Arizona’s cactus ferruginous pygmy-owl may no longer be endangered, according to an August ruling from the 9th Circuit Court of Appeals. The three-judge panel concluded that the U.S. Fish and Wildlife Service had failed to prove that 18 pygmy owls in Arizona are distinct from a much larger population of owls in Sonora, Mexico.

In 1997, the owl’s listing delayed development and road projects, and prompted Pima County’s still-unfinished Sonoran Desert Conservation Plan, which would set aside tens of thousands of acres to protect the owl and 54 other “vulnerable” species (HCN, 5/7/01: County unveils pioneering protection plan).

The Southern Arizona Homebuilders Association, which sued over the owl’s listing, says that conservation efforts have choked off land supplies and raised home prices. According to the group, the ruling, by loosening development rules, will increase the supply of affordable housing.

Jenny Neeley, Southwest associate for Defenders of Wildlife, says that the owl’s fate isn’t decided: “The 9th Circuit didn’t call into question the underlying science that clearly shows that the pygmy-owl is threatened with extinction in Arizona. All that the court did was find that the Service failed to adequately explain its decision to list pygmy-owls.”

This fall, the court will decide to either remove the owls’ protection, or leave the protection in place, while Fish and Wildlife has a chance to prove that the Arizona owls are genetically different from those in Mexico.