Urban upzonings have been rare across the world, and many of the most significant occurred only in the past 5–10 years or less. One exception is the canton of Zurich, Switzerland, where cities and towns have been relaxing land use restrictions for over 25 years. Simon Büchler and Elena Lutz share their research on the long-term effects of these reforms on housing supply and rents, and the kinds of zoning changes that produce real-world results.

Show notes:

• Büchler, S., & Lutz, E. (2024). Making housing affordable? The local effects of relaxing land-use regulation. Journal of Urban Economics, 143, 103689.
• Anagol, S., Ferreira, F. V., & Rexer, J. M. (2021). Estimating the economic value of zoning reform (No. w29440). National Bureau of Economic Research.
• Greenaway-McGrevy, R. (2023). Can zoning reform reduce housing costs? Evidence from rents in Auckland. Economic Policy Centre. 
• Asquith, B. J., Mast, E., & Reed, D. (2023). Local effects of large new apartment buildings in low-income areas. Review of Economics and Statistics, 105(2), 359-375.
• Gyourko, J., Mayer, C., & Sinai, T. (2013). Superstar Cities. American Economic Journal: Economic Policy, 5(4), 167-199.
• Mast, E. (2024). Warding off development: Local control, housing supply, and nimbys. Review of Economics and Statistics, 106(3), 671-680.
• Mast, E. (2023). JUE Insight: The effect of new market-rate housing construction on the low-income housing market. Journal of Urban Economics, 133, 103383.
• Bratu, C., Harjunen, O., & Saarimaa, T. (2023). JUE Insight: City-wide effects of new housing supply: Evidence from moving chains. Journal of Urban Economics, 133, 103528.

What happens to housing quality and affordability when any proposed development can be vetoed? Can the public sector reliably deliver most of the housing that people need? If it can, should it? Ant Breach shares insights from the Centre for Cities’ report on the United Kingdom’s homebuilding crisis.

Show notes:

• Watling, S., & Breach, A. (2023). The housebuilding crisis: The UK’s 4 million missing homes. Center for Cities.
• Watling, S. (2023). Why Britain doesn’t build. Works In Progress.
• Episode 59 of UCLA Housing Voice with Paavo and Mike M., on the costs of discretionary housing approvals.

In a previous episode we discussed Auckland’s unprecedented upzoning and its effect on housing production and land prices. This time we’re joined by Eleanor West to talk about the political, social, and economic conditions that made the reforms possible — not only in Auckland, but across New Zealand.

Show notes:

• West, E. (2024). Up-zoning New Zealand: the localisation of a globally mobile policy idea (Policy paper no. 003). University of Auckland: Economic Policy Centre, Urban and Spatial Economics Hub. 
• West, E., & Garlick, M. (2024). Upzoning New Zealand. Works in Progress.
• Episode 45 of UCLA Housing Voice with Ryan Greenaway-McGrevy, on the effects of Auckland’s upzoning on housing production and land prices.
• Greenaway-McGrevy, R., & Phillips, P. C. (2023). The impact of upzoning on housing construction in Auckland. Journal of Urban Economics, 136, 103555.
• Greenaway-McGrevy, R. (2023). Can zoning reform reduce housing costs? Evidence from rents in Auckland. Economic Policy Centre. WP016, 203.
• Two of the recent articles on how people are more skeptical of supply-and-demand arguments for housing compared to other goods and services, while also being very persuadable:
  • Nall, C., Elmendorf, C. S., & Oklobdzija, S. (2024). Folk economics and the persistence of political opposition to new housing. Available at SSRN 4266459.
  • Elmendorf, C. S., Nall, C., & Oklobdzija, S. (2024). Do Housing Supply Skeptics Learn? Evidence from Economics and Advocacy Treatments. Available at SSRN 4955033.
• Episode 23 of UCLA Housing Voice with Michael Hankinson, on the relationship between at-large vs district-level political representation and housing supply.
• YouTube: The Spinoff vs the worst Auckland City Council meeting of all time.

Inclusionary zoning policies are commonly used to produce affordable housing and “social mix” in the U.S., but what about in Europe, where public housing and strong social welfare programs have historically met those needs? Anna Granath Hansson shares research on emerging inclusionary housing policies in the Scandinavian countries of Sweden, Norway, and Denmark.

Show notes:

• Granath Hansson, A., Sørensen, J., Nordahl, B. I., & Tophøj Sørensen, M. (2024). Contrasting inclusionary housing initiatives in Denmark, Sweden, and Norway: how the past shapes the present. Housing Studies, 1-22.
• Previous episodes on inclusionary housing/inclusionary zoning:
  • Episode 77: Upzoning With Strings Attached with Jacob Krimmel and Maxence Valentin
  • Episode 31: Inclusionary Zoning with Emily Hamilton
  • Episode 79: Who Pays For Inclusionary Zoning with Shane Phillips
• More information on the EU court case about Denmark’s “ghetto law.”
• Sightline article on Portland’s fully-funded affordability mandate.

Inclusionary zoning policies use the market to produce affordable housing, but nothing comes for free. So who pays? Shane takes the guest seat to discuss his analysis of IZ in Los Angeles, making the case that it’s not developers or high-income renters who bear the cost, but all renters — poor, middle income, and wealthy alike.

Show notes:

• Phillips, S. (2024). Modeling Inclusionary Zoning’s Impact on Housing Production in Los Angeles: Tradeoffs and Policy Implications. UC Berkeley Terner Center for Housing Innovation and UCLA Lewis Center for Regional Policy Studies. 
• UCLA Housing Voice Episode 31: Inclusionary Zoning with Emily Hamilton
• Manville, M., Monkkonen, P., Gray, N., & Phillips, S. (2023). Does Discretion Delay Development? The impact of approval pathways on multifamily housing’s time to permit. Journal of the American Planning Association, 89(3), 336-347.
• UCLA Housing Voice Episode 59: The Costs of Discretion with Paavo Monkkonen and Mike Manville (conversation about our research on the TOC approval process).
• Elmendorf, C. S., Marantz, N., & Monkkonen, P. (2021). A Review of California’s Process for Determining, and Accommodating, Regional Housing Needs. Background paper prepared for the California State Auditor.
• Wikipedia page on the Laffer curve.
• Phillips, S., & Ofek, M. (2022). How Will the Measure ULA Transfer Tax Initiative Impact Housing Production in Los Angeles? UCLA Lewis Center for Regional Policy Studies.
• UCLA Housing Voice Episode 77: Upzoning With Strings Attached with Jacob Krimmel and Maxence Valentin.
• Details on the reduction of inclusionary requirements approved by the San Francisco Board of Supervisors on a 10–1 vote.
• UCLA Housing Voice Episode 78: Building Height and Construction Costs with Anthony Orlando.

Cities have lived with exclusionary zoning for decades, if not generations. Is inclusionary zoning the answer? Inclusionary zoning, or IZ, requires developers to set aside a share of units in new buildings for low- or moderate-income households, seeking to increase the supply of affordable homes and integrate neighborhoods racially and socioeconomically. But how well does it accomplish these goals? This week we’re joined by the Mercatus Center’s Dr. Emily Hamilton to discuss her research on how IZ programs have impacted homebuilding and housing prices in the Washington, D.C. region, and the ironic reality that the success of inclusionary zoning relies on the continued existence of exclusionary zoning. Also, Shane and Mike rant about nexus studies. Originally aired in 2022.

Show notes:

• Hamilton, E. (2021). Inclusionary zoning and housing market outcomes. Cityscape, 23(1), 161-194.
• Manville, M., & Osman, T. (2017). Motivations for growth revolts: Discretion and pretext as sources of development conflict. City & Community, 16(1), 66-85.
• Bento, A., Lowe, S., Knaap, G. J., & Chakraborty, A. (2009). Housing market effects of inclusionary zoning. Cityscape, 7-26.
• Li, F., & Guo, Z. (2022). How Does an Expansion of Mandatory Inclusionary Housing Affect Housing Supply? Evidence From London (UK). Journal of the American Planning Association, 88(1), 83-96.
• Schleicher, D. (2012). City unplanning. Yale Law Journal, 7(122), 1670-1737.
• Phillips, S. (2022). Building Up the" Zoning Buffer": Using Broad Upzones to Increase Housing Capacity Without Increasing Land Values. UCLA Lewis Center for Regional Policy Studies.
• Background on the inclusionary zoning program in Los Angeles (struck down in court, but later enabled by the state legislature).
• More on housing voucher policy in our interview with Rob Collinson.
• More on minimum lot size reform in our interview with M. Nolan Gray.
• A blog post questioning whether new market-rate housing actually “creates” demand for low-income housing.
• Los Angeles Affordable Housing Linkage Fee nexus study.

We’ve long known that building more homes helps keep prices in check at the regional or metro area level, but what about the house down the street? Evan Mast shares two research studies that shed light on this important and controversial question. Originally aired in 2021. Updated show notes.

Show notes:

• Mast, E. (2023). JUE Insight: The effect of new market-rate housing construction on the low-income housing market. Journal of Urban Economics, 133, 103383.
• Asquith, B. J., Mast, E., & Reed, D. (2023). Local effects of large new apartment buildings in low-income areas. Review of Economics and Statistics, 105(2), 359-375.
• Bratu, C., Harjunen, O., & Saarimaa, T. (2023). JUE Insight: City-wide effects of new housing supply: Evidence from moving chains. Journal of Urban Economics, 133, 103528.
• Li, X. (2022). Do new housing units in your backyard raise your rents? Journal of Economic Geography, 22(6), 1309-1352.
• Guerrieri, V., Hartley, D., & Hurst, E. (2013). Endogenous gentrification and housing price dynamics. Journal of Public Economics, 100, 45-60.
• Phillips, S., Manville, M., & Lens, M. (2021). Research Roundup: The Effect of Market-Rate Development on Neighborhood Rents. UCLA Lewis Center for Regional Policy Studies.
• Diamond, R., McQuade, T., & Qian, F. (2019). The effects of rent control expansion on tenants, landlords, and inequality: Evidence from San Francisco. American Economic Review, 109(9), 3365-94.
• Liu, L., McManus, D. A., & Yannopoulos, E. (2020). Geographic and Temporal Variation in Housing Filtering Rates. Available at SSRN.
• “Opportunities and Obstacles for Rental Housing Registries,” Jan. 20 Lewis Center event with Assembly member Buffy Wicks and Catherine Bracy. https://youtu.be/vaDTWHxk-I8 

Building taller lets us fit more homes on valuable urban land, but more homes doesn’t necessarily mean more affordable. Anthony Orlando joins to share his research on why taller isn’t always better — and the circumstances where it definitely is.

Show notes:

• Eriksen, M. D., & Orlando, A. W. (2022). Returns to scale in residential construction: The marginal impact of building height. Real Estate Economics, 50(2), 534-564.
• Episode 69 of UCLA Housing Voice, with Mike Eriksen discussing the Low Income Housing Tax Credit and “Crowd Out”
• Giuliano, G., Redfearn, C., Agarwal, A., & He, S. (2012). Network Accessibility and Employment Centres. Urban Studies, 49(1), 77-95.
• An, B., Orlando, A. W., & Rodnyansky, S. (2019). The Physical Legacy of Racism: how redlining cemented the modern built environment. Available at SSRN 3500612.
• Eriksen, M. D., & Orlando, A. W. (2024). A Cost Decomposition of Break-Even Rents for New Multifamily Housing Development. Journal of Housing Economics, 102012.

Changing zoning rules to allow taller and denser buildings may cause land values to go up, and public officials may try to “capture” this added value by requiring affordable units in new developments. But what happens when costs and benefits are out of balance? Seattle offers a cautionary tale.

Show notes:

• Krimmel, J., & Wang, B. (2023). Upzoning With Strings Attached: Evidence From Seattle’s Affordable Housing Mandate. Cityscape, 25(2), 257-278.
• City of Seattle webpage for the Mandatory Housing Affordability program.
• Lebret, D., Liu, C., & Valentin, M. (2024). Carrot and Stick Zoning. UEA 13th European Meeting.
• Manville, M., & Osman, T. (2017). Motivations for Growth Revolts: Discretion and pretext as sources of development conflict. City & Community, 16(1), 66-85.
• Phillips, S. (2022). Building Up the" Zoning Buffer": Using Broad Upzones to Increase Housing Capacity Without Increasing Land Values. UCLA Lewis Center for Regional Policy Studies.

When the demand for housing rises, which kinds of neighborhoods respond by building more homes, and which just get more expensive? Nathaniel Baum-Snow joins to discuss his research on the different responses of urban, suburban, and exurban neighborhoods, and the many forms “supply” can take.

Show notes:

• Baum-Snow, N., & Han, L. (2024). The Microgeography of Housing Supply. Journal of Political Economy, 132(6), 1897-1946.
• Alameldin, M., & Karlinsky, S. 2024). Construction Defect Liability in California: How Reform Could Increase Affordable Homeownership Opportunities. UC Berkeley Terner Center for Housing Innovation.
• Saiz, A. (2010). The Geographic Determinants of Housing Supply. The Quarterly Journal of Economics, 125(3), 1253-1296.
• UCLA Lewis Center research on housing demolition and redevelopment trends in Los Angeles.