The Effects of Upzoning Single Family Neighborhoods on Supply and Affordability

As the housing crisis continues to grow, zoning reform has been at the forefront of policy conversations as a potential tool to combat “exclusionary zoning” -- policies used by high-income communities to stop the development of new housing in their neighborhoods. This paper attempts to model the impacts of modestly upzoning single-family neighborhoods to allow for 2-4-unit buildings in a selection of Bay Area cities, in order to evaluate effects on housing supply and cost.

Recent studies have shown that single-family zoning has contributed to the creation of segregated neighborhoods by excluding low-income or non-white residents who cannot afford homeownership or land in areas that were already primarily white.  Because upzoning to allow for multi-family residences in such neighborhoods could improve affordability and reduce residential segregation, housing advocates have advocated for zoning reform in recent years. Cities across the country, including Philadelphia, Minneapolis and Sacramento, have moved toward some sort of upzoning for neighborhoods previously restricted to single-family homes.

This report begins with a literature review of existing work on zoning reform and single-family zoning. Then, detailed modeling examines the impact of potential zoning reform on five single-family neighborhoods across the Bay Area, a region with some of the highest housing costs in the state, and indeed in the entire U.S. Locations examined were Saratoga, Pleasanton, Milpitas, Antioch and Los Altos.

Overall, the study finds that upzoning could increase the Bay Area’s housing supply by 14% over five years, a significant improvement over recent increases in supply.  Most of the new units created would be condos rather than rental apartments. These condos would be notably more affordable than single-family homes in these regions, with single-family homes approximately 2.7 times more expensive than condos. That in turn would greatly reduce the annual family income needed to purchase a home, suggesting that zoning reform represents a promising avenue for making homeownership available to more California families.