US Permitting Regime is Hampering America’s Potential

When bipartisanship is extremely difficult to come by, policymakers seem to agree on the urgency for permitting reform. The regulatory burden of the existing permitting process is hampering America’s infrastructure potential. From housing to major transportation projects, the lack of permitting reform can affect many critical projects. Under the status quo (without any reform), these projects are usually finished late and over budget with taxpayers and consumers footing the bill for these delays and added costs.

The Biden administration and Congress are cognizant of the urgent need for change and have put forward reform proposals that are a good first step but fall short of what is needed. Without comprehensive reform, these reforms are likely to be mere band-aids rather than a sustainable solution.

A large part of the root problem is the National Environmental Policy Act (NEPA). NEPA is one of the most contentious federal statutes, allowing private entities to easily start litigation over the environmental review process. This can cause long delays to any project. This has enabled a small (but loud) minority to weaponize the environmental review process to sabotage projects they do not agree with by filing frivolous lawsuits. (READ MORE: Reversing America’s Decline)

A recent study by the Breakthrough Institute shows that there has been a a sharp increase in the number of NEPA lawsuits since 2001. The success rate of these lawsuits has been a meager 20 percent. This same study found that this litigation process takes just over four years to complete. In essence, projects are subjected to years of delay because of these lawsuits. To make things worse, the study found that non-governmental organizations (NGO) started 72 percent of the total challenges, with just 10 NGOs being responsible for 35 percent of those lawsuits on their own.

Permitting Reform Proposals

The proposals brought forward by the Biden administration and the permitting reform bill led by Sen. Manchin (I-W.Va.) recognize the disruptive nature of NEPA and have included proposals to reign in its harmful effects. Manchin’s proposal would introduce various “shot clocks,” that would set deadlines for agencies to either approve or reject projects. It would also limit the window in which a third party can introduce a lawsuit. However, the bill’s provisions would only apply to energy and mineral projects. 

Meanwhile, President Biden’s proposal focuses on housing. The administration would waive NEPA reviews for transit-oriented developments funded with federal loans under the Transportation Infrastructure Finance and Innovation Act or the Railroad Rehabilitation and Improvement Financing programs. This benefit would apply if these projects do not expand the footprint of the building being converted or modify other facilities. It would also streamline the historic preservation review process for federal housing projects.

These proposals have the potential to ameliorate some of the most egregious harms caused by the current permitting regime in this country. Unfortunately, they might not be enough. Comprehensive reform of the country’s permitting process is needed to finally bring U.S. construction prices closer to international averages. Otherwise, Americans will continue to overpay for basic infrastructure, housing, and power plants. 

While NEPA’s environmental review is the most egregious offender of added costs, there is still significant ground to cover in terms of permitting. A video recently posted by Reason summarizes how the complex, multi-layered permitting requirements adds thousands of dollars in fees and delays in order to build housing on a vacant lot.

This is one example of how the current permitting regime in America resembles a death by a thousand cuts, where the proliferation of efficiency or material standards, infrastructure mandates, and other sorts of policy-enabled micromanagement has hampered America’s capacity to build, and at the expense of the American taxpayer. (READ MORE from Juan Londoño: Don’t Regulate Data Centers Out of Existence)

The perfect cannot be the enemy of the good. The administration’s proposal should alleviate some of the price surges in the housing market. Sen. Manchin’s bill (if passed) will unlock America’s capacity to produce energy efficiently. These are valuable first steps in reforming a broken permitting system. However, these cannot be the only steps taken. Comprehensive permitting reform should be a priority for the upcoming president and the Congress.

Juan Londoño is a senior policy analyst at the Taxpayers Protection Alliance. 

The post US Permitting Regime is Hampering America’s Potential appeared first on The American Spectator | USA News and Politics.