Selvamani, Sona

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The Effect of Upzoning on Single-Family Building Permits: An Intermediate Term Analysis of the Minneapolis 2040 Plan
(2023-01-01) Selvamani, Sona
In 2020, over 30% of households had unaffordable rent. Policymakers currently believe the solution to this affordable housing crisis is to allow for denser development in areas by implementing less restrictive zoning policies. While evidence shows that increased restrictiveness in zoning can negatively affect prices or the supply of housing, there is little evidence on whether upzoning can reverse these consequences. This paper uses Minneapolis city’s 2019 ban on single-family (R1) zoning to close this gap and find out what effects a more liberal change in zoning policy might have on building permits in the area. I use the U.S Census Bureau Building Permits Survey to test the effect of this policy on construction permitting from 2016-2021. Statistical results prove that there was a reduction in single-family permitting in Minneapolis after the policy implementation date compared to other communities in Hennepin County, MN. However, there is no conclusive difference in total units and multi-family units permitted after the policy was implemented. This paper sheds light on the intermediate term effects of upzoning and encourages policymakers to assess these policies more carefully.