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.