Eliminating single-family zoning isn’t the reason Minneapolis is a YIMBY success story

Minneapolis appears to be a YIMBY (Yes in my backyard) success story of relaxed zoning regulations leading to increased housing production and lower rents. Its much-vaunted abolition of single-family zoning, however, has little to do with that success.

On Tuesday, a tweet (now deleted) went viral juxtaposing a Slate article on the abolition of Minneapolis single family zoning with a blog post detailing rising housing production and falling rents in the city. The legend “how it started, how it goes” implies that the first is responsible for the second.

A closer look at the numbers suggests that’s not true. Housing production is on the rise and rents do indeed appear to be falling. But the effects of Minneapolis’ particular means of eliminating single-family zoning and allowing up to triplexes on residential lots throughout the city have been extremely modest.

Newly legal triplexes and duplexes represent only a tiny fraction of new homes under construction. Other reforms that make less headlines seem to be doing the Lord’s work in boosting housing production.

This offers important lessons for cities trying to make affordable places to live. The more radically deregulatory your reforms are and the more types of reforms you adopt, the more successful they will be.

First, a little background.

In December 2018, the Minneapolis City Council approved the Minneapolis 2040 Comprehensive Plan. The plan included a host of reforms and policy goals on everything from jobs to stormwater management. The most eye-catching policy was one that legalized two- and three-unit homes on formerly single-family zoned lots throughout the city.

Zoning laws – which regulate how much new housing can be built – are increasingly criticized for artificially restricting housing supply, leading to more people vying for fewer homes, driving up housing prices and rents. Single-family zoning, in particular, has been the subject of much criticism for imposing the strictest limits on density.

Minneapolis, being the first city to eliminate single-family zoning, naturally got a lot of attention and positive media coverage (including from me).

The city’s single-family zoning reform was implemented in January 2020. But the result hasn’t been an explosion of new development.

Instead, from January 2020 to March 2022, Minneapolis approved 62 duplexes and 17 triplexes, according to data collected by the city’s Department of Community Planning and Economic Development (CPED). Exactly half of the duplexes and 14 of the triplexes were built on land formerly zoned for exclusively single-family development.

CPED planner Jason Wittenberg says the number of duplexes and triplexes represents an increase from previous years. They also come at a time when single-family home development is down.

All new housing is good housing. But these two- and three-unit developments still represent only a tiny fraction of the approximately 9,000 units authorized by the city during the same period.

One of the reasons the city hasn’t seen more triplexes and duplexes springing up is that it left in place, or only slightly modified, additional regulations that limit the size of these buildings, says Emily Hamilton, researcher in housing policy at the Mercatus of George Mason University. Center.

“Most cities have many components in their single-family zoning. Limiting development to one house per lot is the primary restriction,” Hamilton says. “There are also restrictions on the size of that lot, the size of that structure, the amount of parking needed, and the distance between a structure and its lot line.”

The Minneapolis reforms allow modest building size increases for duplexes and triplexes in certain zoning districts or under certain conditions. But generally, they still require these developments to fit within the same “envelope” as the single-family homes they would replace.

“It’s not enough to create the flexible conditions necessary to make it worthwhile to demolish a house that already exists and build something else,” says Hamilton. She recommends much more generous allowances for floor space than new developments can have.

Still, the numbers don’t lie, and Minneapolis is actually seeing an increase in new housing development. According to CPED figures, the city issued nearly 4,000 building permits per year for new housing from 2018 to 2021. That’s up from the 2,600 units the city approved on average each year from 2013. to 2017.

The city has already licensed some 2,500 units in 2022 so far, reports the Minneapolis Star Tribune, putting it on track to top last year’s numbers. And this increased supply has the predictable and desirable effect of lowering rental prices.

Janne Flisrand, writing on a local planner’s blog MN streets, analyzed rental price data to find that median nominal rents for one- and two-bedroom apartments are renting cheaper today than in 2018. Median prices for three-bedroom units increased by 2% . This is despite record inflation and a national trend towards rising rents.

What is responsible for the increase in housing production then?

Wittenberg credits the city’s elimination of parking minimums—which typically required one parking space per dwelling—with facilitating the increased construction of smaller apartment buildings.

The city has reduced residential parking minimums since 2009. The Minneapolis 2040 plan eliminated them entirely. (The city has also adopted some rather non-free parking policies, including parking maximums in certain areas and bicycle parking minimums.)

Data collected by Wittenberg and shared with Reason, shows that 19 major projects have been approved by the Minneapolis Planning Commission since parking minimums were eliminated. The median project provided 0.42 residential parking spaces per unit, with smaller apartment buildings typically having even fewer parking spaces.

“For reasons of site constraints and economic reasons, it would have been difficult to park these buildings at one parking space per unit, he says. “We see pretty clearly that it makes a significant difference.”

In January 2021, Minneapolis also implemented additional parts of the comprehensive Minneapolis 2040 plan that allows for taller, denser apartment buildings in more of the city, especially along and near commercial corridors. public transport stops. It also helped facilitate more development, Wittenberg says.

Flisrand, on Twitterargues that the fight to eliminate single-family zoning has captured most of the attention in the Minneapolis 2040 debate, paving the way for more impactful policies such as eliminating parking minimums and zoning commercial corridors .

However, this political dynamic may not be replicated everywhere. In California, for example, the state succeeded in eliminating single-family zoning — legalizing duplexes and secondary suites everywhere — but failed to advance more ambitious bills to increase the area near transit stops. and job centers.

There are reasons one would want triplex legalization to work beyond its power as a political prop, too.

The construction costs per square foot of a missing duplex or triplex are lower than a larger apartment, making it desirable for affordability reasons, Hamilton says. She also says these types of units would expand consumer choice for people who are done with apartment living but cannot afford a single-family home in a given area.

Nor do we want to learn the wrong lesson that eliminating single-family zoning is the only offer growing reform cities must embrace.

There is a certain school of thought on the political left—represented primarily by Rep. Alexandria Ocasio-Cortez (D–NY)—that supports the elimination of single-family zoning in affluent neighborhoods while expressing extreme skepticism about it. denser private development at the market rate. elsewhere in the city

But legalizing the latter type of development, at least in Minneapolis’ experience, seems to go much further in producing more housing units and keeping rents low.

More and more jurisdictions across the country are realizing that their zoning laws are strangling housing production and driving up housing costs, and are poised to make changes.

Legislatures in Oregon, California, and Maine have all passed laws eliminating single-family zoning. Other cities and states are looking to follow suit.

The lesson from Minneapolis, at least, seems to be that modest reforms will yield modest results. Reducing regulation with Randian abandon will do a better job of legalizing housing in a way that leads to real housing production and lower prices.