The federal Endangered Species Act (ESA) and California's Endangered Species Act (CESA) aim to protect species from extinction by restricting property development on the habitats of imperiled species. Proponents of these laws argue that the development restrictions are necessary in order to protect valued species, whereas opponents argue that the burden is too restrictive. The controversy surrounding species protection is especially intense in California, where many species are subject to protection and where developmental pressures are particularly acute.
This paper provides estimates of the impacts on housing supply in California due to protection of animal species provided under the ESA and CESA. Specifically, the paper estimates the effect on housing development in California census tracts that contain protected endangered animals. The main empirical complication in addressing this research question is that census tracts that contain one or more protected species are likely different from census tracts that do not contain such species. Further, these differences could also contribute to differences in housing supply, therefore biasing the estimated effects. We attempt to address this concern using a unique research design and data set. We find that a census tract that has an endangered animal listed by the federal or state government in the 1990s does not have a subsequent reduction in the development of housing units. This suggests that species protection in California does not impede housing supply.