Publication Type

Journal Article

Version

submittedVersion

Publication Date

7-2023

Abstract

There is a growing debate about whether upzoning is an effective policy response to housing shortages and unaffordable housing. This paper provides empirical evidence to further inform debate by examining the various impacts of recently implemented zoning reforms on housing construction in Auckland, the largest metropolitan area in New Zealand. In 2016, the city upzoned approximately three quarters of its residential land to facilitate construction of more intensive housing. We use a quasi-experimental approach to analyze the short-run impacts of the reform on construction, allowing for potential shifts in construction from non-upzoned to upzoned areas (displacement effects) that would, if unaccounted for, lead to an overestimation of treatment effects. We find strong evidence that upzoning stimulated construction. Treatment effects remain statistically significant even under implausibly large displacement effects that would necessitate more than a four-fold increase in the trend rate of construction in control areas under the counterfactual of no-upzoning. Our findings support the argument that upzoning can stimulate housing supply and suggest that further work to identify factors that mediate the efficacy of upzoning in achieving wider objectives of the policy would assist policymakers in the design of zoning reforms in the future.

Keywords

Upzoning, Land use regulations, Redevelopment, Housing construction, Housing affordability, Spillovers

Discipline

Behavioral Economics | Econometrics | Real Estate

Research Areas

Econometrics

Publication

Journal of Urban Economics

Volume

136

First Page

1

Last Page

27

ISSN

0094-1190

Identifier

10.1016/j.jue.2023.103555

Publisher

Elsevier

Copyright Owner and License

Authors-CC-BY

Additional URL

https://doi.org/10.1016/j.jue.2023.103555

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