Los Angeles CA: Impact of Approval Pathways on Multifamily Housing's Time to Permit
A 2022 study (Does Discretion Delay Development? by Michael Manville, Paavo Monkkone, Nolan Gray & Shane Phillips) finds that discretionary review of multifamily housing projects in Los Angeles substantially delays development compared to by-right approval, even after controlling for key confounding factors.
The big picture
Faster and more predictable approval of new housing can reduce development costs, help secure financing, and ultimately increase housing supply and affordability. However, until now, research has not directly compared approval times for discretionary versus by-right projects due to challenges in isolating the effect of the approval pathway from other project differences.
By the numbers:
By-right multifamily projects were approved 27% faster than discretionary projects, even after controlling for project size, affordability, location, and other characteristics. The gap was 28% in the raw data.
By-right approval also had less variance in timelines, suggesting more predictability. The standard deviation was 213 days for by-right TOC projects and 211 days for by-right non-TOC projects, versus 269 days for discretionary TOC and 407 days for discretionary non-TOC.
Projects going through L.A.'s Transit-Oriented Communities (TOC) program, which allows many projects over 49 units to be approved by-right, were permitted 22% faster than non-TOC projects.
Why it matters
Approval processes are a key but understudied factor shaping housing development. Identifying how much discretion slows down permitting can motivate cities to expand the approval, which can, in turn, boost housing production. The TOC program shows how upzoning tied to by-right approval can yield more homes.
How they did it
The researchers leveraged L.A.'s TOC program, which lets many larger projects be approved by-right if they provide affordable units. This allowed comparisons of discretionary and by-right projects of similar size in the same areas, overcoming key limitations of prior studies that couldn't untangle physical differences from process differences.
Yes, but the study couldn't fully control developers potentially taking more time on design and outreach before submitting by-right applications, which could underestimate discretionary delays. Discretionary review could yield community benefits that justify longer timelines, though data on affordable units suggest by-right TOC projects provide comparable benefits.
What's next
Future research should examine approval times from building permit to occupancy, the benefits of discretionary review relative to delays, and whether by-right projects receiving density bonuses produce as many community benefits as negotiated projects. Studying more cities and project types would also provide further evidence.
The bottom line: Removing discretionary review can significantly accelerate multifamily development, likely with little downside if coupled with well-designed density bonuses. The results provide compelling evidence for cities and states to expand by-right housing approval as a key strategy to address affordability.