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Zoning Reforms and Housing Affordability: Evidence from the Minneapolis 2040 Plan

Author

Listed:
  • Gu, Helena
  • Mu, David

Abstract

In 2018, Minneapolis became the first U.S. city to eliminate single-family zoning through the Minneapolis 2040 Plan, with a central focus on improving housing affordability. Using a synthetic control approach, this paper finds that the reform reduced the growth of housing costs over the subsequent five years: home prices were 16-34% lower and rents 17.5-34% lower than a counterfactual Minneapolis. Placebo tests show these declines were the steepest among 83 donor cities (p=0.012). The effects are consistent across multiple robustness exercises and are not the result of new housing supply, but are likely due to weakened housing demand.

Suggested Citation

  • Gu, Helena & Mu, David, 2025. "Zoning Reforms and Housing Affordability: Evidence from the Minneapolis 2040 Plan," GLO Discussion Paper Series 1629, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1629
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    File URL: https://www.econstor.eu/bitstream/10419/320557/1/GLO-DP-1629.pdf
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    More about this item

    Keywords

    zoning reform; land use regulation; house prices; rental prices; synthetic control;
    All these keywords.

    JEL classification:

    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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