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Time-to-plan lags for commercial construction projects

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  • Stephen D. Oliner

    (American Enterprise Institute)

  • Daniel E. Sichel

    (American Enterprise Institute)

  • Jonathan N. Millar

Abstract

Gestation lags have long been understood to be an important feature of the investment process. However, previous research has focused on the time-to-build part of the gestation period and has provided little information on the earlier time-to-plan period during which key decisions are made about the project's scope and financing. We develop new estimates of time-to-plan lags for commercial construction projects in the United States, using a large project-level dataset that allows direct measurement of planning lags. We find that these time-to-plan lags are long, averaging about 16months when we aggregate the projects without regard to size and about 26months when we weight the projects by their construction cost. The full distribution of time-to-plan lags is very wide, and we relate this variation to the characteristics of the project and its location. In addition, we show that time-to-plan lags lengthened by 3 to 4months, on average, over our sample period (1999 to 2010). Regulatory factors are associated with the variation in planning lags across locations, and we present anecdotal evidence that links at least some of the lengthening over time to heightened regulatory scrutiny.
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Suggested Citation

  • Stephen D. Oliner & Daniel E. Sichel & Jonathan N. Millar, 2012. "Time-to-plan lags for commercial construction projects," AEI Economics Working Papers 10343, American Enterprise Institute.
    • Handle: RePEc:aei:rpaper:10343
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    Cited by:

    1. Garcia, Daniel & Molloy, Raven, 2025. "Reexamining lackluster productivity growth in construction," Regional Science and Urban Economics, Elsevier, vol. 113(C).
    2. Minjee Kim & Tingyu Zhou, 2021. "Does Restricting the Entry of Formula Businesses Help Mom-and-Pop Stores? The Case of Small American Towns With Unique Community Character," Economic Development Quarterly, , vol. 35(2), pages 157-173, May.
    3. Getzner, Michael & Bröthaler, Johann & Neuhuber, Tatjana & Dillinger, Thomas & Grinzinger, Elias & Kanonier, Arthur, 2025. "Socio-economic, political and fiscal drivers of unsustainable local land use decisions," Land Use Policy, Elsevier, vol. 153(C).
    4. Eriksen, Michael D. & Orlando, Anthony W., 2024. "A cost decomposition of break-even rents for new multifamily housing development," Journal of Housing Economics, Elsevier, vol. 66(C).
    5. Voith, Richard & Liu, Jing & Zielenbach, Sean & Jakabovics, Andrew & An, Brian & Rodnyansky, Seva & Orlando, Anthony W. & Bostic, Raphael W., 2022. "Effects of concentrated LIHTC development on surrounding house prices," Journal of Housing Economics, Elsevier, vol. 56(C).
    6. Daniel Garcia & Raven S. Molloy, 2023. "Can Measurement Error Explain Slow Productivity Growth in Construction?," Finance and Economics Discussion Series 2023-052, Board of Governors of the Federal Reserve System (U.S.).
    7. Tianyue Hu & Zhiheng Bao & Baiyang Zhang & Xinnan Gao, 2025. "Predictive Analysis of Carbon Emissions in China’s Construction Industry Based on GIOWA Model," Mathematics, MDPI, vol. 13(12), pages 1-20, June.
    8. Jan-Niklas Meier & Paul Lehmann & Bernd Süssmuth & Stephan Wedekind, 2024. "Wind power deployment and the impact of spatial planning policies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(2), pages 491-550, February.
    9. Jones, Jonathan & Serwicka, Ilona & Wren, Colin, 2018. "Economic integration, border costs and FDI location: Evidence from the fifth European Union enlargement," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 193-205.

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    • A - General Economics and Teaching

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