A Governing article (2019-07) explored the mixed results urban areas have experienced when upzoning from detached single-family housing. As previously reported on Conduit Street, up-zoning has recently been enacted or considered by several cities and states. The Governing article looked at both these recent efforts and several older up-zonings and found mixed results regarding increased housing capacity, affordability, gentrification, and political fallout.
The article discussed the history of zoning and the invidious use of single-family zoning and restrictive covenants to segregate areas along racial, ethnic, or class lines. The article looked at the up-zoning efforts of: (1) Minneapolis; (2) Seattle; (3) Chicago; (4) New York City; (5) Philadelphia; and (6) California and San Francisco.
From the article:
A growing number of cities are looking to up-zone, to allow developers to build higher and denser apartment buildings in what were single-family neighborhoods. More supply, the argument goes, will drive down rents. But up-zoning impacts have been hotly debated. In New York, up-zoning did increase supply, but it did not drive down prices. “It can be a double-edged sword,” says Diana Lind, author of the forthcoming book, Brave New Home: The Smarter, Cheaper, Happier Future of Housing. “It doesn’t always create more affordability, but it does fix the capacity issue.”
In December of 2018, Minneapolis became the first city in the nation to up-zone its entire jurisdiction. The article noted that the action was highly divisive among residents and spawned an opposition lawsuit citing the pollution and environmental degradation the up-zoning could cause. Some proponents of the up-zoning have accused those raising the environmental concerns of wanting to maintain segregation. The long-term effect of the up-zoning has yet to be determined.
In an effort to prevent gentrification, high-rises will only be allowed near transit hubs while three-unit buildings are allowed across the city. Ten percent of all new units must be affordable to those earning less than 60 percent of the average median income for Minneapolis ($36,473). The city also provides some financial incentives for those developers who go beyond the minimum requirement.
According to the article, Seattle home prices have seen the third highest rises in the nation over the last six years, only being beaten by San Francisco and Las Vegas. Seattle recently followed the lead of Minneapolis and up-zoned, but did so in a more narrow fashion. Initially the city wanted to up-zone 50 neighborhoods but ultimately settled on 27 after fierce pushback from a coalition of neighborhood groups. The “Grand Bargain” as it is referred to be some locals, is estimated to bring an additional 4,000 affordable units to the city.
Up-zoning in Chicago did not spur reinvestment or redevelopment in economically challenged neighborhoods. From the article:
In Chicago, up-zoning hasn’t delivered very well on its promise to draw investment. Yonah Freemark, an urban scholar at the Massachusetts Institute of Technology, has studied the impact of up-zoning adopted by Chicago in 2013 and expanded in 2015. Increasing density and lifting height restrictions weren’t enough to lure developers to the lowest-income neighborhoods. “Zoning is all based on a market reaction. If developers don’t want to respond to your zoning change, then nothing will get built,” Freemark says. “We have seen low-income and underdeveloped communities rezone, and investors still don’t want to build in those communities.” Up-zoning alone, according to Freemark, won’t unleash the market to provide enough housing to bring down costs. Cities will have to do much more.
New York City
Up-zoning efforts in the early 2000s produced mixed results for New York City. The city targeted low-income areas in Queens and Brooklyn for up-zoning and down-zoned more affluent neighborhoods in those districts. The move did produce new housing stock (180,000 apartment units in the first six years) but few were affordable. Ultimately, gentrification occurred, pushing out low-income minorities that the up-zoning was supposed to help.
Philadelphia attempted an up-zoning in 2011 that remapped 12,000 acres of land and clustered high-density development near transit hubs. The idea was to target blighted areas. However, the city has not seen the same growth pressures as other areas and its population is 25 percent below its peak in 1950. Ultimately, only 40 percent of the proposed area to be up-zoned has been rezoned due to local neighborhood concerns and has not revitalized the targeted neighborhoods or created affordable housing options. From the article:
In many of the places where rezoning has taken place, luxury condominiums have sprouted up. Around Temple University in North Philadelphia, it’s not condominiums being built, but new student housing, helped by rezoning. The locals call it “dormification.”
California and San Francisco
California is considering legislation for the second year in a row (S.B. 50) to up-zone in order to create more affordable housing for its residents. However, the effort has met with opposition from both neighborhood groups and local governments (the Los Angeles City Council unanimously passed a resolution opposing the bill). Opponents have argued that the bill would add unwanted crowding to struggling residential communities and lead to the “Manhattanization” of certain areas. The bill has been locked up in a committee and will not be on the legislative agenda again until 2020.
San Francisco is faced with its own skyrocketing housing costs and has attempted to address the problem through a 2018 pilot program that trades density and height to developers in exchange for affordable housing units. The city hopes the program will increase affordable housing stock while avoiding gentrification.