The High Cost of Administrative Friction
Discretionary planning processes in North American municipalities are a significant driver of the current housing affordability crisis, according to research published in the journal Urban Governance. By relying on case-by-case negotiations rather than standardized “by-right” approvals, cities often inflate development costs, favor large-scale luxury projects, and suppress the overall housing supply.
When Red Tape Becomes a Financial Barrier
Many cities currently utilize a discretionary approval process, which requires developers to secure individual judgments from planners, elected officials, and public organizations. Austin Zwick, an associate teaching professor and program director for the policy studies program in the College of Professional Studies and the Maxwell School of Citizenship and Public Affairs at Syracuse University, notes that while these systems are designed to offer flexibility, they often create significant financial barriers.
The uncertainty of approval forces developers to navigate lengthy public hearings and political negotiations. According to Zwick, this process disproportionately affects smaller developers who lack the political access or capital to endure extended delays. When projects finally proceed, the accumulated costs are passed directly to the final buyers, he says.
Predictability as a Market Lever
Urban planners often contrast discretionary systems with “by-right” frameworks. Under a by-right system, a development is approved with no additional steps to follow, as long as they meet or “check every box” on the municipality’s list of requirements or standards.
Vancouver’s Costly Lessons
Zwick’s research highlights a stalled development in Vancouver, British Columbia, as an example of how administrative friction translates into market-wide price hikes. In this instance, a combination of public hearings, prolonged negotiations, and political approvals added hundreds of thousands of dollars per unit to a condo building before construction ever began.
Structural Reforms for Municipalities
Addressing the housing crisis requires structural changes at the municipal level. According to Zwick, local governments can improve affordability by streamlining their own processes.
By shifting toward more objective, standardized planning, cities may be able to lower the barrier to entry for developers, ultimately helping to stabilize housing costs by increasing the total volume of available units.