Upzoned and Underwhelmed: The Effects of a Transit-Oriented Zoning Reform on House Prices and Rents

Abstract

This paper studies the effects of transit-oriented development ordinances in Chicago on unit-level house prices and rents. The policies reduced minimum parking requirements and increased density ceilings, centered first on rail stations and then on a growing collection of high-frequency bus corridors. I use future-treated units as a control group for earlier cohorts, finding that only the first policy — affecting units within 600 feet of rail stations — produced statistically significant price effects in the short-run. Though the estimated effects of the other policies were statistically insignificant, there was suggestive evidence that rents increased and house prices decreased. Some estimates increased in magnitude and became statistically significant in the long-run. Two complementary control groups composed of units near abandoned rail stations and in narrow buffers around treated areas corroborate these results. The findings contradict those of an earlier paper on the context and offer new evidence on the time-varying and heterogeneous effects of upzoning policies for homeowners and renters.