Does “Upzoning”—Allowing Taller, Denser Housing to Be Built—Actually Work?

By Matt Levin.

For most California housing experts, the solution to the state’s housing crisis is pretty intuitive: Build more housing. Study after study has indicated that too much demand and too little supply has led to the state’s exorbitant rents and sky-high home prices.

But what policies will actually induce more homes to be built? And once those homes are built, do things really play out in the real world as you would expect in an Econ 101 textbook?

A new and highly publicized study from a doctoral student at the Massachusetts Institute of Technology casts some doubt on whether “upzoning”—allowing taller, more dense building to built—actually results in more construction and lower housing prices. It’s been cited as a cautionary tale, but the study’s author now says proposed California legislation to allow upzoning avoids at least some of the policy pitfalls revealed in his research.

The study finds that a Chicago policy allowing more dense housing around rail stations in the early 2010s induced no new construction over a five-year period. At the same time, the city-wide upzoning resulted in higher land values—conceivably meaning pressures for higher rents, but no new supply to alleviate those pressures.

The study has already been weaponized in the debate around state Sen. Scott Wiener’s SB 50, a bill that would force cities to permit denser housing around public transportation. Loathed by advocates for local control over housing approvals, the bill is arguably the most radical proposal in a fleet of new legislation aimed at compelling cities to approve new housing.

“I don’t think the study should be used to not pursue a specific policy or another,” Yonah Freemark, the author of the MIT study, said on Gimme Shelter, the California Housing Crisis Podcast. “I think it should be used as a cautionary tale about a concern that is raised by upzoning.”

But Freemark adds that many of the issues raised by his study now appear to be addressed in Wiener’s proposal, including major protections for low-income renters and communities at risk of gentrification. Those protections were originally lacking in last year’s version of the bill.

“These (tenant protection) policies actually are going to go a long way in addressing my concerns that my study raises in Chicago,” said Freemark, while declining to take a position on the Wiener bill. “In California they’ve taken to heart the effect that upzoning is not going to have one singular effect.”

On this episode of Gimme Shelter, CALmatters’ Matt Levin and the Los Angeles Times’ Liam Dillon discuss the limitations of the MIT study with Freemark and ask what lessons it does and doesn’t hold for California. They also chat with Michael Lens, associate professor of urban planning at UCLA and an advocate for upzoning as a solution to the state’s housing woes.