Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Reason
Reason
Christian Britschgi

St. Paul Passes Politically Practical, Economically Unproductive Zoning Reforms

Minneapolis' first-in-the-nation elimination of single-family-only zoning produced only a modest amount of newly legal duplexes and triplexes. Similar reforms in its twin city will likely have similarly anemic results.

On Wednesday, the City Council of St. Paul, Minnesota, approved a zoning code update that will allow four- and five-unit developments in areas once zoned exclusively for single-family homes. Builders can receive a density bonus to add up to six units, provided some of the new housing is offered at below-market rates to low-income buyers or renters.

Supporters pitch this legalization of "middle housing" as a means of allowing more types, and more affordable types, of housing in the cities' neighborhoods.

"With these changes, we are investing in the housing supply and expanding affordable housing and wealth-building opportunities for all of our residents," said St. Paul Mayor Melvin Carter in a statement to Minneapolis' Star Tribune.

At the same time, the city has appeared keen to downplay the idea that these reforms would lead to dramatic change to anyone's streetscape.

"Actual housing construction…will proceed slowly," reads a city staff memo on the middle housing reforms the city just passed.

St. Paul's reforms are quite similar to Minneapolis' zoning changes, reads the staff memo, which produced 74 duplexes and 28 triplexes from 2020 to 2022 (the first two years the reforms have been in effect).

A significant headwind on the productivity of Minneapolis' reforms was that while they allowed more units in single-family areas, they generally didn't allow more floor space. A builder could theoretically add three units on a single-family lot, but that new triplex couldn't be any larger than a single-family home.

The limited number of vacant single-family lots meant that triplex builders would have to incur the costs of a tear-down (or a substantial renovation) in order to build a structure of the same size. That can kill the economic viability of new duplexes and triplexes.

"In many cases, it does not make financial sense to tear down an existing home to construct higher-density housing, especially if it would only increase the number of housing units on the lot by one or two units," notes the St. Paul staff memo.

The fact that single-family homes are typically easier to finance and sell and cheaper to build on a square-foot basis also disincentives the construction of duplexes and triplexes.

St. Paul's reforms do provide some increases in residential floor area. Under the new zoning code, homes can be built taller and closer to the street and sit on smaller lots. It will also be easier to divide lots up into smaller properties under the new code.

These additional density allowances will likely make two-, three-, and four-unit homes more feasible. Few for-profit developers will likely be interested in the six-unit developments the new code allows, given the affordability requirements that come with the additional units.

The ability to divide up lots and build on smaller lots will also make it easier to build smaller single-family townhomes.

St. Paul's reforms also cap the size of new single-family homes at 2,500 square feet in some areas of the city. That's hardly respectful of property rights or market forces but is an effective way of manipulating builders to shift their business to building smaller, missing middle homes. Portland and Seattle have adopted similar "McMansion" bans to boost missing middle housing production.

Taken together, St. Paul's reforms are another example of the moderate approach cities and states have taken toward missing middle housing reform. More and more jurisdictions are legalizing multiunit structures in single-family neighborhoods while still keeping pretty tight limits on their density.

Supporters of such reforms can accurately tell their critics that their zoning code updates will not bring dramatic changes to existing single-family neighborhoods. That makes the passage of reform more politically feasible. But it also means they are less economically feasible. Newly legalized missing middle housing will largely stay missing.

Much deeper deregulatory reform is necessary to see meaningful increases in housing production and truly address the nation's housing pickle.

The post St. Paul Passes Politically Practical, Economically Unproductive Zoning Reforms appeared first on Reason.com.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.