What if They Passed Zoning Reform and Nobody Came?

Stone Arch Bridge in Minneapolis. Photo by Weston MacKinnon on Unsplash.

At the end of 2018, planners in Minneapolis drew extensive national press for an historic accomplishment: passing a comprehensive plan update that ended both exclusive single-family zoning and mandatory parking minimums citywide. Since an implementing ordinance passed in November 2019, it is now legal to build a duplex or triplex on any residential lot in Minneapolis.

These significant zoning reforms were framed as achievements for racial justice (beginning to redress the city's long history of segregation), for the environment, and for a more inclusive public process that didn't sideline renters and low-income residents. Minneapolis became a model for zoning-reform efforts in other cities and states, including Portland.

And yet an outstanding question then and now was how home builders would actually respond. Would Minneapolis begin to sprout triplex homes in its wealthy, exclusive enclaves—better known for single-family teardowns and expensive, large rebuilds? Would predatory speculators buy up affordable homes in poorer neighborhoods and replace them with triplexes built on the cheap?

So far, the answer appears to be no and no. As the Twin Cities weekly the City Pages reports, the number of triplex permits filed in Minneapolis so far in 2020 is...drumroll...three.

That's the total number of building permits requested from the city for new triplexes, according to Minneapolis manager of code development Jason Whittenberg.

“That scale of housing hasn’t been real popular,” he says. There tends to be a “missing middle” when it comes to new housing. You see plenty of single-family homes and plenty of large apartment buildings, but anything in the two to 20-unit range tends to get sidelined. They’re not as easy to finance, or as tempting for developers profit-wise.

“It was never our expectation that large swathes of the city would transform from single-family homes overnight,” he says.

So does this mean that the policy—one that we have praised here at Strong Towns and encouraged as a model for other places—is a failure? That the naysayers were right, incremental development is irrelevant to a city like Minneapolis, and future zoning or housing reforms should focus on much larger residential projects instead?

The answer is no. This is still an important policy step, one that I believe was necessary—but never sufficient—to achieve a healthier and more resilient housing market. It was never going to work short-term miracles on its own, and results so far should be a cautionary tale to those who think zoning alone is capable of that. But it's a crucial long-term step anyway.

For one thing, there are identifiable reasons why developers might not be flocking to triplexes, and the City Pages names some of them:

Eric Myers, director of government affairs for Minneapolis Area Realtors association, blames lines of city building code.

He says the association “applauds” Minneapolis for ambitious, forward-thinking policies like the 2040 Plan, a clear sign the city’s hungry for more, denser, and more affordable housing. But even though new zoning laws permit triplexes, the underlying code was still written with single-family homes in mind. Height restrictions are the same, as are setback requirements. Triplexes built on single-family lots have to fit within the footprint of the original building.

“Minneapolis has a lot of 40-foot lots,” he says. “A lot of triplexes aren’t going to fit.”

It’s possible to clear those hurdles by requesting a variance from the city, but that, Myers says, is a “cumbersome and expensive process” most developers would rather not bother with. Not when there’s easier money to be made elsewhere.

That isn’t to say triplexes would never work in the city, Myers says. He thinks a few regulations would have to change to make it feasible or desirable on the building side of things, but the demand is already there.

The devil is often in the details—lots of factors can add cost or complication to a project that is technically legal. We've seen this over the years, for example, with accessory dwelling units (ADUs), which are legal in many cities but rare because practical considerations make them uneconomic or undesirable. And what it takes to actually open the ADU floodgates hasn't always been obvious. Los Angeles, not a place known as a hotbed of interest in ADUs, seems to have stumbled upon the secret sauce (with the help of state legislation): a stunning 1 in 5 housing permits issued in LA in 2018 was for an ADU.

I've described this phenomenon using an ecological metaphor: that of a limiting factor or nutrient. You can give a plant all the nitrogen it needs, but if there isn't enough phosphorous, rain, or sunlight, it's all for naught. The same goes with change in a lot of complex, multi-factor systems: you have to find the key factor that is actually blocking change, and fix that. In Minneapolis, it seems the zoning alone isn't it.

Again, this doesn't make zoning reform pointless. It makes it necessary but not sufficient.

For another thing, change takes time to begin to snowball. Residential builders are notoriously risk-averse, and the lenders they rely on to finance their projects are even more so. Everybody with skin in the development game wants to know they have a proven model, and so I suspect it's going to take a few more gutsy entrepreneurs doing successful proof-of-concept projects in this neighborhood or that before interest begins to mount. (The City Pages piece identifies one of them: Terry Robertson, who is trying out a triplex model in redlined North Minneapolis.)

Large, established developers tend to make it clear that they're not interested in triplexes. Large, national lenders are wary. It will take a whole different ecosystem of small-scale developers and builders and community lenders—the kind that every city used to have—to build Missing Middle housing at scale. And cultivating that ecosystem is the challenge for cities that want it back: a forest doesn't grow overnight.

Why do I think it will eventually happen? Simple: the Missing Middle has a lot going for it. We know this kind of low-rise, small-lot housing, which delivers a mix of ownership and rental homes (it's very common with a duplex or triplex for the owner to live on site and rent out the other units), is a scalable way to build out whole cities. Why? Just visit New York, Boston, Philadelphia, DC, San Francisco, Chicago: you'll see miles upon miles of what else but duplexes and triplexes.

Yes, they were built in a different time and a different economy. But they remain the single least expensive way, per unit, to create homes. They produce a level of "gentle density" that is conducive to neighborhood business formation and survival, and to the use of public transit in lieu of some driving trips (allowing the city to scale back on expensive car infrastructure). And they empower a whole different set of neighborhood co-creators: a city built by many hands.

If you want that back—and you should—don't stop at the zoning code and think you're done. There's so much work left to do.

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