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The Endangered Species Act (ESA), often criticized for its perceived economic drawbacks, has a more nuanced and positive impact on property markets than previously thought, a new study has revealed.
The research finds that while home prices within federally protected areas remain stable, prices in surrounding communities can rise by as much as 10 percent, suggesting economic benefits for nearby homeowners.
Why This Matters
The ESA, enacted in 1973 to safeguard vulnerable species and their habitats, has long been a focal point of contention.
Critics, including some in the construction and real estate industries, as well as politics, argue that the Act stifles development and drives down property values. However, the study, led by Eyal Frank of the University of Chicago, demonstrates that these criticisms are often overstated.
"When the Endangered Species Act was passed in 1973, no one fully understood how strong it was and how much it gave final decision and final authority to the Fish and Wildlife Service and to the National Marine Fisheries Service," Frank told Newsweek.
"You might have the camp of conservationists saying that the Act has no negative impacts, and you have the camp of land developers saying that the Act is entirely detrimental to land development—I think we see here that the truth is somewhere in the middle."
What to Know
The study is the most comprehensive analysis of its kind, examining the economic impacts of the ESA by analyzing data on more than 900 species and their habitats across the contiguous United States.
Researchers matched this information with housing, land transaction and building permit data to assess the effects on property values and construction activity.
Stable Home Sales and Increased Surrounding Property Values
The study found no significant drop in home sales or property values within critical habitats, the ESA's most stringent protection areas.
Surprisingly, homes in communities just outside these areas appreciated in value, sometimes by as much as 10 percent.
This increase may stem from homeowners valuing proximity to preserved open spaces and builders focusing on areas outside protected zones, Frank said.
Minimal Impact on Construction Activity
While construction within protected areas faced regulatory hurdles, these delays were generally modest, affecting only a small fraction of projects.
Permits, especially for larger projects inside critical habitats, took as much as 100 days or more to be approved but this did not significantly disrupt overall construction activity.
"The Act is doing what it should in a sense," Frank said. "It's not blanket-approving development, and it's taking time to review and require modifications if possible."
Localized Variation in Impact
The study emphasized that while the ESA's average impact is positive or neutral, results vary by region and species.
"Even if there are these really big negative impacts, it affects their operating on a really small base of properties and lands," Frank said.
He added that often areas designated for protection have little to no developments in the works since "it doesn't make sense to declare an area that's already partially developed as crucial for the survival of a species because it's already fragmented."
Areas with frequent regulatory consultations by the Fish and Wildlife Service experienced slight but measurable declines in housing values.
What Happens Next
The findings challenge narratives that the ESA is an economic burden, suggesting instead that it can harmonize conservation goals with economic realities.
"What these findings offer us it that these broad blanket statements about the Act being destructive and having dire consequences and costs is simply not true," Frank said.
"On average, there are going to be cases and land markets where that is going to be true, and the policy will need to be tailored to those specific cases instead of taking a sledgehammer to the Act and completely weakening and redoing it."
Still, the future of the ESA remains uncertain. The Trump administration's rollback of several ESA protections during its last term—later reversed by President Biden—highlighted the law's vulnerability to political shifts.
With Trump poised to reenter office within days, it's unclear whether his team will take a further swipe at the regulations they deemed a "burden on the American public" last time around.
Frank hopes the study will foster more informed discussions about the Act's impacts.
"We've been having a very heated debate about the Endangered Act—it's perhaps the most controversial environmental law and regulation in the United States," he said. "It comes under attack with calls for revisions in every congressional session, and a lot of it is simply not being informed by the actual empirical evidence."
For Frank, maintaining—and refining—protections for endangered species while considering that the economic realities of affected communities are often nuanced is the key moving forward.
Do you have a tip on a science story that Newsweek should be covering? Do you have a question about the Endangered Species Act? Let us know via science@newsweek.com.
References
Frank, E. G., Auffhammer, M., McLaughlin, D., Spiller, E., & Sunding, D. L. The Cost of Species Protection: The Land Market Impacts of the Endangered Species Act. (n.d.). EPIC. Retrieved January 17, 2025, from https://epic.uchicago.edu/research/the-cost-of-species-protection-the-land-market-impacts-of-the-endangered-species-act/
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About the writer
Tom Howarth is a Newsweek reporter based in Bristol, U.K. His focus is reporting on nature and science. He covers ... Read more