Can Upzoning be Equitable? YIMBYs, NIMBYs, and the Battle For the City
The movement known as YIMBYism (short for Yes in My Backyard) positions itself in opposition to the interests of wealthy, mostly white homeowners who, it is argued, make use of regulations such as zoning and environmental review to block new housing in their neighborhoods, and thereby preserve their housing investments. By eliminating single family zoning, height limits, and other barriers, the story goes, more housing options will become available in exclusionary communities and residential segregation will be lessened. Without a doubt, this argument has a grain of truth - perhaps even a mound. And indeed, many in the “pro-housing” space have led valiant efforts to sue wealthy suburban enclaves, advocate for affordable housing developments, and undo overly restrictive housing laws.
Los Altos, California - a wealthy Silicon Valley enclave
So what’s the problem then?
What this story leaves out is the fact that not all neighborhoods of low density housing are white and rich. The rhetoric of undoing the legacy of redlining is the justice-oriented face of the YIMBY movement. The reality, far more complex and ugly, is of course that upzoning and real estate development has very different impacts on low-income communities and communities of color. The arguments deployed in this context are cold-blooded and economistic. This is where you see charts of supply and demand dredged up (remember high school economics?) And there are indeed studies that purport to show that new housing, of any kind (including the most high end luxury development), leads to a lowering of rents in an area due to increased supply. Perhaps more darkly, it is suggested that gentrification is an inevitable process, and the construction of new luxury housing serves to mercifully spare residents of existing units from bidding competition and displacement. Is this true? While the jury is still out on the effect market rate development has on market rate rents in the nearby community, and to be fair there is solid evidence it lowers the average market rate rent, there is so much more at stake than reducing market rate rent.
YIMBY responses to the displacement and housing instability caused by incentivizing market rate development low income areas often treat gentrification as a fait accompli, so therefore that development can only be positive because it will at least reduce rent somewhat for the more well-off. It’s debatable - but note how far we are from the original argument that upzoning is a tool to break down barriers to wealthy white enclaves. The underlying principle here is a belief in the power of the market, the famous “invisible hand”. Moreover, the notion that humans can proactively, democratically shape the market for positive ends is treated with skepticism.
What is the actual effect of upzoning? The evidence is somewhat mixed, but points to possibly counterintuitive impacts. A 2019 study by Yonah Freemark of neighborhood level upzoning in Chicago found that “the short-term, local-level impacts of upzoning are higher property prices but no additional new housing construction.” Upzoning, by allowing more potential for unit construction, raises the value of a given piece of land. However, developers may choose to wait to develop until their returns can be maximized. In the short term, upzoning can thus have a mostly harmful impact on current residents by raising prices of existing housing while failing to add supply.
Assuming that new housing is actually built, can new market rate construction actually lead to higher rents? A lot of energy has been put into debunking this idea. If you’ve been in online arguments about this, you’ve probably been linked the “Research Roundup: The Effect of Market-Rate Development on Neighborhood Rents” from UCLA. This generally claims to show that rents are reduced by new market-rate development.
The claim is often made that in a gentrifying area, wealthier new residents will move in regardless of if there is new construction. The new market rate construction is assumed to “absorb” the demand for housing that would otherwise put pressure on the existing older housing stock. It’s evident that the process can happen in this way. For example, many neighborhoods in San Francisco have experienced rising rents and demographic change with a distinct lack of new construction. However, it’s easy to understand how profit-maximizing development can potentially accelerate gentrification. New, wealthy residents incentivize different local businesses, and those business landlords to charge higher rents. It also incentivizes nearby landlords with rent controlled tenants to replace them with higher earners, and the police respond more to the concerns of the new residents, which typically are related to the existence of the current neighbors.
Putting aside the directional impact of new construction on nearby rents, does it do nearly enough to stem displacement? In New York City, a series of rezonings took place under the Bloomberg administration. The low income neighborhoods of Williamsburg, Greenpoint, and Park Slope were rezoned to allow more housing capacity. Following these rezonings, displacement trends accelerated, resulting in a decrease of Latinx and Black populations while overall population continued to grow. While the number of housing units did increase, this was accompanied by a loss of rent-stabilized units. Whatever effect adding new supply had was clearly swamped by the tide of gentrification and racialized displacement.
(From “Zoning and Racialized Displacement in NYC” by Churches United for Fair Housing)
What could have been done differently? How do we harness the positive effects of encouraging for-profit development without downplaying or outright ignoring the impacts it has on existing, vulnerable residents? First and foremost, development should be directed as much as possible to truly affluent and exclusionary communities. Belatedly, NYC has turned its rezonings to the kind of wealthy communities suggested by the “social justice” YIMBY framework - SoHo and Gowanus, both whiter and wealthier than average. In addition to channeling upzoning into these exclusionary communities, the solution must include enormous investment in affordable housing, rent control, and tenant protections particularly in communities vulnerable to displacement. This must be a starting point, not an afterthought. If these folks are protected from the displacement upzoning causes, there will no longer be an issue from social justice advocates. This is the real battle - and I welcome housing advocates of any stripe to join in this struggle.
The DC Council had the DC planning office write a report on repealing single-family zoning with an emphasis on racial equity recently so it was also looking at this question.
The report noted the environmental and affordability benefits of allowing more multi-family housing and the history of racism in zoning. Their ultimate recommendation was that single-family zoning should be repealed (to allow 'gentle density') in what they politely called the "high-cost, high-opportunity" parts of town - ie exclusionary rich white neighborhoods - arguing that would make those places more inclusionary and having a greater mix of moderate-income housing than they have now. So they did not recommend the repeal of single-family zoning in other communities, which made sense to me as those are not the communities that have historically been excluding others through high prices, zoning, or other mechanisms.
Report here: https://plandc.dc.gov/sites/default/files/dc/sites/Comprehensiveplan/007_Single%20Family%20Housing%20Report.pdf
Thought you might be interested in DC's look at equitable upzoning. Of course, it would require a lot of political courage to stand up to the wealthiest neighborhoods in DC and make them less exclusionary - so this likely will just be a report gathering dust than a roadmap for any real action.
https://youtu.be/WB46fJW-rk0