The growing case for zoning reform

Evidence from Minneapolis shows that zoning reform increases housing supply and slows rent growth, homelessness, and displacement of black residents. But does it reduce racial segregation?

As the housing affordability crisis has spread across the country, so has an understanding that zoning is largely to blame. Nationwide, most residential land allows only one home per lot (also known as single-family-only or exclusionary zoning). The rule came to prominence after the Supreme Court in 1917 barred localities from designating residential areas by race. Single-family-only zoning took over, achieving a similar result – persistent residential segregation driven by maintaining high housing prices, especially in mostly-white, suburban communities. Decades of prohibiting housing supply from meeting demand has led us to this point.

But can zoning reform get us out of it? Many housing policy experts and advocates (including us, in Just Action) argue that ending single family zoning is an essential way to address housing affordability and challenge segregation. But until recently there hasn’t been much evidence to support this claim because no such reforms had been in place long enough to meaningfully impact housing construction. We wrote about Minneapolis’s end to single-family-only zoning in Just Action but since it had only been recently adopted, not enough time had passed to evaluate the impact.

Now, we have some answers. The Pew Charitable Trusts analyzed Minneapolis’s efforts and found that zoning changes led to a significant increase in housing production compared to the rest of the state. From 2017 to 2022, the city increased its housing stock by 12% while rents increased by 1%. In comparison, the rest of Minnesota added 4% to its housing while rents went up 14%.

While the provision in the city’s comprehensive plan, Minneapolis 2040, that rezoned all single family lots to allow duplexes and triplexes, has gotten the most attention, it turns out that increases in the housing supply resulted more from other zoning reforms.

The city started to reduce parking requirements for new multifamily buildings in 2009 and by 2021 had eliminated all mandates to provide parking spaces with new housing development. This reduces construction costs and frees up more land for residential space. The 2040 plan also established minimum height requirements and made administrative approval automatic for apartment buildings near transit or in commercial corridors. These developments account for most of the new housing added during the time period studied. Only one percent of the new units were duplexes or triplexes, a result of rezoning single family lots. That reform’s impact was limited largely because building size and height limits remained unchanged, making it difficult to fit 2 or 3 units into the building area of one home.

Adding new housing and keeping rents stable contributed to an increase in the number of black residents in Minneapolis (as well as in Houston, which added 37,000 townhomes after reducing minimum lot sizes), while many other large cities’ African American populations have declined due to housing unaffordability. It has also led to the Minneapolis area’s homeless population decreasing by 12% between 2017 and 2022 while the rest of the state experienced a 14% increase.

Other studies have confirmed these findings. Localities that build more units have lower rents and fewer unhoused residents. Even when the units produced cater to higher-earning tenants, their moves into the buildings create openings for lower- and moderate-income renters elsewhere, keeping costs down for everyone.  Zoning is the key to this equation.

The lesson we can take from the Pew study is that carefully crafted zoning reforms can have a real impact on housing production, which can make a big difference in housing affordability, homelessness, and displacement of black residents.

However, researchers have not yet analyzed how these reforms have impacted neighborhood-level segregation. Minneapolis’s advocates of zoning reform, in particular the authorization of duplexes and triplexes on what had previously been single family lots, claimed that it would decrease the city’s racial segregation. The Pew report did not address whether the zoning changes have had this result or whether the increase in the city’s black population took place in already segregated African American neighborhoods. I hope that future research addresses these questions.

This year, 20 governors discussed housing affordability in their annual addresses and nine called for reducing regulatory barriers to housing construction. Local activists can harness this shift in focus on increasing housing supply, along with the growing evidence that zoning reform is good for our communities, to advocate similar changes in their own cities.

As more localities follow Minneapolis’s lead, advocates should press to ensure that the changes result in desegregating neighborhoods as well as increasing housing supply and affordability.

Researchers and advocates are releasing new information and resources to support these efforts almost daily. Just as I finished writing this post, this Urban Institute piece came across my feed, suggesting ways localities can embed equity in their zoning reforms. The recommendations focus on preventing displacement of lower-income residents when rezoning leads to new housing development in their neighborhoods. This is important. We also need attention on how to promote racial equity when housing supply increases in higher-opportunity, higher-cost areas.