Why California, and the nation, shouldn’t be afraid of density and upzoning

California has been one of the main battlegrounds in the national fight for more affordable homes. In just the last year, a number of proposals, including different variations of upzoning, have either been put forward or passed by the state legislature to create more affordable options and increase production of new units in a state hungry for more housing options.

Housing researcher Issi Romem, a former Zillow economist who just founded his own firm, Metrosight, says that while significant action is needed to address runaway housing costs, it doesn’t necessarily need to result in major changes at the neighborhood level.

“Allowing for even modest amounts of new density in the nation’s overwhelmingly single-family- dominant locales could lead to millions of new housing units nationwide,” Romem writes, “helping alleviate a housing affordability crisis that has been decades in the making.”

Romem examined the impact of changing zoning regulations in major U.S. metro areas would have on “status-quo assumptions” of how many new homes would be built over the next two decades, from allowing just 10 percent of single-family parcels to house duplexes, to more extensive changes, like allowing for four units per parcel.

He found that even modest densification efforts could have significant impact nationwide—across the 17 metro areas analyzed, allowing 10 percent of single-family lots to house two units instead of one could yield almost 3.3 million additional housing units—and especially in California.

In Los Angeles, Romem found that if 20 percent of single-family lots were re-zoned to hold just two homes instead of one, the local housing stock would be boosted by 775,000 more homes beyond what’s already expected to be built by 2040.

Going further and allowing four homes instead of two would increase the housing stock by 2.3 million—a 54 percent boost over current growth estimates.

In San Francisco, if just 10 percent of lots that are currently zoned for single-family homes were redeveloped or allowed to accommodate two homes, the area’s housing stock could grow by 18.4 percent in the next 20 years, adding an extra 200,000 homes beyond what’s expected based on current predictions.

Although upzoning laws were passed in Minneapolis and the state of Oregon last year, similar laws for California still seem politically ludicrous in light of the fierce battles over zoning, new construction, and state versus local control. But Romem’s research found that small-scale, incremental change would not only ease the pressure of the state’s crippling housing crisis—it would do so without making drastic changes to the neighborhood fabric.

Small changes can add housing without changing California neighborhoods

According to Romem, upzoning to just two or three units per lot wouldn’t result in “Manhattanized neighborhoods,” as many opponents of growth and zoning have dubbed the sudden shift of single-family homes to a dense block of high-rises.

Notably, he believes, it wouldn't have as dramatic an impact on neighborhood character as opponents often argue. On a typical block, such an increase in density would result in a few accessory-dwelling units added to backyards, the occasional two- or three-flat, or a handful of converted garage apartments.

Modest upzoning would also deliver positive environmental benefits: increased density would alleviate some of the pressure to build in far-away exurbs and keep employees closer to their jobs, and improve the case for expanding public transportation.

Romem also thinks this lower-density proposal for changing housing laws would provide a richer spectrum of housing types. It’s the “missing middle” proposal, a reference to types of smaller multi-unit housing structures that traditionally provided more affordable housing, but tend to not be built today due to land costs and other economic pressures.

“Most new housing development has been confined to islands of density—often near transit or in formerly non-residential areas—in an otherwise stagnant sea of no-growth,” he wrote in his analysis. “Looking inward at already-developed single-family tracts and allowing for two, three or even four homes where just one stands today could reignite housing development without contributing to sprawl.”

He also believes modest densification can be tailored to meet the goals of reducing housing price appreciation.

“If you upzone everything to 4 units and had it built out, you would see such large additions to the housing stock, it would make housing less valuable by a substantial amount,” he says.

Why “modest upzoning” may work better than other proposals on the table

Any change to housing regulation also has to content with the market, especially market shortages. Even Romem’s modest density proposal runs into the reality of a construction labor shortage, which would need to be addressed to significantly ramp up new production.

Romem also believes a blanket, modest upzoning bill could be more politically palatable than other options currently being debated. He says it’s not clear that the transit zoning changes in SB 50, the state’s current transit density bill that would allow five-story multifamily structures near high-quality transit, would add more housing than this modest density proposal. Championed by California State Sen. Scott Wiener, SB 50 would allow for significantly more density in high-transit areas, which would over time, make a bigger dent in emissions growth than the modest density proposal. But Romem believes his less dramatic idea is “way more likely to pass muster and be approved.” (SB50 was recently merged with a bill that would allow 4-plex development across much of the state, which would mimic Romem’s proposal).

Romem says the potential here is tremendous, but argues that legislators and housing advocates need to realize that changing the law isn’t enough. The state’s newly passed slate of ADU laws, for instance, which make it much easier for homeowners to add accessory-dwelling units to their property, does, in effect, allow for more units in formerly single-family only areas. But he argues that these laws still don’t address all the financial and logistical challenges of having homeowners build new units on their property.

“The pace at which you deliver makes a big difference,” he says. “But the point is, you can build an awful lot of housing with modest densification.”