Publication Date: May 2022
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 inner suburban 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 (negative spillovers) 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 spillovers that would necessitate a six-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
JEL Classification Codes: R14, R31, R52