Housing Policy

2021 Was a Great Year for Zoning Reform

Jurisdictions around the world are trying to address high housing costs by eliminating regulations on new housing construction.

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Zoning reform had a great year in 2021, with cities, states, and even an entire country passing laws that peel back restrictions on new housing construction. That should come as welcome news to the inhabitants of costly major metros who are once again experiencing the pain of rising rents after a brief, sharp decline in 2020.

The previous year's decline in big city rents has been chalked up to an exodus of urban workers who left behind a glut of empty apartments. As demand for city living returns, so too have ever-rising housing costs.

The hope of supply-side zoning reformers is that the laws they passed this year can replicate 2020's falling prices without the need for a demand-suppressing deadly pandemic. By legalizing more housing where people want to live, the thinking goes, we can grow supply to accommodate all that returning demand for urban living.

To that end, the California legislature passed two headline-grabbing bills that allow for more housing statewide and make it easier for local policy makers to legalize even more homes if they wish to.

The first, S.B. 9, allows duplexes on almost all residential land in the state and makes it easier for homeowners to divvy up their own land into two parcels. Those reforms allow up to four units of housing where, in many cases, only one is allowed today.

The University of California, Berkeley's Terner Center describes S.B. 9 as a "modest, incremental improvement" and projects it will lead to the creation of about 700,000 homes—most of those in Silicon Valley communities where high residential land prices, low-density zoning, and plentiful jobs make lot-splits and duplexes viable.

Much of the criticism of S.B. 9 is that it—like other, even more ambitious bills authored by state Sen. Scott Wiener (D–San Francisco)—usurps the powers of local governments which are in a better position to make housing decisions for their communities.

Perhaps to placate those critics, Wiener authored another successful bill this year, S.B. 10, that removes state-level restrictions on localities reforming their own zoning codes to allow for more housing.

Typically, when a local government rewrites its zoning code, state law requires that the government first performs environmental studies that examine the changes the zoning code will have on everything from traffic and air quality, to local animal species and cultural resources. It's a lengthy, expensive process that can be made longer still by the fact that third parties can appeal or sue if they think an environmental impact study wasn't thorough enough.

That can be enough to discourage even the most pro-housing city councils from trying to repeal their own restrictions on new housing production. S.B. 10 gives them an assist by exempting rezonings that permit up to 10-unit homes without having to go through that environmental review process.

"You can make a real argument that that kind of housing does not need the same kind of environmental scrutiny," Wiener told Reason in January. "It allows cities to do what they want to do, or need to do, quickly and not have to spend ten years doing [environmental impact reports] and getting sued."

Local governments are already looking to use these newfound powers to assist in their upzoning. San Francisco, for instance, is considering not one, not two, but three proposals to legalize fourplexes citywide—all of which could be passed more expeditiously thanks to S.B. 10.

These reforms got a lot of press, and understandably so given the high-profile, high-stakes fights over California's high housing costs and the appropriate policy solutions to them. By all accounts, it was a banner year for the state's YIMBY (yes in my backyard) movement, and its advocacy of repealing restrictions on density to ease affordability pressures.

Indeed, the Golden State wasn't the only one to embrace these YIMBY reforms. It wasn't even the first.

In June 2021, Connecticut also passed a wide-ranging suite of zoning reforms in the form of H.B 6107. The law makes a number of land use changes at state level, most of which free marketers will nod along in agreement with.

It legalizes accessory dwelling units—colloquially known as in-law suites or granny flats—statewide, and puts some limits on the kinds of regulations local governments can place on them. Similar reforms in California have produced a surprising amount of new housing.

Connecticut also put caps on how many parking spaces local governments could require for new housing. Parking minimums drive up new housing costs by requiring developers to use more land or build expensive garages that residents might not even be demanding. Requiring fewer spaces will hopefully lead to lower development costs, and thus lower rents and home prices.

Other policies included in Connecticut's zoning reform bill prevent local governments from requiring housing to be a minimum size, save for public health reasons.

America's constitutional arrangement generally precludes the federal government from getting involved in land-use regulations that are rightly left for states and local governments to hash out. And even if that weren't the case, our polarized politics would probably stop most serious, productive reforms from being adopted in Washington, D.C..

That's not the case in New Zealand where the country's two major parties, the left-wing Labor party and the conservative Nationals, came together to pass a nationwide upzoning bill earlier this month.

Similar to California's S.B. 9, New Zealand will now require most cities in the country to allow at least three-story, three-unit townhomes on residentially zoned land. The country is also requiring localities to allow six-story residential buildings on most urban land.

Better still, New Zealand's reforms also loosened other, wonkier density restrictions like setback limits, height limits, and floor-to-area ratios. When left untouched, these slightly more obscure regulations have often limited the impact of zoning reforms in places like Minneapolis by requiring newly legal duplexes and triplexes to fit inside the same "envelope" as the single-family homes that were once exclusively permitted. By addressing those bits of red tape simultaneously, New Zealand lawmakers are ensuring more of the townhomes being legalized will actually get built.

To be sure, none of these reforms are perfect.

California's reforms are positive, but they're also quite marginal compared to the scale of the housing crisis. Connecticut's zoning bill pairs its deregulatory reforms with new fair housing regulations and certification requirements for city planners.

New Zealand's libertarian(ish) party, ACT, took issue with the country's upzoning bill for leaving in place urban growth boundaries that prevent new suburban development in place. (They also seemed to have some more typically NIMBY concerns about the bill.)

But the perfect should be made the enemy of the good. This year saw jurisdictions around the world move toward a slightly more free market housing policy that will provide some relief from scandalously high urban housing costs. Here's hoping the momentum continues in 2022.

NEXT: Harry Potter Knew the Fake News Media Is the Enemy of the People

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  1. The entire country needs to be paved over with housing developments stretching for miles into the atmosphere. How else can people live?

  2. Because Democrats are evil and deserve to live in squalor! Or, better yet, deserve to be killed on the spot for daring to try to address the issue of housing inequality.

    Do you ever get tired of wishing death upon people?

    1. That was meant for GG, above.

      1. Faggot.

    2. Fuck off, SQRSLY.

      1. great comeback, do you win a lot of debates with that? I am writing it in my book of debate winning lines, thanks.

        1. How many socks does sarc have?

          HINT: The entire shtick of keeping a record of transgressions is a dead giveaway you worthless faggot.

          1. Sorry to disappoint you, it was a joke. No one keeps a book of losing debate lines or socks or slanders.

    3. This is what GG said--

      The entire country needs to be paved over with housing developments stretching for miles into the atmosphere. How else can people live?

      Please, highlight the "wishing death upon people".

      1. Once he picks a generic theme, he just keeps repeating it. He does the same shit with Sevo, and Nardz, and JesseAZ, and Mother's Lament, and anyone else that he feels like harassing. Hell, I think he even accused Ken of advocating murder.

        The guy is a shameless fucking weasel that lies openly about everything and then cries when people interact with him on hostile terms.

        1. Oh, I know sarcasmic.

          Once, before the glibbening, he was a valued member of the commentariat.

          Now?

          It's sad really. Because he still seems to think he's got it, y'know?

  3. Many of these 'reforms' are further government seizure of property rights disguised as reform.

    Population densification is being pursued and single family owner occupied property is being discouraged and, in some cases, forbidden.

    Quite a few of these 'property owners can build duplexes/multifamily dwellings come hand in hand with new restrictions on building single family homes.

    And Reason is celebrating the advent of 'you will own nothing, and be happy'.

    1. Yup. Reason is merely celebrating a new Kim Jung set of housing restrictions because they are not the old housing restrictions.

      1. So, "Meet 5he new boss, same as the old boss." Reason should have had a correspondent on the scene when my County imposed zoning.

        The County Commissioners passed it behind closed doors, unopen to the public, with protesters outside and police snipers on the rooftop. This was in late 1990, just a year after the fall of Communism in Eastern Europe, yet here it was happening in the U.S.A.

  4. "Connecticut also put caps on how many parking spaces local governments could require for new housing. Parking minimums drive up new housing costs by requiring developers to use more land or build expensive garages that residents might not even be demanding."

    Exactly where are all the surplus parking spaces that residents "might not even be demanding" in Connecticut? The usual result seems to be that "transit oriented developments" get built, but the new "transit oriented" residents mysteriously still want the convenience of owning private vehicles, so they end up increasing congestion by competing for street parking in adjacent neighborhoods.

    At least in my part of Connecticut, the common model seems to be politicians enriching themselves by getting in bed with large developers, saying that eminent domain isn't part of the plan while vaguely threatening that it remains an option, and replacing blue-collar and middle income neighborhoods with "luxury" apartments shoehorned into Soviet-style apartment blocks without enough parking for the residents. Of course, a certain percentage of the "luxury" apartments get set aside for subsidized, low income, rent-control-by-another-name units which have never been known to encourage fraudulent schemes. No worries, though, because the out-of-state developers get their subsidies, the politicians magically get wealthier, and home ownership takes a hit.

    Whatever it is, the result ain't libertarian.

    1. The Tomasso Group disapproves of your message.

    2. Whatever it is, the result ain't libertarian.
      Unless you think libertarian is synonymous with Soviet, which is what the LieCheatSteal party has wanted for America since they saw it in action during the Cold War.

  5. If you are libertarian and can manage it, get out of the city and skip the suburbs.

    1. "Managing" is the sticky wicket for many.

      I have "Backwoods Home" fantasies of "life beyond the sidewalks," but with high urban taxes, high utilities, and high housing costs, it's hard for City Mice to acquire the means for rural land to become Country Mice.

      The most I could ever manage was a "country-come-to-town" lifestyle, by backyard gardening, canning, dehydrating meats and fruit, wine-making, making yogurt, cheese, butter, buttermilk, and yeast culture for home-baked bread. No livestock except earthworms in a homemade composter.

      Even if I did aquire My Own Private Idaho, I would still want access to cultural amenities such as continuing education, literature, music, entertainment, and fine arts. While satellite Internet makes that possible, what are the costs vs. co-axial cable?

      And would people in the community be friendly to freaky-deaky, wild-and-wooly freedom-lovers or just view us as invaders much like Free Staters have too often come off as being?

      Much to be managed here. I hope you do it well and feel free to pass along any insights on the subject.

  6. I realize that this is not the libertarian solution, but it is a good example of how central planning does not work:

    All of these reforms are focused on trying to increase supply, but why do I never hear about trying to suppress demand? Discourage jobs, and people will stop moving into the cities, current residents will find more opportunities outside the city and you won't need as much housing. Every 'economic development' department in a city with a housing shortage ought to be closed or tasked with helping disfavored employers move out of the city. And why aren't they rezoning commercial and industrial into residential in order to drive up rents of employers? Yes, employers will pack employees into smaller spaces, but employers will reach a point where they start trying to grow satellite offices in cheaper locales.

    The whole housing situation appears to be a perfect example of how politicians can't run a lemonade stand. Commercial/industrial don't complain about densification, so it is allowed. Residential does complain, so it isn't allowed. So, the zoning mix gets screwed up and you have offices for workers but nowhere for them to sleep.

    And the "solution" is just going to cause further problems. You can't just quadruple the number of households in an area, without scaling the infrastructure, roadway, etc. as well. As much as I hate impact reports, if you aren't going to allow the markets to function, and you don't plan, you ARE going to run into problems. Which people will try to solve with more government and short-sighted lurches in policy.

  7. That these "reforms" are Free Market is result-oriented trash.
    Fourty years ago I exercised MY FREE CHOICE by choosing among the hundreds of neighborhoods available in the Minnespolis-St. Paul metro. I could do so because there was a variety of products on the market.
    FIRST, I freely choose to avoid both core cities because both were liberal bastions whose Councilmen would want to force things like a garbage monopoly, rent controls, and mandated neighborhood degradement (such is now lauded by REASON).
    SECOND, I freely choose a suburb (nasty concept to urban planners) that was 80% developed with zoning for (1) a regional shopping center, (2) many, many single-family residential neighborhoods (still nice because the homeowners care), AND, . . . (3) LOTS of apartments and duplex planned unit developments.
    THIRD, I freely choose a suburb where the city council works very hard to PROTECT both MY choice and MY investment. AND the long-standing free choices of my neighbors (White, Black, Muslim, etc.) as well. Diversity by choice is always better than by force of government (which, surprisingly, REASON seems to now favor).
    FOURTH, destroying the product I bought is still destruction no matter how much lipstick REASON slathers on the pig of neighborhood degradement.

  8. Unmentioned is that higher density, and thus cheaper, housing brings with it crime.
    These "urban planner" types never want to admit what is proven everywhere they infect the types of neighborhoods that the people actually want and ask their local representatives to provide.
    Living in the suburbs is like a divorce - it's so expensive because its worth it.
    Leftists hate us having the choice.

    1. So it's money pit houses and low crime vs. affordable housing and high crime? Huh???

      Couldn't we have affordable housing combined with a well-armed citizenry and police who actually burn donut calories to fight real crimes with real victims, competing utilities, and City Councils and Mayors who support this whole arrangement?

      And couldn't those who want more luxurious housing also have the option of gated communities and their own arrangements for protection and services?

      And instead of pricey suburbs and divorces, can't their be the option of affordable suburbs and happy couples and happy singles? Why must everything be unnecessarily binary?

    2. By the bye, chi-chi, fru-fru, toney suburban neighborhooes can be ruined by crime and the Drug War just as easily as high-density urban areas. All it takes is one meth lab and the house harboring it becomes a Hazmat zone and the whole neighborhood becomes unmarketable.

  9. Raleigh NC has erased single family zoning for modestly priced older neighborhoods. These affordable homes can now be torn down and each replaced with 4 expensive 3 story dwellings. It makes affordable housing worse but enriches the campaign coffers with developer contributions. Rich neighborhoods with HOAs are exempt.

  10. The country is also requiring localities to allow six-story residential buildings on most urban land. friday night funkin mod game

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