As a kid, the term “endangered species” evoked images of majestic animals like pandas and whales, creatures in urgent need of protection. Nowadays, though, it seems to refer more to development projects that stall because of some obscure frog that few people even think about.
It’s quite amusing, really. Scientists have recently figured out that the snail darter, a once-controversial fish species that halted several dam projects back in the ’70s, isn’t actually a unique species after all.
Now, this ever-expanding list of animals deemed endangered in the U.S. is also causing complications for affordable housing development.
A recent paper from economist Maxwell Tabarrok in the Journal of Public Economics examines the impact of the federal Endangered Species Act, which was enacted in 1973, on housing permits. He discovered that listing a species significantly reduces the number of annual permits issued, by about 10% on average.
This translates to approximately 9 million housing permits affected since 1980, with Tabarrok suggesting that many of these were likely permanently lost, not just relocated.
In other words, the Endangered Species Act is contributing to a constrained housing supply, leading to an estimated 4% reduction in the total housing inventory, which inevitably drives prices up.
The legislation prohibits any actions that could “harm” or “harass” listed animals, which encompasses more than just land development—it can also involve light pollution and rainwater runoff.
Once a species gets on the list, construction projects in that region may need to be altered, scrapped, or sometimes never even kick off.
To gauge the law’s effect on housing permits, Tabarrok merged census permit data with species lists and habitat information. This effort involved a comprehensive analysis that matched different geographies and jurisdictions.
In 1970, only 82 species were classified as endangered. Fast forward 20 years, and that number had nearly quintupled. As of last year, it approached 1,500.
The habitats of these endangered species stretch across much of the U.S., notably in California and Florida. While this situation complicates development, it surprisingly simplifies the use of modern statistical methods.
Every time a new species is listed and impacts certain parts of the country while leaving others unaffected, it provides a sort of natural experiment. Did permit patterns change in those impacted regions relative to others?
Focusing on the timeframe from 1980 to 2024, Tabarrok applied this idea in varying manners, arriving at consistent conclusions despite different technical trade-offs inherent in his approaches.
He also addressed a limitation of the study, as not all species make it onto the endangered list, making some of the effects more like a random change in development, rather than a controlled experiment.
Looking back, previous development impacts may have been influenced by lobbying efforts for or against new listings, but the economic repercussions still need consideration.
Additionally, it’s possible that regions with endangered species are fundamentally different from those without them. Tabarrok also delved into smaller queries, observing no effects from species that had only been suggested for listing but hadn’t been established, and noted that the impact reversed when species were delisted.
Upon adding satellite land use data to his analysis, similar effects surfaced for both “greenfield” projects (new constructions on undeveloped land) and “infill” developments (new builds in already developed areas).
This distinction matters because “infill” projects tend to cause less disruption to existing habitats, indicating that the law’s language—rather than actual impacts on endangered species—might be the real constraint on development.
There are undeniably real trade-offs between the need for more housing and the urgency to protect vulnerable species. However, with endangered species habitats now covering vast swaths of the country and millions of potential housing projects stymied, perhaps we’ve unintentionally granted triumphs to environmental advocates that they don’t truly deserve.
