Study: Permit approvals boost vacant land value by about 50 percent
Feb 28th 2026
A new paper by Evan Soltas and Jonathan Gruber uses Los Angeles County and cross-metro comparisons to show that permitting approvals sharply raise land values, add significant per square foot costs, and explain a large share of the gap between building costs and housing prices.
- Evan Soltas and Jonathan Gruber find permit approval raises vacant land prices by about 50 percent on average.
- Permitting alone can explain roughly one third of the gap between construction costs and final sale prices.
- The paper estimates permitting adds about $48 per square foot of land, equal to roughly $144,000 for a 3,000 square foot lot.
- In Los Angeles County a mid-size apartment building takes about 4.2 years to build, roughly twice the time reported in Raleigh and Fort Worth.
- Across the 50 largest U.S. metro areas studied, no city that permits a lot of housing also has high rents.
- Critics who call permitting reforms marginal overlook evidence that permitting is a major driver of housing affordability and supply.
- Reducing permitting delays and restrictive zoning could increase housing supply near jobs and lower cost pressures for renters and buyers.