If Auckland, NZ, were a U.S. city, it'd be our fifth-largest. Its story is remarkable. One in five homes in Auckland has been built since 2017, and prices are down 20% from their pandemic peak. In today's third episode of YIMBY Country, two experts share the numbers of a wildly successful reform.

A common NIMBY trope is that zoning is not constraining housing supply, therefore we don't need to upzone. Here's how to actually measure zoning constraints: - do developers build more after upzoning? - is apartment-zoned land more valuable than house-zoned land? 1/

>upzoning is more likely to result in gentrification without displacement in comparison to not upzoning lewis.ucla.edu/2026/06/10/1...

Very nice summary from @michaelwiebe.bsky.social of the evidence about how broad upzoning works in practice (rather than a few parcels here, a few there — the typical rezoning) www.buildingabundance.ca/p/upzoning

A common idea is that narrow spot upzoning leads to land value uplift, while broad upzoning does not. What explains this? Why doesn't broad upzoning lead to increased land values?

Nice to see this published.

🚨New literature review post: upzoning🚨 A deep dive into how zoning affects land prices, when zoning is a constraint on housing supply, whether zoned capacity makes sense, and a close look at Auckland's 2016 upzoning. 1/

🚨New literature review post: upzoning🚨 A deep dive into how zoning affects land prices, when zoning is a constraint on housing supply, whether zoned capacity makes sense, and a close look at Auckland's 2016 upzoning. 1/

Something is wrong with impact fees.

Discuss.

Land is a fixed factor; it is priced as a residual: housing price minus construction costs. So when upzoning increases land prices, because developers pay more for valuable development rights, this is *not* the same as an increase in input costs, eg steel or labor. 1/

New post: I walk through a supply and demand model of land and housing, and show how upzoning works, why development charges can reduce housing supply and why land value tax doesn't, and why rising land prices are explained by housing demand.

NIMBYs claim to care about displacement of renters when it's a new apartment building being proposed, but have nothing to say when displacement is caused by new detached houses.

Why are FIFA prices so high? Because for a 50,000 person stadium, the 50,001st customer—who does not get a seat—is willing to pay $1800. The first rejected customer sets a price floor, meaning the price can't be any lower than $1800.

The entire idea of 'affordable housing' impact fees is based on a false premise: that creating jobs for poor people is a bad thing. 1/

Zoning can be a binding constraint on housing supply even when there is unbuilt zoned capacity. Simple example: there are 3-storey buildings where zoning allows for 5 storeys, but it's not worth it to redevelop at current prices. However, developers would build 12 storeys. 1/

Why do housing and land prices rise together? Simple: increased demand for housing and constrained supply. Higher housing demand translates to higher demand for land, and when zoning constrains supply, increased demand pushes up prices.

When zoning is not a constraint, development charges are paid by homebuyers in the form of higher housing prices. The tax reduces developer demand for land, which reduces the supply of housing, resulting in higher prices.

Incredible stuff happening in New Zealand. This report proposes a legal framework where going over an objective threshold of housing scarcity (a premium on higher-density land prices) would trigger *automatic* upzoning.

🚨Land value tax alert🚨 How does LVT work in a general equilibrium supply and demand model of land and housing? It shifts down both the supply and demand for land, reducing the after-tax land price. The effect on developers is a wash, so the housing market is unchanged.

Misconception: development charges are paid by developers. Fact: development charges are paid by landowners (and by renters and homebuyers, when they make projects infeasible and reduce housing supply).

Do higher construction costs drive up housing prices? Not necessarily! When housing supply is constrained by zoning, prices are set by the scarcity of land, not marginal costs. Hence, costs can increase without affecting housing prices. Instead, they reduce land prices.

In a simple urban growth boundary model, when the UGB is binding, increasing construction costs has no effect on housing prices; instead, the cost comes out of land prices.

Vancouver allows 4-storey condos in the new Villages Plan. This is profitable and will increase land values, which the city can capture through IZ. So why not allow 6-storey condos and do even more IZ? It's win-win: more housing and more value captured! 1/

Spot upzoning maintains the scarcity of high-density land, so it increases the value of the upzoned low-density land. The city can tax this land lift. Broad upzoning removes the scarcity, so land lift = 0 and there's nothing to tax. This is why cities don't do broad upzoning.

Should we tax grocery stores so food banks can source food at lower costs? No, that would just push more people into needing food banks. Should we block apartments so land is cheaper for nonprofit developers? No, that would just push more people into needing subsidized housing.

How do we know we've upzoned enough? When: - high- and low-density land prices are equal. - additional upzonings do not increase land prices.

The density premium as a metric for constrained zoning: When zoning restricts the supply of high-density land, it becomes artificially expensive. We can measure this premium by comparing the land prices of high- and low-density land. When density premium >0, you need to upzone.

Pop quiz: Auckland and São Paulo upzoned by similar amounts (+30% increase in density), but housing supply increased by 8% in Auckland vs 2% in São Paulo. What's going on?

What do we know about how to leverage upzonings to generate substantial new housing supply? 1—Large increases in zoned capacity are needed 2—Upzoning needs to be in strong housing markets 3—Be patient: Change takes time That's our conclusion in a new research roundup @urbaninstitute.bsky.social

The main factor driving up land prices is increased demand for housing. In Vancouver, land values increased at similar rates in a heritage-protected mansion neighborhood and in the rest of the city.

Using the evidence from Auckland's upzoning, we infer that a 1% increase in housing stock reduces rents by 3.6%. Rents fell by 21.6% and the housing stock increased by 6.9%, so the elasticity of rents to housing stock is ln(1-0.216)/ln(1+0.069) = -3.6.

Who's writing the synthetic control study of São Paulo's 2016 upzoning?

Bollards are the future.

When a cartel has pricing power, sellers want to join the cartel. When restrictive zoning adds a scarcity premium to high-density land, low-density homeowners want to be upzoned. Hence, SFH homeowners benefit financially from upzoning as long as there is a scarcity premium.

Auckland had 389 parcels zoned for apartments before the 2016 upzoning, which added 11k apartment-zoned parcels. Intuitively, the land price of the initial 389 parcels will fall, due to competition from the new supply. Someone show this!

More published research showing that upzoning increased housing supply in Auckland.

This is a great video that puts a human face and personal story to the incredible quantitative research on moving chains done by Evan Mast and others. I think it's going to have a big impact. youtube.com/watch?si=pm9t2HI0WtzV1zMp&v=QQYMUMTI7fk&feature=youtu.be

The LMW paper is asking: is it easier on average to build new housing in Group 1 or 2? Group 1: Detroit, Memphis, Pittsburgh, Rochester, Tucson Group 2: Cincinnati, Fort Worth, Houston, Kansas City, St. Louis Did you answer "there's no difference"? 1/

If upzoning increases land prices, won't this reduce the feasibility of new housing projects? No, this worry is exactly backwards. Developers pay more for higher-density land *because* upzoning enables feasible new projects. If they weren't feasible, devs wouldn't pay more. 1/

The YIMBY case for upzoning is pretty simple: restrictive zoning creates a scarcity premium on high-density land. We should upzone until high-density land is no longer artificially scarce, and the scarcity premium is zero.

You may have heard that San Francisco has 70k unbuilt housing permits, therefore regulation is not a constraint on housing supply. The actual number is more like 4k. And even "building permit issued" is not construction-ready, since you still need construction documents.

Rollet finds that eliminating zoning reduces rents in NYC by 18%; when he turns off the migration response (so the population is constant), this becomes a 33% drop in rents. The actual 'market' is broader than NYC, so even a big reform in NYC is small relative to the market. 1/

What does it mean for zoning to be a constraint on the supply of housing? In a simple model, zoning restricts the total number of homes that can be built: the supply curve becomes vertical. Here, increased demand just raises prices, with no new quantity. 1/

Housing submarkets are interconnected: adding supply at the high-end reduces prices at the low end. You have to be a science denier to think otherwise.

Will left-NIMBYs be the kingmaker of housing policy debates? They care about affordability, but get the economics wrong. Will they update by joining YIMBYs, or by switching to caring about 'liveability' instead?

Will left-NIMBYs be the kingmaker of housing policy debates? They care about affordability, but get the economics wrong. Will they update by joining YIMBYs, or by switching to caring about 'liveability' instead?

Two goals for housing policy: 1) absorb demand from rich newcomers. This is necessary maintenance work to prevent a demand cascade from raising prices across the housing ladder. 2) provide immediate housing for poor people. 1/

Left-NIMBYs think that blocking new apartments stops gentrification. What actually happens: new demand is redirected to the existing housing stock. Instead of living in new apartments, rich newcomers buy up old homes and displace renters.

Left-NIMBYs think that blocking new apartments stops gentrification. What actually happens: new demand is redirected to the existing housing stock. Instead of living in new apartments, rich newcomers buy up old homes and displace renters.