The idea sounds seductively simple: increase the allowable density in current residential zoning districts, and in so doing create development options for property owners and developers to build the residential “missing middle” between single and multi-family housing through ADUs, duplexes, and more. A rapidly expanding number of fast-growing cities around the country have heard the siren call of “upzoning” and embraced it as the simplest and best tool in the Planning & Zoning toolbox to tame runaway housing costs.
But does it actually work?
Ask affordable housing proponents and they will tell you it’s a no-brainer. But NIMBYs respond that it’s certain death for the traditional neighborhood.
It’s too early in the game to tell if this novel policy approach will prove either side right or wrong. but early indicators suggest everyone should remember that old truism – things rarely turn out as good as we hope or as bad as we fear.
Results from upzoning pioneers like Minneapolis don’t exactly provide an open-and-shut case for it moving the needle on housing affordability. In fact, there’s usually a more definitive link between increases in the supply of housing and other code changes, like reduced parking allocation requirements. And there’s even evidence that upzoning might actually increase housing costs through speculation and gentrification.
Nonetheless, communities like Minneapolis that actively push for more housing construction have at least been able to control rent growth:
But what about upzoning putting the proverbial nail in the coffin of the beloved traditional neighborhood? Well, let’s look at the results so far here in Charlotte.
Charlotte City Council approved upzoning changes to its Unified Development Ordinance (UDO) in 2021, and the new rules put in place allow construction of duplexes and triplexes throughout the city’s single-family zoning districts. That’s about 70% of our total land area.
Thanks to the excellent reporting by our friends at the Charlotte Ledger, we’ve had a ring-side seat for the fights these changes were sure to unleash. Sure enough, the prospect of duplexes and triplexes popping up all over Landsdowne or Eastover quickly had residents up in arms and preparing for war. However, only a dozen or so such projects are even in the permitting stages, and city leaders are already capitulating and suggesting limiting triplexes to corner lots in most neighborhoods.
As a result, it’s hard to see how these small, incremental in-fill projects will make a dent in the housing supply any time soon, much less lay waste to whole neighborhoods. But it does beg the question:
How can upzoning make a dent in the housing supply if NIMBYs stop or defang it before it even has a chance?
There are two important points here: First, there’s no reason to believe NIMBYs can win this battle outright. A few neighborhoods may well succeed in securing some carve-outs, but city leaders are not anxious to abandon changes deemed vital to curbing escalating housing expenses. With housing demand soaring and supply failing to catch up, the writing is on the wall.
The second point and more important point is that not all upzoning is created equally. A crucial aspect of Charlotte’s situation reveals how upzoning might make a real difference: its huge stockpile of undeveloped residential land.
Charlotte has almost 12,000 acres of undeveloped residential land available for upzoning. Austin, in comparison, has only 2,500 acres, while Minneapolis, the upzoning pioneer, has none. That gap will make a big difference in how upzoning plays out here.
We talk to developers, civil engineers, and planning professionals every day, and they confirm that the real upzoning impacts in Charlotte are happening just outside the city limits where a lot of that undeveloped acreage lies – but still subject to the Charlotte UDO.
It’s the Wild West out there in places like Steele Creek. Clusters of new triplexes that rely on the city’s water and sewage systems are in various stages of development, but there’s concern that HOA fees may not be sufficient to cover the long-term maintenance costs of supporting this rapidly accumulating private infrastructure. Developers say they’ve got matters in hand, and buyer-brokers say they will make sure their clients read the fine print. But upzoning means that no rezoning or public notice/hearing is required, leaving neighbors in the dark and creating a lot of chatter and nail-biting.
With all these messy, unintended consequences and no clear link to affordability, is upzoning even worth it? Cardinal says, “Absolutely!”
Why? The indisputable fact is demand for housing has never been higher, and the relative supply of available land has never been lower. If we’re going to tackle the “intractable” problem of ever-rising housing costs, it’s probably going to take something as bold and innovative as upzoning to get some new proposals on the table and see some nail guns on home sites. And that is definitely what we need to see.
The biggest reason we’re all-in for upzoning:
Upzoning presents us with new but much smaller and very solvable problems. That’s why we say, “Upzoning might not work as planned. Let’s do it anyway.” Because we can solve these smaller problems and get people the housing they need. Older neighborhoods can surely find ways to peacefully absorb new duplexes and triplexes just as Myers Park did before those single-family zoning laws ever existed. New construction outside the city limits can be designed with maintenance and infrastructure needs in mind.
Only when we start building substantially more housing will we start seeing relief from those runaway housing costs, and upzoning offers a way forward to do just that. And who knows? Maybe in Charlotte the siren song of upzoning will start to sound like the National Anthem.
Here at Cardinal, we specialize in finding “solvable problem” pathways through impasses and complexity. As regular readers probably suspect, we’ve got a tool for working them out, especially in situations like upzoning. It’s called The Negotiation WorksheetTM, and whether you’re an investor seeking to secure a foothold in the new frontier created by upzoning or an affordable housing developer trying to gain an advantage against deeper pockets, The Negotiation WorksheetTM will reveal leverage and elucidate tactical advantages that are easily overlooked in most deal negotiations. Don’t leave money on the table or come up short when pursuing upzoning opportunities.
The race is on, so give us a call. Let’s get to work.
