There are limits to what upzoning can do; that said, upzoning appears capable of making a difference
Like many people, I’ve been following the land use story related to a new policy of permission, as of right, of Multiplexes across the City of Toronto. I do not follow the story closely. However, I’ve been intrigued with arguments advanced at an April 27, 2023 meeting of Toronto’s Planning and Housing Committee claiming that more intensive density across the City of Toronto will lead to lower rents as in Auckland, New Zealand and Minneapolis, Minnesota. We will see in five years time whether Toronto rents would decrease as has been the case in the latter two jurisdictions.
In the meantime, a May 23, 2023 New York Times article is entitled: “Imagine a Renters’ Utopia. It Might Look Like Vienna.”
An excerpt reads:
Auckland, New Zealand, might seem like a more applicable example. In 2016, the city, which has one of the most expensive housing markets in the world, “upzoned” 75 percent of its residential land, increasing its legal capacity for housing by about 300 percent in an effort to encourage multifamily-housing construction and tamp down prices. In areas that were upzoned, the total number of building permits granted (a way of estimating new construction) more than quadrupled from 2016 to 2021. As intended, the relative value of underdeveloped land increased, because it could suddenly host more housing, and the relative value of units in densely developed areas decreased, tempering sky-high prices. But there are limits to what upzoning can do. Often the benefits of allowing greater density are captured by developers, who price the new units far above cost. It doesn’t offer renters security or directly create the type of housing most needed: affordable housing.
April 27, 2023 Pew Charitable Trusts article
An April 27, 2023 Pew Charitable Trusts article, which provides another perspective on these matters, is entitled: “Rigid Zoning Rules Are Helping to Drive Up Rents in Colorado: Jurisdictions with updated regulations to allow more housing have held rents in check.”
An excerpt reads:
At the same time, jurisdictions that have begun allowing more housing have succeeded in sharply slowing the growth of rents. This is especially true for lower-cost forms of housing, such as apartments, accessory dwelling units, and homes on small lots or without required parking. At a time when families are spending a greater share of income on rent than ever before, the experiences of jurisdictions that have reformed their zoning to allow more and lower-cost homes hold clear lessons for improving housing affordability.
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