The End of the Endangered Species Act?

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The End of the Endangered Species Act?<br>And The Costs of Environmental Land Use Regulation

Maxwell Tabarrok<br>Aug 01, 2026

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My paper on housing construction and the Endangered Species Act, The Costs of Environmental Land Use Regulation, has just been published in the Journal of Public Economics.<br>The central idea of the paper is that the Endangered Species Act creates hundreds of natural experiments testing the effect of environmental land use regulation. The law prohibits construction when it might cause harm to an endangered species. To lift this prohibition, you need an permit from the US Fish and Wildlife Service.<br>Crucially, however, this prohibition on construction only applies when endangered species are nearby. So when the Riparian Woodrat, say, was added the endangered species list, the cities and towns that happened to be near its habitat in the San Joaquin valley got an extra layer of land use regulation, but other, similar towns in central California did not. Since the Woodrat’s habitat is not plausibly correlated with other underlying economic or demographic factors that drive housing construction, this is a good natural experiment testing the effect of the ESA’s land use regulations. The ESA creates hundreds of these experiments across hundreds of species listings.

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The map below shows the same natural experiment but for a different listing of the Northern Long Eared Bat (NLEB). This is the largest species listing since 1967 with over 1.5 million square kilometers of habitat. The dots in red represent local permitting offices with jurisdictions inside the NLEB habitat and the blue dots represent those outside of it.

The next graph plots the average annual per capita permit flows in the blue control group and the red treated group. Through the housing crisis collapse and recovery the two groups move in concert. Only after the species listing differentially treats the red group with stricter land use regulation do their permitting trends diverge, suggesting that the change in regulation is responsible.

Across all 661+ endangered or threatened animal listings, I find the same story. Before a given species is added to the endangered species list, places inside and outside the habitat have the same trends in annual permit flows, indicated by the dots hovering uniformly around zero below. After the ESA listing, places inside endangered habitat start issuing -0.52 fewer permits per 1,000 1980 residents annually, about a 10% reduction.

This same effect shows up in reverse after de-listings: places in endangered habitat increase their permits relative to similar places outside of the habitat after an animal is removed from the endangered species list.<br>Importantly, the slowdown in permitting after ESA listings shows up both in extensive margin greenfield development and in infill construction in already-developed areas. The tradeoff between housing and species protection is hard to evaluate at the extensive margin, but it’s not binding on the intensive margin so any development slowdown there is a pure welfare loss.<br>Each species listing lowers annual permit flows by 10% in the permitting jurisdictions nearby the listed habitat. There have been hundreds of new additions to the endangered species list since 1980 and endangered species habitats now cover the vast majority of the country. Adding up the implied effects across all of these listings I find that the ESA has reduced US housing stock by around 6.3 million units since 1980, which is about 4% of 2025 housing stock. Without the several hundred ESA listings since 1980, the US would be permitting hundreds of thousands of additional units annually with gains concentrated in major metro areas and especially coastal California.

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The End of the Endangered Species Act?

Earlier in July the US Fish and Wildlife Service published a final rule that, after 15 months of deliberation, rescinds the definition of “harm” that has underpinned the enforcement of the ESA since 1975 and thus narrows the set of actions that violate the ESA.<br>This rule change could, if it survives challenges in court and subsequent administrations, fundamentally change the ESA and remove the major features that turned it into a land use regulation in the first place.<br>How can simply removing the definition of one word, and not even replacing it with anything, change the law so much?<br>Well, the current definition of harm (current until the new rule goes into effect in September) is<br>an act or omission which actually injures or kills wildlife, including acts which annoy it to such an extent as to significantly disrupt essential behavioral patterns … significant environmental modification or degradation which has such effects is included within the...