Local Interest Group Participation in the Housing Entitlement Process

• In Event: Power and Precarity: The Political Economy of U.S. Housing Policy

Abstract

How do interest groups use the regulatory processes of local government to extract particularistic benefits? To what extent does this strategy stymie the provision of critical infrastructure (e.g., housing, clean energy, and transportation)?

Local interests–such as labor unions and community groups–often negotiate with housing developers and city governments to extract particularized benefits from new residential development. However, if interest groups “over-fish” in the entitlement process, developers may walk away from projects that they no longer deem profitable. When less new housing is built, not only do interest groups leave potential benefits on the table, but local housing prices increase, raising the cost of living for the group’s own members. For example, construction unions are uniquely cross-pressured between maximizing the number of housing developments built and extracting the maximal volume of particularistic benefits from each development deal via project labor agreements. This tension has led to large cleavages within the construction labor movement regarding whether to support regulatory streamlining reform to increase the housing supply or maintain the status quo to maximize their political leverage over individual projects (Christopher 2023).

In this paper, we test whether local interest groups are aware of and responsive to the sum of benefits available for capture via the entitlement process. As our dependent variable, we have generated measures of local interest group activity in the regulatory process via LocalView (Barari and Simko 2023), a database of participation and public comment in local government meetings. As our independent variable, we use various measures of the amount of value that interest groups can extract from development process without causing the proposal to be financially nonviable (e.g., Gyourko and Krimmel 2021). With these data, we cross-sectionally test whether cities with large amounts of value to be captured generate more interest group activity in local political contexts, as theorized by Anzia (2022) and Gray and Lowery (1996).

While we focus primarily on the behavior of construction unions, additional evidence evaluates the collective influence of interests in extracting benefits from the entitlement process. This additional evidence comes from qualitative accounts, media coverage, and an alternative dependent variable–the use of environmental litigation to extract particularistic benefits. More broadly, our study advances the discipline’s understanding of interest group behavior in the regulatory environment, as well as the challenge that local interest group mobilization can present for the development of critical infrastructure in democracies.

Authors

• Michael Hankinson, George Washington University

• Asya Magazinnik, Massachusetts Institute of Technology

• Anna Weissman, University of California, Berkeley