The double-edged sword of upzoning

Development in Downtown Brooklyn in New York contrasts with older low rise buildings, on Sunday, April 18, 2021. Because of increased development in the area, notably hi-rise luxury apartment buildings, chain stores and high-end retailers are moving in. (Photo by Richard B. Levine)No Use Germany.

As cities across the country grapple with soaring housing costs, the need for zoning reform is more pressing than ever. Cities are in desperate need of more housing, but exclusionary zoning practices often thwart housing growth. Indeed, a growing body of evidence has identified how exclusionary zoning places artificial constraints on supply, exacerbates residential racial segregation, and contributes to rising housing costs. In response, policymakers have called for zoning reforms that would allow more small homes to be built in expensive markets, which often prohibit non-single-family detached homes. President Biden’s infrastructure plan, which supports awarding grants and tax credits to municipalities that reform their zoning codes to allow multifamily developments in neighborhoods restricted to single-family homes, offers substantial promise to dismantle exclusionary zoning.

These exclusionary zoning practices are rooted in a deeply racist history. Since the early twentieth century, municipalities have wielded local discretion in the land use process to enact a host of exclusionary zoning restrictions. Exclusionary zoning regulations, such as zoning ordinances mandating minimum lot sizes, restricted multifamily development and prevented often working-class, minority households from moving into predominantly white communities. We now know that these effects are durable; previous research has found that restrictive land use regulations enacted earlier in the twentieth century help explain metropolitan segregation patterns over time.

In response, planners and policymakers across the country have renewed calls for cities to reform their zoning codes to allow for denser development, such as allowing duplexes or triplexes in single-family neighborhoods. For example, in 2018, Minneapolis became the first major American city to eliminate single-family zoning. Other cities, such as New York and Seattle, have turned to upzoning policies. Upzonings, which increase allowable densities often by relaxing the zoning code’s height and bulk requirements or increasing floor area ratios, aim to encourage denser development, increase housing supplies, and thus improve housing affordability.

However, upzonings have ignited the hot-button issue of gentrification. In several cities, upzoning policies have driven a wedge between those fighting for supply-side solutions and tenant advocates. Supply-side advocates, often those affiliated with the yes-in-my-backyard (YIMBY) movement, have argued that upzonings will improve housing affordability, pointing to recent studies (including one in New York and another in 11 cities) that have found that new market-rate development does not trigger increases in surrounding housing costs. Tenant advocates have countered that upzonings will fuel real estate speculation and gentrification, as landlords of upzoned buildings will be incentivized to sell their properties at inflated prices reflecting their added development potential. In doing so, some advocates have pointed to studies (such as this one in Chicago) suggesting that upzonings are in fact associated with increases in property prices, at least in the short-term.

Despite these tensions, minimal empirical work has examined the effects of upzonings on gentrification. Aiming to address this gap in the literature, I recently conducted a study examining how a series of upzonings implemented in New York City in the early 2000s interacted with subsequent gentrification pressures (using growth in the non-Hispanic white population as a proxy for gentrification). I find that upzoning activity is positively and significantly associated with the odds of a census tract becoming whiter, suggesting that upzonings might accelerate, rather than temper, gentrification pressures in the short-term.

Given these findings, should cities continue to uphold upzonings as a core solution to the nation’s housing affordability crisis? The answer is that scholars must conduct additional research on upzonings in order to better understand their effects. Upzonings are far from one shape and size. For example, the Seattle City Council recently approved the upzoning of 27 neighborhoods hubs throughout the city, requiring that developers building in upzoned areas include below market-rate units in their buildings or contribute fees to an affordable housing fund. Portland’s recent upzoning measures, which allow up to four units on all residential lots throughout the city, allow developers to build up to six units per lot if at least half of the units are reserved for low-income tenants. Other upzonings, such as those implemented in New York City in the early 2000s, were not linked to mandatory inclusionary housing (which has since changed under the de Blasio administration).

Given these differences in upzoning policies, additional research is needed to better understand how different kinds of upzoning policies shape subsequent neighborhood change. For example, to what extent do upzoning policies that incorporate stronger tenant protections, such as just-cause eviction standards, ward off displacement pressures? How do upzonings impact housing affordability in different real estate submarkets in the long term? How do upzoning policies that are targeted at wealthy neighborhoods impact gentrification?

Although research on upzonings is still nascent, one conclusion can be drawn. Cities need to develop solutions to dismantle exclusionary zoning practices and the racist ideologies that they promote. Zoning regulations that allow for added residential density hold substantial promise to increase the much-need housing supply and push back on the racist legacy of low-density exclusionary zoning. If cities are to adopt upzoning policies as the key policy tool to address the nation’s housing affordability crisis, land use scholars need to conduct additional research into how different variants of upzoning policies shape subsequent gentrification, displacement, and housing affordability.

Jenna Davis is an urban planning PhD student in the Graduate School of Architecture, Planning, and Preservation at Columbia University. Her current research examines how land use regulations interact with neighborhood change in U.S. cities.