The impact of upzoning on housing construction in Auckland

Journal of Urban Economics, 136, 103555. DOI: 10.1016/j.jue.2023.103555.

The University of Auckland Business School Research Paper Series

Posted: 5 Sep 2023

See all articles by Ryan Greenaway-McGrevy

Ryan Greenaway-McGrevy

University of Auckland Business School

Peter C. B. Phillips

University of Auckland Business School; Yale University - Cowles Foundation; Singapore Management University - School of Economics

Date Written: 2023

Abstract

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 residential 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 (displacement effects) 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 displacement effects that would necessitate more than a four-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. Full paper available at https://doi.org/10.1016/j.jue.2023.103555

Keywords: Upzoning, Land use regulations, Redevelopment, Housing construction, Housing affordability, Spillovers

Suggested Citation

Greenaway-McGrevy, Ryan and Phillips, Peter C. B., The impact of upzoning on housing construction in Auckland ( 2023). Journal of Urban Economics, 136, 103555. DOI: 10.1016/j.jue.2023.103555., The University of Auckland Business School Research Paper Series, Available at SSRN: https://ssrn.com/abstract=4560296

Ryan Greenaway-McGrevy (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Peter C. B. Phillips

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand
+64 9 373 7599 x7596 (Phone)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3695 (Phone)
203-432-5429 (Fax)

Singapore Management University - School of Economics

90 Stamford Road
178903
Singapore

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