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Upzoning increases land prices. It only results in a decrease in per-unit average house prices if it is accompanied with development (more housing units per squ

Upzoning increases land prices. It only results in a decrease in per-unit average house prices if it is accompanied with development (more housing units per square metre of land). Upzoning doesn't guarantee increased development as developers only build when it makes financial sense to do so, and flooding the market with more units would decrease the potential profit they can make. Existing residents who don't develop their land usually end up with a big windfall of higher land prices, because their large lot sizes could have many more housing units built on it with new upzoning laws. Now, they still might revolt for other reasons, like not wanting undesirables like people poorer than themselves to move in next door, or not wanting to see as many houses in their morning walk, but from a financial sense, upzoning is a big positive for existing landowners.

cyberax 3y ago
> It only results in a decrease in per-unit average house prices It never does. Upzoning does NOT reduce per-unit prices, but it certainly increases everyone's misery.
- CydeWeys 3y ago
  Ah yes, real estate prices are famously low in the most upzoned parts of the country (Manhattan). If you can build a 100 floor skyscraper on a piece of land, that land is insanely valuable!
  - bobthepanda 3y ago
    The land is valuable because it is the only land zoned that way. You can’t build a building that tall in Flushing NY. If you could build 100 floor skyscrapers in the entire metropolitan area, this advantage goes away.
    - cyberax 3y ago
      Brooklyn's population density is only half of that in Manhattan, and there's plenty of new construction there. Guess what it does to prices?
      - theluketaylor 3y ago
        You're reading the demand/supply situation backwards. Even with all the construction in Brooklyn, supply is failing to meet demand, therefore prices are going up. We've failed to meet supply in urban spaces for several generations now and have a massive deficit to pay off before adding any supply can actually drive prices down; we're barely adding enough units to affect the rate of increase of prices.
        cyberax 3y ago
        > You're reading the demand/supply situation backwards. No. I'm reading it exactly right. Density _causes_ higher prices. It makes it easier to create jobs near dense locations, which in turn makes it more attractive for people to move in. This in turn increases housing costs.
        HPsquared 3y ago
        It's a chicken and egg problem. But remember an egg by itself wouldn't survive, and a single chicken in isolation can't produce a viable egg.
        theluketaylor 3y ago
        That's all only a problem when supply of housing is constricted, which it has been for generations in all urban spaces. Otherwise it's just wealth generation. It's also a problem when economic activity is limited to a handful of key urban spaces, but that isn't true. There are plenty of places to go make a good living. There just isn't anywhere to live. There should be plenty of different levels of density for people to choose to live in as everyone has different preferences. What's not sustainable in any way is exclusive single family zoning. If, as so many backers of exclusionary zoning claim, people only want to live in SFH, why would we need a law to force that to be the only built form? Surely every single unit built of any other type would fail to find a resident.
      - bobthepanda 3y ago
        Fun fact: during the Bloomberg administration, more land was actually downzoned and upzoned. https://www.politico.com/states/new-york/city-hall/story/2014/02/the-quiet-massive-rezoning-of-new-york-078398 https://www.politico.com/states/new-york/city-hall/story/201... This had the effect of driving all the developers into fewer land parcels, hiking up prices. New York has not substantially deviated from this zoning model since then.
  - apsurd 3y ago
    I learned this in 6th grade. You need bedrock to build skyscrapers. Laws of physics and all...
    - CydeWeys 3y ago
      That knowledge is severely out of date, then. You don't need bedrock to build skyscrapers, and indeed the tallest skyscraper in the world, the Burj Khalifa, is built on top of sand with no connection to bedrock whatsoever. You just need to pour immense amounts of concrete to serve as a foundation.
      - apsurd 3y ago
        Which is cost prohibitive and doesn't make sense for any other entity other than "let's light money on fire + enslave people to flex so the cool kids like us" UAE. it's not a good look. hope my comment doesn't flag me in unforeseen ways 20 years from now. To be clear, I'm saying effectively yep need bedrock otherwise it makes zero actual sense. (I do take you point, and lesson learned on my part)
        CydeWeys 3y ago
        It's not cost prohibitive, it's a technique that is widely used in US cities too. The cost of building the foundation is still small relative to the cost of acquiring the land and building the rest of the building.
- kasey_junk 3y ago
  Do you have a single data point to back up your assertion? Because the places I’ve seen that have embraced upzoning seem to be counter your assertion https://www.pewtrusts.org/en/research-and-analysis/articles/2024/01/04/minneapolis-land-use-reforms-offer-a-blueprint-for-housing-affordability https://www.pewtrusts.org/en/research-and-analysis/articles/...
  - cyberax 3y ago
    SF has not built anything, but rents decreased much more than in MN: https://www.sfchronicle.com/realestate/article/sf-rent-prices-18534829.php https://www.sfchronicle.com/realestate/article/sf-rent-price... Rents right now are an unreliable indicator because they are heavily affected by the downtown blights that are spreading in many cities. Sale prices are much more reliable, and Minneapolis prices (as expected) grew: https://www.redfin.com/city/10943/MN/Minneapolis/housing-market https://www.redfin.com/city/10943/MN/Minneapolis/housing-mar...
    - theluketaylor 3y ago
      Zoning alone can only affect prices when there is an arbitrage opportunity to build something in location A that isn't possible in nearby location B. When entire cities upzone across the board like Minneapolis there is no arbitrage opportunity, so prices are not going up specifically because the zoning was changed. Prices are increasing because there is a chronic shortage of places to lives near economic opportunity and high demand to live somewhere you can make a living.
      - cyberax 3y ago
        > Prices are increasing because there is a chronic shortage of places to lives near economic opportunity and high demand to live somewhere you can make a living. Yes. And the solution is not to drive people into dense slums, but to make sure that jobs are available outside of city cores. It will require concerted action, probably something like cap-and-trade for dense office space.
- ozzydave 3y ago
  I live on a street in Berkeley that was not red-lined, so it has single family homes and fourplexes. It’s great, we love it. You can choose to be miserable but it’s got nothing to do with whether your neighbors can afford a home.
no_wizard 3y ago
This is why zoning reform should be coupled with a Land Value Tax
- klempner 3y ago
  Unfortunately such a tax would be limited by prop 13 in California. While the proposals here can be implemented on a local level, any change to prop 13 would be a state level ballot proposition. (For the record, I'd love to see reform of prop 13. While I love the idea of smoothing out over a number of years the impact of sudden inflation or increases in local housing prices on existing residents, it should be a smoothing rather than an entitlement for long term owners of multi-million dollar homes to avoid property taxes.)
jjav 3y ago
> Now, they still might revolt for other reasons, like not wanting undesirables like people poorer than themselves to move in next door, or not wanting to see as many houses in their morning walk, but from a financial sense, upzoning is a big positive for existing landowners. This is a very uncharitable take. People choose a place to live based on criteria they like. If you want to live in a super dense city you might gravitate to Manhattan. If you want to live in a quiet suburb you end up in such a place. If suddenly that reality is torn down and substituted for something you didn't want, it's going to hurt. If you wanted a quiet suburb and you found it, you won't be happy if suddenly all your neighbor houses are torn down and replaced with apartment buildings. It has nothing to do with "not wanting undesirables". It is because the conditions they wanted and bought into are no longer there. > from a financial sense, upzoning is a big positive for existing landowners Except for house flippers, people don't care about the financial sense. A house is a home, in a place they like. Telling someone that the neighborhood they cared about it no longer a reality but it's ok because they made money, will not satisfy anyone. It's not about money.
- astrange 3y ago
  > This is a very uncharitable take. You should go to a city council meeting and see how NIMBY homeowners behave. It is impossible to be worse than they are and it's impossible to describe them uncharitably. You can say "they just like their neighborhoods" all you like but they hate poor people, young people, richer people, anyone who might park a car in front of their house, anyone who might use all the parking spots at the grocery store, any men (they'll molest their daughters, you know), and anyone who might approve a cell phone tower (it'll give them 5G cancer). The above will be communicated half in claims they've lived there longer than you and you're a developer shill / corporate plant and half in death threats.
  - jjav 3y ago
    > but they hate You paint with a very broad brush. I have no doubt that for each aspect you list, you can indeed find an example of some extremist who hates it. But the average regular person doesn't particularly hate any of these, they just want to live in their home in an area they like. > You can say "they just like their neighborhoods" I assume you have selected place(s) to live? Did you have any criteria for selecting the area? Most people have a list of things they absolutely want, and deal breakers they won't put up with. So you find a home that meets these. This is what I mean by they like the neighborhood they selected when making that decision. Is it at all surprising that after they selected a suitable neighborhood, they don't particularly want it to transform into something completely different that no longer meets any of their criteria?
astrange 3y ago
> Upzoning doesn't guarantee increased development as developers only build when it makes financial sense to do so, and flooding the market with more units would decrease the potential profit they can make. This doesn't really matter; developers aren't a cartel and they don't care if the margin on new projects goes down. They only have to care that the smaller margin goes to them and not someone else. (To the extent they are a cartel, it's because they got one enforced by downzoning, because only legal force can keep people in the cartel.)
- BirdieNZ 3y ago
  Developers aren't a cartel, but they respond to incentives just like anyone else. https://www.fresheconomicthinking.com/p/upzoning-predictions-versus-reality https://www.fresheconomicthinking.com/p/upzoning-predictions... For one example of how upzoning alone doesn't result in developers exceeding the market saturation rate. To be clear, I support upzoning but I think it should be accompanied with an increase in the holding cost of land, so landowners are incentivised to develop now rather than later.
  - astrange 3y ago
    That can be assisted with countercyclical housing policy, like subsidizing construction or a public housing developer. The US does tons of this on the demand side already, but of course if you limit supply too hard that just makes everything infinitely expensive.

cyberax 3y ago

> It only results in a decrease in per-unit average house prices It never does. Upzoning does NOT reduce per-unit prices, but it certainly increases everyone's misery.

CydeWeys 3y ago
Ah yes, real estate prices are famously low in the most upzoned parts of the country (Manhattan). If you can build a 100 floor skyscraper on a piece of land, that land is insanely valuable!
- bobthepanda 3y ago
  The land is valuable because it is the only land zoned that way. You can’t build a building that tall in Flushing NY. If you could build 100 floor skyscrapers in the entire metropolitan area, this advantage goes away.
  - cyberax 3y ago
    Brooklyn's population density is only half of that in Manhattan, and there's plenty of new construction there. Guess what it does to prices?
    - theluketaylor 3y ago
      You're reading the demand/supply situation backwards. Even with all the construction in Brooklyn, supply is failing to meet demand, therefore prices are going up. We've failed to meet supply in urban spaces for several generations now and have a massive deficit to pay off before adding any supply can actually drive prices down; we're barely adding enough units to affect the rate of increase of prices.
      - cyberax 3y ago
        > You're reading the demand/supply situation backwards. No. I'm reading it exactly right. Density _causes_ higher prices. It makes it easier to create jobs near dense locations, which in turn makes it more attractive for people to move in. This in turn increases housing costs.
        HPsquared 3y ago
        It's a chicken and egg problem. But remember an egg by itself wouldn't survive, and a single chicken in isolation can't produce a viable egg.
        theluketaylor 3y ago
        That's all only a problem when supply of housing is constricted, which it has been for generations in all urban spaces. Otherwise it's just wealth generation. It's also a problem when economic activity is limited to a handful of key urban spaces, but that isn't true. There are plenty of places to go make a good living. There just isn't anywhere to live. There should be plenty of different levels of density for people to choose to live in as everyone has different preferences. What's not sustainable in any way is exclusive single family zoning. If, as so many backers of exclusionary zoning claim, people only want to live in SFH, why would we need a law to force that to be the only built form? Surely every single unit built of any other type would fail to find a resident.
    - bobthepanda 3y ago
      Fun fact: during the Bloomberg administration, more land was actually downzoned and upzoned. https://www.politico.com/states/new-york/city-hall/story/2014/02/the-quiet-massive-rezoning-of-new-york-078398 https://www.politico.com/states/new-york/city-hall/story/201... This had the effect of driving all the developers into fewer land parcels, hiking up prices. New York has not substantially deviated from this zoning model since then.
- apsurd 3y ago
  I learned this in 6th grade. You need bedrock to build skyscrapers. Laws of physics and all...
  - CydeWeys 3y ago
    That knowledge is severely out of date, then. You don't need bedrock to build skyscrapers, and indeed the tallest skyscraper in the world, the Burj Khalifa, is built on top of sand with no connection to bedrock whatsoever. You just need to pour immense amounts of concrete to serve as a foundation.
    - apsurd 3y ago
      Which is cost prohibitive and doesn't make sense for any other entity other than "let's light money on fire + enslave people to flex so the cool kids like us" UAE. it's not a good look. hope my comment doesn't flag me in unforeseen ways 20 years from now. To be clear, I'm saying effectively yep need bedrock otherwise it makes zero actual sense. (I do take you point, and lesson learned on my part)
      - CydeWeys 3y ago
        It's not cost prohibitive, it's a technique that is widely used in US cities too. The cost of building the foundation is still small relative to the cost of acquiring the land and building the rest of the building.
kasey_junk 3y ago
Do you have a single data point to back up your assertion? Because the places I’ve seen that have embraced upzoning seem to be counter your assertion https://www.pewtrusts.org/en/research-and-analysis/articles/2024/01/04/minneapolis-land-use-reforms-offer-a-blueprint-for-housing-affordability https://www.pewtrusts.org/en/research-and-analysis/articles/...
- cyberax 3y ago
  SF has not built anything, but rents decreased much more than in MN: https://www.sfchronicle.com/realestate/article/sf-rent-prices-18534829.php https://www.sfchronicle.com/realestate/article/sf-rent-price... Rents right now are an unreliable indicator because they are heavily affected by the downtown blights that are spreading in many cities. Sale prices are much more reliable, and Minneapolis prices (as expected) grew: https://www.redfin.com/city/10943/MN/Minneapolis/housing-market https://www.redfin.com/city/10943/MN/Minneapolis/housing-mar...
  - theluketaylor 3y ago
    Zoning alone can only affect prices when there is an arbitrage opportunity to build something in location A that isn't possible in nearby location B. When entire cities upzone across the board like Minneapolis there is no arbitrage opportunity, so prices are not going up specifically because the zoning was changed. Prices are increasing because there is a chronic shortage of places to lives near economic opportunity and high demand to live somewhere you can make a living.
    - cyberax 3y ago
      > Prices are increasing because there is a chronic shortage of places to lives near economic opportunity and high demand to live somewhere you can make a living. Yes. And the solution is not to drive people into dense slums, but to make sure that jobs are available outside of city cores. It will require concerted action, probably something like cap-and-trade for dense office space.
ozzydave 3y ago
I live on a street in Berkeley that was not red-lined, so it has single family homes and fourplexes. It’s great, we love it. You can choose to be miserable but it’s got nothing to do with whether your neighbors can afford a home.

no_wizard 3y ago

This is why zoning reform should be coupled with a Land Value Tax

klempner 3y ago
Unfortunately such a tax would be limited by prop 13 in California. While the proposals here can be implemented on a local level, any change to prop 13 would be a state level ballot proposition. (For the record, I'd love to see reform of prop 13. While I love the idea of smoothing out over a number of years the impact of sudden inflation or increases in local housing prices on existing residents, it should be a smoothing rather than an entitlement for long term owners of multi-million dollar homes to avoid property taxes.)

jjav 3y ago

> Now, they still might revolt for other reasons, like not wanting undesirables like people poorer than themselves to move in next door, or not wanting to see as many houses in their morning walk, but from a financial sense, upzoning is a big positive for existing landowners. This is a very uncharitable take. People choose a place to live based on criteria they like. If you want to live in a super dense city you might gravitate to Manhattan. If you want to live in a quiet suburb you end up in such a place. If suddenly that reality is torn down and substituted for something you didn't want, it's going to hurt. If you wanted a quiet suburb and you found it, you won't be happy if suddenly all your neighbor houses are torn down and replaced with apartment buildings. It has nothing to do with "not wanting undesirables". It is because the conditions they wanted and bought into are no longer there. > from a financial sense, upzoning is a big positive for existing landowners Except for house flippers, people don't care about the financial sense. A house is a home, in a place they like. Telling someone that the neighborhood they cared about it no longer a reality but it's ok because they made money, will not satisfy anyone. It's not about money.

astrange 3y ago
> This is a very uncharitable take. You should go to a city council meeting and see how NIMBY homeowners behave. It is impossible to be worse than they are and it's impossible to describe them uncharitably. You can say "they just like their neighborhoods" all you like but they hate poor people, young people, richer people, anyone who might park a car in front of their house, anyone who might use all the parking spots at the grocery store, any men (they'll molest their daughters, you know), and anyone who might approve a cell phone tower (it'll give them 5G cancer). The above will be communicated half in claims they've lived there longer than you and you're a developer shill / corporate plant and half in death threats.
- jjav 3y ago
  > but they hate You paint with a very broad brush. I have no doubt that for each aspect you list, you can indeed find an example of some extremist who hates it. But the average regular person doesn't particularly hate any of these, they just want to live in their home in an area they like. > You can say "they just like their neighborhoods" I assume you have selected place(s) to live? Did you have any criteria for selecting the area? Most people have a list of things they absolutely want, and deal breakers they won't put up with. So you find a home that meets these. This is what I mean by they like the neighborhood they selected when making that decision. Is it at all surprising that after they selected a suitable neighborhood, they don't particularly want it to transform into something completely different that no longer meets any of their criteria?

astrange 3y ago

> Upzoning doesn't guarantee increased development as developers only build when it makes financial sense to do so, and flooding the market with more units would decrease the potential profit they can make. This doesn't really matter; developers aren't a cartel and they don't care if the margin on new projects goes down. They only have to care that the smaller margin goes to them and not someone else. (To the extent they are a cartel, it's because they got one enforced by downzoning, because only legal force can keep people in the cartel.)

BirdieNZ 3y ago
Developers aren't a cartel, but they respond to incentives just like anyone else. https://www.fresheconomicthinking.com/p/upzoning-predictions-versus-reality https://www.fresheconomicthinking.com/p/upzoning-predictions... For one example of how upzoning alone doesn't result in developers exceeding the market saturation rate. To be clear, I support upzoning but I think it should be accompanied with an increase in the holding cost of land, so landowners are incentivised to develop now rather than later.
- astrange 3y ago
  That can be assisted with countercyclical housing policy, like subsidizing construction or a public housing developer. The US does tons of this on the demand side already, but of course if you limit supply too hard that just makes everything infinitely expensive.