Over the last five years, a number of cities and states in the U.S. \u2014 from Minneapolis to Maine, Oregon and California \u2014 have overturned rules that previously only allowed developers to build single-family homes in certain neighborhoods.\u00a0<\/p>\n
The push to eliminate single-family housing is premised on the desire to to create more housing units, while also making them more affordable and easing the cost of living.\u00a0<\/p>\n
The U.S. suffers from a national housing shortage \u2014 \u201cthe product of local restrictive zoning policies and other regulatory barriers that make it difficult to build a range of housing types at different price points,\u201d according to a 2023 report by the Joint Center for Housing Studies at Harvard University. The group estimated that 75% of land in many cities is zoned only for single-family homes.<\/p>\n
\n \u201c<\/span>Ending single-family zoning would, in theory at least, give way to builders constructing, and put more people in more homes on the same plot of land previously zoned to fit a single-family home.\u00a0\u201d<\/span>\n <\/p>\n<\/p><\/div>\n<\/p><\/div>\n Ending single-family zoning would, in theory at least, give way to builders constructing duplexes, fourplexes, or even multi-storey apartments, that would put more people in more homes on the same plot of land previously zoned to fit a single-family home.\u00a0<\/p>\n Have changes to zoning regulations in California and elsewhere created more housing units and met the nation\u2019s intense demand for homeownership? It may be too soon to tell, but the U.S. housing market seems to be increasingly leaning towards zoning as a key way to fix its supply problem.\u00a0<\/p>\n \u201cThe important thing to remember is this is an incremental change \u2014 this is not a cure-all to the housing crisis across the country,\u201d Daniel Kuhlmann, assistant professor of urban planning and real estate at the University of Arizona, told MarketWatch. Kuhlmann\u2019s research has examined the impact of ending single-family zoning in Minneapolis.\u00a0<\/p>\n Zoning refers to municipal code or local laws that divide land based on how it\u2019s used. For instance, some neighborhoods are zoned as agricultural, commercial, industrial, and residential. Cities can also zone residential neighborhoods such that developers can only build single-family homes, versus building apartments and condos.<\/p>\n And for many industry experts, zoning may be one of the more long-term levers that could help heal the housing market.<\/p>\n The U.S. housing market is currently at a standstill, as it finds itself running out of homes to sell to people. In June, the U.S. had fewer than one million previously-owned single-family homes available for sale to buyers, which is the lowest level in 40 years, while pent-up demand from home buyers leaves many competing against one another to win bids, driving up home prices.<\/p>\n In addition to changing zoning regulations, a desperate call to increase housing supply has led many groups \u2014 from home builders to politicians \u2014 to propose various ways to address the supply shortage, including doubling the amount of capital-gains tax exclusions to turning offices into homes.<\/p>\n \u201cZoning is now much higher on the political agenda,\u201d Richard Kahlenberg, author of \u201cExcluded: How Snob Zoning, NIMBYism, and Class Bias Build the Walls We Don\u2019t See,\u201d told MarketWatch in a recent episode of Barron\u2019s Live. The reason is simple, he added: \u201cHousing prices have skyrocketed.\u201d<\/p>\n Three years after the pandemic began, people continue to move away from big cities, in a large part because of higher prices, Kahlenberg added. \u201cIt\u2019s bad for the economy, it\u2019s bad for individual families, when you artificially constrain the supply of housing and ban multi-family housing.\u201d<\/p>\n Recent analysis by Yonah Freemark, a senior associate at the Urban Institute, found that areas that were recently re-zoned for denser housing in the short term may not necessarily experience more housing construction, but in the long term \u201clikely experience small increases\u201d compared to areas where no zoning changes were made.<\/p>\n But Freemark also noted that there may still not be enough data to make a clear conclusion. Early data suggests that \u201cupzoning\u201d \u2014 whereby density of housing is increased in a certain neighborhood \u2014 generates positive effects on regional construction and affordability, \u201cbut more research is needed,\u201d he stated.<\/p>\n In Minneapolis, which ended single-family zoning at the end of 2018, there hasn\u2019t been a giant surge of new duplexes and triplexes. The local government said that between January 2020, when the regulation took effect, and 2022, 41 new projects were approved for construction.\u00a0<\/p>\n \u201cEliminating single-family zoning is not a silver bullet for creating more housing choice or affordability,\u201d Jason Wittenberg, a code development manager for the city of Minneapolis, told MarketWatch last year.\u00a0<\/p>\n It takes a \u201cmulti-faceted approach that\u2019s required of a municipality to tackle housing,\u201d he added, from thinking more boldly about land use, and encouraging the political leadership to champion efforts to make housing more affordable and increase supply.<\/p>\n To be clear, not everyone agrees that zoning is the fix to the housing shortage: Zoning reform, or \u201cupzoning,\u201d has met considerable resistance from those who oppose new development, dubbed as NIMBYs, or Not In My Backyard. Many of these homeowners cite multiple reasons for opposing the construction of, say, a multi-unit dwelling in their neighborhood. Chief among those reasons: it would considerably change the look, feel, and traffic of the area.\u00a0<\/p>\nHow zoning helps housing supply<\/strong><\/h2>\n
Zoning law is not a silver bullet<\/strong><\/h2>\n