Upzoning and Single-Family Housing Prices: A (Very) Early Analysis of the Minneapolis 2040 Plan

Abstract

In December 2018, the Minneapolis (MN) city council approved a new comprehensive plan that proposed eliminating single-family zoning restrictions throughout the city. In this project, I study the initial impact of this change on the sales prices of affected housing units. I estimate a series of difference-in-differences models comparing the sales price of houses within 3-km of the Minneapolis border in the year before and year after the city adopted the plan. I find that compared with similar unaffected properties in surrounding cities, the Minneapolis plan change was associated with a 3% and 5% increase in the price of affected housing units. In addition, there is some evidence that this price increase is due to the new development option it offers property owners. I find that the plan-related price increases are larger in inexpensive neighborhoods and for properties that are small relative to their immediate neighbors.