"The Case for Upzoning"

Last month, the city council of Berkeley, California approved a resolution that called for the end of exclusionary zoning by 2022. It might not be surprising that a progressive enclave like Berkeley passed such a measure but communities of all political leanings are starting to reconsider both the intended and unintended consequences of restrictive zoning laws. That begins with the acknowledgment that many of those laws have been used to discriminate in housing far beyond the Fair Housing Act of 1968, while also advancing the perception that thriving suburbs consist of for sale, single family homes surrounded by manicured lawns and picket fences. Thankfully, municipalities are challenging those narratives by using upzoning to combat housing shortages and affordability concerns, which in turn will help make suburbs more accessible and inclusive.

Upzoning refers to the process of increasing the zoning density in a community and it typically applies to the transition of single residential lots into multifamily units such as duplexes or triplexes. Its application is meant to grant cities latitude in providing different housing options to its residents, regardless of their race, religion, gender, or national origin. At its best, upzoning can help middle class families who can't afford a down payment on a single-family home to achieve greater upward mobility by renting or owning an apartment in a district with good schools.

However, opponents of upzoning characterize it as something more sinister; a practice that threatens the foundation of America's suburbs. As recently as last year, our own Department of Housing and Urban Development warned that a rule meant to increase enforcement of the 1968 Fair Housing Act would "abolish single-family zoning" and lead to an influx of "low-income housing units next to your suburban house." Such fear mongering has historically been ripe with racial undertones, yet politicians have been able to avoid charges of bias by blaming upzoning for the sort of out of control growth that nearly all voters oppose.

Most everyone agrees that it's wrong to demonize zoning to score political points. But even those who publicly denounce such language have been resistant to change when it comes to their own suburbs. If we reason that all homeowners have a vested interest in preserving local home values, and that the majority of suburban politicians own homes, are we surprised that they continue to enact measures that discourage renters or those with different socioeconomic profiles from moving to their towns? Municipalities across the country are no longer leaving those decisions in the hands of private citizens as they set out to reshape what the suburban experience will look like for decades to come.

Near one of our own single-family rental (SFR) communities just west of Minneapolis, the affluent town of Wayzata recently approved plans to revamp a commercial district with a mixed-use development of retail, condominiums, and senior housing. That project, along with both of our SFR developments in Minnesota, were made possible by concerted efforts on behalf of Minneapolis and its surrounding suburbs to approve density that was previously non negotiable. Minneapolis 2040, as it's known, is the most ambitious upzoning guide in the country and it had to be since 75% of the city's residents live in areas zoned for single-family homes.

Zoning restrictions present hurdles for our built-for-rent SFR developments in the same way that they limit developers of more traditional duplexes and triplexes. Without some allowances on density, sponsors inevitably have more difficulty putting deals together. When fewer new deals are initiated, residents are limited to existing inventory and that's usually heavy on single-family homes. Suburbs have always been resistant to multi-family and to renters in general, whether that's based on fears of declining home values, increases in traffic, or more diversity. Ultimately, city councils never have to explain their rationale behind the obstruction of a project when they can simply enforce their existing zoning laws.

Amending those regulations to help reduce housing costs and to address the prejudicial origins of single-family zoning is paramount. Our SFR product isn't necessarily marketed on it's affordability but it is intended to make the suburban version of the 'American Dream' more available to people of all backgrounds. We know that it's going to take years of data to prove that renters don't inherently destroy the fabric of suburbs and that responsible, inclusive growth benefits everyone. In the meantime, upzoning can assist in chipping away at the cultural barriers that exist between cities and suburbs to ensure that America's suburbs become more representative of our country's population.