Policymakers looking to bring down housing costs across the country may want to follow the example of Minneapolis, which just passed one of the most sweeping housing reforms in the nation.
On Friday, the Minneapolis City Council approved its comprehensive plan, Minneapolis 2040, which lays policies for managing the city's growth over the next 20 years. The most promising, and most controversial, provisions of the 1,100-page plan are changes to the city's zoning code that will let triplexes be built where once only single-family homes were permitted and will allow larger apartment buildings to be constructed along transit corridors.
Free marketers should celebrate the vote. Government limits on the buildings' height and density are both a major restriction on property rights and a big driver of housing costs in America's growing urban areas.
Minneapolis Mayor Jacob Frey made the latter point following the city council's 12–1 vote approving the plan. "When you have demand that is sky-high, and you don't have the supply to keep up with it, prices rise. Rents rise. That's what we're seeing," Frey told CityLab.
That Frey—a solid progressive who has spent his time in government helping to pass paid sick leave and a $15 minimum wage—has embraced the logic of supply and demand on housing demonstrates the growing transpartisan consensus that government regulation is killing off affordable housing in America's cities.
Illya Somin recently made that point over at The Volokh Conspiracy, pointing out that the coalition to hack away at local zoning laws includes not just free market Rothbardians but center-left commenters like Paul Krugman, Vox's Matt Yglesias, and Obama economic advisor Jason Furman. Left-leaning website Slate has given Minneapolis' citywide upzoning a glowing review.
There is still plenty in the plan that libertarians are not going to like. Those new triplexes must still conform to existing limitations on the height and massing of single-family homes, for instance. And allowing multifamily apartment buildings only on transit corridors is itself an attempt to encourage a particular lifestyle, even if the policy change is deregulatory on the margins.
And while it upzones, Minneapolis politicians have simultaneously advanced other housing policies that are hardly pro-market, including an inclusionary zoning ordinance—which requires that new apartment developments come with rent-controlled units—and some $40 million in government funding for low-income housing.
Property rights were also largely absent from the talking points of upzoning proponents.
Folks like Frey and Minneapolis City Councilmember Lisa Bender—a major champion of the comprehensive plan—focused their comments on structural racism and climate change. Pro-housing activists such as the Minneapolis group Neighbors For More Neighbors invoked colonial and patriarchal land use patterns as well as the need to foster more small businesses.
While all this in some sense shows the limits of how much can be expected from left-leaning land use reformers, it is nonetheless encouraging to see progressive hearts and minds won over to some libertarian policy proposals, if not necessarily to libertarian politics.
Indeed it raises hopes that current efforts to deregulate housing construction in solidly blue places like California—where past upzoning efforts have come to naught—might succeed with the right message.