Abundance

by Ezra Klein

These dynamics help explain the curious finding that ends Syverson and Goolsbee’s paper. After looking at the states with the highest construction productivity, they note that the more productive states don’t seem to gain market share in the construction industry. That doesn’t make much sense if you assume that the difficulties of construction are primarily the organization of manpower and materials. It makes more sense if you assume that the frictions are in navigating local regulations, community considerations, neighbors’ qualms, and politicians’ interests. Developers are often fixtures in the local political scene. They have to be. “My feeling is the guys that know the system have a much easier time getting through the system,” Zarenski said. “They know ahead of time what they have to come into the party with and how to speak to those people and how to satisfy them, and so it goes a lot smoother for them.”63 But a thorough knowledge of one city or state, and establishing relationships with its decision-makers, won’t necessarily translate to success in another.