Paving the Swamp: Consequences of Land Use Regulation Under the Clean Water Act
Presented by:
Hannah Druckenmiller
Division of the Humanities and Social Sciences
California Institute of Technology
Friday, March 13, 2026
12:00 pm-1:15 pm
Taylor-Hibbard Seminar Room (Rm103)
How does environmental regulation of land use affect the environment and the economy? We study how recent changes to Clean Water Act regulation, measured using wetland maps and machine learning, affect land markets. Four findings emerge. First, a 2020 White House rule reduced Clean Water Act regulation by about 40 percent. Second, by deregulating wetlands, this rule increased the value of U.S. non-residential parcels by nearly 1%, with larger effects for parcels facing greater deregulation and near-zero effects for residential parcels. Third, deregulation expanded development and associated impervious surfaces like pavement and reduced wetland area. Fourth, the deregulation increased non-residential land values by about $125 billion, a magnitude which meaningfully exceeds the estimated loss in wetlands' flood mitigation services; we carefully discuss welfare implications.