We Zoned for Density and Got Higher House Prices: Supply and Price Effects of Upzoning over 20 Years

ABSTRACT

Does planning for higher density increase housing development and decrease prices? We study nineteen repeatedly upzoned densification areas in Brisbane, Australia. We create a site-level dataset on dwelling stock, planning regulations, and prices, comprising all 25,775 sites in these areas. Only 2% of the zoned capacity was used in any five-year period. Zoned capacity doubled over the twenty-year study period, but 78% of sites with zoned capacity in the first period remained undeveloped. Higher rates of new housing supply are robustly related to higher prices. Zoned capacity has no relationship to price across numerous regression models.

摘要

规划更高的住房密度是否会增加住房开发和降低价格？我们研究了澳大利亚布里斯班的19个反复被提高住房密度的地区。我们创建了一个关于住宅存量、规划条例和价格的站点级数据集，包括这些地区的所有25,775个站点。在任何一个五年期内，只有2%的划定容量被使用。在二十年的研究期间，划定的容量翻了一番，但在第一个时期，有划定容量的78%的土地仍然没有开发。较高的新房供应率与较高的价格有着密切的关系。在众多的回归模型中，划定的容量与价格没有关系。

KEYWORDS:

• Zoning
• planning
• density
• house prices
• supply

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 An 800 m walkable catchment as identified in the SEQRP with an additional 400 m buffer to account for a “ripple effect exerting extra market pressures beyond the boundary onto surrounding properties” (Newton and Glackin 2014, pp. 131–132).

2 Standard Australian census statistical divisions comprising approximately 10,000 people per SA2.

3 Note that the price in economic models like these represents the rental price of housing not the asset price of housing, which will deviate from being a fixed ratio of rental price due to factors that affect the asset pricing, such as tax rates, interest rates, and expectations. However, we allow for the idea that market clearing may also occur via dwelling asset prices, which is a common part of the planning story of dwelling prices.

4 It is even possible for strict controls on density to encourage faster new dwelling supply in this story because they reduce the payoff to delaying development in the form of developing to higher density later.

5 We looked at various data transformations of the overall activity centre level data, including price growth rates, change and growth rate of zoned capacity, and absolute unit variable changes. These same overall patterns of higher price growth being positively related to both higher zoned capacity and higher dwelling growth are evident across the board in our data, though the relationship is not statistically significant in some data transformations.

6 ABS Census data for Brisbane (UCL). Geographic classifications for city regions from the 1996 census do not match later years, and hence the 2001–2016 period is the basis for comparison.

7 Excluding the zoned capacity variable while retaining the interaction terms improves the statistical significance on the interaction term without changing its magnitude.