996, but due to permitting laws, it’s nearly 30 years later and California has received billions in federal grants but no high-speed rail. One city alone managed to trigger 37 change orders, $26 million in extra costs, and a five-year delay.
And on, and on, and on. Permitting doesn’t just slow individual projects — it chokes the entire supply of what the country desperately needs.
Though not as big a topic in the environmental world, housing is a massive portion of this problem. Rents in cities are skyrocketing, young people like myself have zero illusion of ever becoming homeowners, and very few new houses actually get built. This issue rests less with federal permitting laws and more with local zoning regulations, which can make certain housing developments illegal (for instance, many towns don’t allow apartments above commercial buildings or multi-family developments) or more often, lead small groups of local homeowners to attend local zoning board meetings, protest projects, and delay them into oblivion. These groups sometimes voice important concerns, such as the town’s capacity for new homes in the schools, roads, or septic systems; yet these concerns consistently lead to not building new housing rather than building new housing and the infrastructure to go with it.
These “neighborhood defenders” are overwhelmingly homeowners, wealthier than the average population in their town, and have the knowledge and availability to regularly attend planning and zoning meetings. Even if a new housing development is safe and desirable, the mere bureaucratic process of demanding more studies and filing lawsuits often delays projects and adds enough costs to make them unprofitable. Furthermore, these local meetings, though meant to be inclusive and democratic, actually end up leaving out renters, prospective residents, local businesses, and all the other stakeholders who would benefit from new housing developments, and when this happens across the country, we find ourselves in the housing crisis we have today.
“Affordability” policies only address half the problem
The need for permitting and zoning reform becomes even more stark when we break down the economics. The affordability crisis in America is twofold: there’s not enough of what we need (housing, energy, transit, etc.) AND things are too expensive. Most policies that receive buzz and political traction only address one half of the equation while worsening the other half. Tax cuts, stimulus checks, and subsidized housing put more money in people’s pockets, but if they’re still competing for the same amount of stuff, these policies will drive prices higher. Companies will now be able to afford to build more at these higher prices, but the prices would still be too high. On the flip side, freezing rents or restricting immigration will, from an economic perspective, push prices down, either by brute force or by shrinking the number of buyers. But low prices mean firms can’t afford to build as much, and they’ll make less of what we need.
In economic language, all of these policies are dealing with demand, not supply. The only way to lower prices AND build more is to make it tangibly easier to build. Building more does bring social tradeoffs though, which is why permitting laws exist in the first place, and why many fight to uphold them. When we build more, we can have air pollution, water pollution, endangered species, and community concerns or injustices. When our cornerstone permitting laws were passed in the 1970s, we were no doubt building too fast and needed environmental and social guardrails to protect our communities. But when we build less, we have other social issues: housing shortages, clean energy shortages, not enough transmission lines, and not enough infrastructure. I think it’s safe to say that currently, the latter is a far bigger problem than the former, and permitting laws haven’t adapted. Some roadblocks are necessary to ensure we build safely and equitably, but any unnecessarily burdensome laws or procedures we can remove will cut costs for builders, making the things we need both cheaper and more plentiful.
On the demand side, Congress isn’t the only entity that can influence how much stuff people want through policies like the examples above. We also have the Federal Reserve, which operates independently from political pressure and steers the economy through interest rates. When interest rates are high, people spend less and save more, which helps steady high prices but can cost jobs. When interest rates are low, people save less and spend more, which creates jobs but can cause higher prices. This lever is an essential check on government policies to try to keep the economy from spiraling too far in one direction or the other.
But today’s crisis has us spiraling in both directions, which brings us to my grand ideas. If the real bottleneck is supply, then the only true solution is to redesign the systems that decide what gets built and how fast. Just like the Federal Reserve has this lever to deal with the tradeoff between jobs and prices, I’m imagining another group free from political pressure with levers to address these social tradeoffs with intention. The idea would be to create two new independent agencies modeled after the Federal Reserve.
Agency 1: A National Permitting Authority to speed up and standardize reviews
In short, the National Permitting Authority’s job would be to speed up safe, sustainable building when the country needs it most. Recent reforms in Congress have instructed permitters to designate a “lead agency” on a review, but this would be a much bigger step of creating one specialized agency independent from the federal government that can coordinate and speed up reviews. Instead of evaluating each project individually, the NPA would work with states and localities to create a nationwide map with “green zones,” “yellow zones,” and “red zones” based on environmental and social risk, where projects in green zones get a very expedited permitting review, projects in red zones go through a more traditional procedure, and projects in yellow zones will have different speeds depending on the nation’s needs and tradeoffs in a particular moment. States with restrictive permitting laws would also need to be involved in this reform process. Ideally, they could come under the NPA’s umbrella somehow, as a national system could more effectively coordinate permits for interstate projects.
The NPA’s lever is “permitting speed,” which would apply mainly to the yellow zones, but possibly others. Admittedly, I don’t know enough of the nitty-gritty of the permitting process to know which parts of the process can be expedited and which can’t. Projects violating the Clean Air Act, Clean Water Act, or other environmental laws must still get caught and held accountable. But I imagine there being a fast mode with short reviews, short comment periods, no legal right to sue, no local veto power, etc. that can be triggered when there are shortages of housing and infrastructure, similar to what we do currently for certain designated projects such as semiconductor manufacturing. And then there would be a precautionary mode with more of our current system, triggered by certain environmental and social benchmarks as measured by on-staff experts. And possibly some in between modes. This alone would remove possibly the biggest bottleneck for building housing, clean energy, and other needed infrastructure without reverting to a 1960s level of air and water pollution.
As an independent agency, the NPA would need to be insulated from outside lobbying, which could be done by giving the NPA its own revenue source, such as a permit application fee, that covers all of its costs. Assuming they maintain independence, it would hopefully create an incentive for developers to use sustainable building practices, since the threat of slower permitting would cost them business.
Agency 2: A Central Housing Authority to build homes and stabilize the housing market
Enter the Central Housing Authority: another Federal Reserve, but instead of money, it’s houses. The CHA’s first job is to get houses built, and any state and federal permitting roadblocks would now be expedited thanks to the NPA. Local zoning laws would be another issue, but they could be reformed through a number of carrots and sticks. Sticks could include outlawing overly restrictive zoning laws such as townwide bans on multifamily homes, while carrots could and would likely need to include automatic local infrastructure grants anytime CHA houses are built. If towns are guaranteed funding to update schools, utilities, roads, and public transit whenever they accept new housing, then the housing might receive more local enthusiasm and integrate into the community more comfortably.
CHA would develop a small number of set build templates, largely multi-family homes and apartments/condos, with modern designs that prioritize efficiency (passive design, rooftop solar, heat pumps, induction stoves). Private contractors would do the building, but by having a small number of templates, contractors across the country will master them, leading to faster and cheaper construction across the board. CHA’s first lever is being able to dictate how many CHA homes are being built at any one time. CHA residents would pay into a monthly maintenance fund (as they do in a co-op/condo complex), and due to the standardization of these homes, repairs should also be cheaper and more routine. Custom renovations would not be allowed, for reasons that will become clear in a moment.
If we massively increased the housing supply and did nothing else, it wouldn’t just be today’s neighborhood defenders who would be livid. The goal of this policy — more houses at lower prices — is in direct conflict with homeowners across the country who have most of their wealth tied up in their houses. If property values dropped, their retirements would vanish. Yet, we badly need new houses so young people can become homeowners and financially challenged households don’t fall into homelessness. This is what makes housing so much trickier than clean energy, transmission lines, public transit, and some of our other needs. Homeowners are strongly incentivized to resist new housing development, and if they didn’t, we’d have a 2008 housing collapse all over again.
So instead of fighting current homeowners, what if the CHA could change their incentives? What if houses didn’t function like stocks whose values go up and down depending on the market, but instead functioned like Treasury bonds where you buy a house and are guaranteed a fixed, modest return when you sell it? No matter what the rest of the market does.
That’s where the CHA comes in. Of course, all private homeowners would remain private homeowners in the current housing market, which would operate like today’s stock market. But the homes the CHA builds would be part of their own market, operating like today’s bond market. Essentially, the CHA homes can only be bought from the CHA and sold back to the CHA (or into the CHA system), and CHA homes would come with a guaranteed appreciation rate (GAR) on sale. In other words, if you bought a CHA house for $100,000 with a GAR of 3%, lived there for a year, and sold it, you’re guaranteed a $103,000 value. Stay put thirty years, and you’re at $242,726. Of course, that pales in comparison to the private housing market, but for people who can’t afford a house or just want to play it safe, it’s a solid deal.
GAR would live at a level modestly above inflation — high enough to beat renting but lower than the gains a private property owner would hope to get. It’s a sort of happy medium between renting and buying. With this setup, new houses shouldn’t hurt the private market nearly as much, if at all. Owning a CHA house becomes its own market. Plenty of people will still want to own their own private house, where they would be allowed to do renovations, have a yard, etc., but now, there will be a less expensive and volatile alternative for those who don’t need or can’t afford that luxury.
With enough CHA houses on the market, the CHA now has a new lever to nudge the housing market: the guaranteed appreciation rate. If the GAR is lowered, more people will opt for private, improving the private market. If the GAR is raised, more people will opt for CHA, cooling private property values and stabilizing private rents. If lots of people are applying for CHA homes, the CHA will know to build more but also lower the GAR to nudge some people away. If not as many people are applying for CHA homes and the private market is heating up, the CHA can slow their building and raise the GAR to sweeten the deal.
While we can’t know until we try it (or at least do more research than running it by my professor), it’s likely this concept would have a wide range of benefits. Though building new houses does impact local environments, adding multifamily homes in population centers brings massive environmental upside. People live closer to where they work, reducing transportation pollution, and modern designs can make the homes themselves extremely sustainable. Not only would passive designs, solar panels, heat pumps, induction stoves, and the like help the environment, but it would cost less to build than the alternative fossil fuel infrastructure would, and these technologies would significantly lower energy bills for residents.
There are other interesting benefits as well. For example, what if we let landlords buy CHA properties and rent them to tenants? I know, it sounds asinine, but hear it out. Most landlords wouldn’t jump at the idea, as they can make more money on private property, but probably not as much now that the private market is more stable. Like an investment banker balancing a fund with some stocks and some bonds, a landlord might like the idea of managing their risk with a balanced real estate portfolio, owning some private properties and some CHA properties. The difference is that today, a landlord might be willing to hold onto a vacant unit if they think property values will spike and they can charge higher rents in six months. With CHA units, that’s not possible. A vacant unit is always losing money, and any rent price that covers CHA maintenance fees and the landlord’s mortgage interest is making money. As a result, these units will rent for cheaper, and since a renter experiences little difference between a CHA rental and a private rental, now the private rental market will have to compete. Suddenly, affordable rentals are ample with no need for rent control or government subsidies. Landlords will still be able to make money, but tenants would get significant power back.
Of course, social housing and transitional homes would still need to exist for certain populations in need, but that too could become a much smaller issue. Today, social housing costs significantly more to build than market housing, due in large part to red tape. Now that the CHA is really good at getting houses built, the costs to build and maintain social housing would be significantly cheaper. Furthermore, fewer people would fall into homelessness due to financial reasons, hopefully reducing the population that needs this service.
I’m not quite sure how community participation would work in this process, but many issues should be solved. Neighborhood defenders won’t have an economic incentive to block new developments, and demands for updated infrastructure will be met with funding and expedited permitting processes to get that done. If building starts leading to excessive environmental pollution or other costs, the NPA has levers to slow it down. Planning and zoning boards could still be the venue for other concerns to be aired, but I wonder if there could be a reimagining of that as well. Currently, public comment processes for permitting and zoning are not including vast swaths of the population. Perhaps a “permitting and zoning jury duty” or something could bring communities into the process more effectively.
As the SPEED Act gains momentum, I felt it was important to emphasize that tweaks around the edges won’t be enough permitting reform to solve our affordability and climate crisis. It isn’t just thinking big, but it’s identifying why stakeholders have incentives to push for less, and then setting up a system that fixes those incentives. If firms know excessively polluting could trigger extra costs and red tape, perhaps they’d want to build sustainably. If homeowners know new housing in their community will not compete with their property on an open market and will bring infrastructure grants to their town, perhaps they’d encourage new developments.
I’m under no illusion that these specific ideas would actually happen without massive public support, so this piece is more a fun brainstorm than anything else. Congress doesn’t delegate power easily, and there are likely issues with these ideas that are well beyond my expertise. And with this Steelers run defense heading to Detroit to face the Lions in nine days, I have a feeling I’ll be reading up on all those issues right around then.