BEYOND UPZONING: WHY DENSITY REFORM ALONE CANNOT SOLVE CALIFORNIA’S HOUSING CRISIS

Abstract

California has passed a substantial number of housing reforms intended to increase residential development, many of which focus on expanding allowable density. Yet housing production has remained persistently below what is needed. This thesis examines whether changes in maximum allowable density are actually associated with meaningful changes in housing production and prices across California jurisdictions over time. Using the National Longitudinal Land Use Survey, this paper employs a first-difference design to analyze California jurisdictions observed in 1994, 2003, and 2019. The findings suggest that increases in maximum allowable density are associated with greater housing production, especially multifamily housing, but that these effects are modest and do not consistently translate into lower housing prices. Interviews with housing providers suggest that these modest estimates reflect the broader regulatory environment where discretionary approvals, environmental review, fees, and layered policy requirements continue to constrain housing development even when formal density limits are loosened. This thesis argues that density reform is an important part of expanding housing supply, but that California’s housing shortage cannot be meaningfully addressed unless the state is willing to confront policy tradeoffs and reduce the broader set of regulatory burdens that continue to suppress housing production.