Report finds prevailing zoning rules in growth regions prevent housing production from reaching historic levels

[ST. PAUL, MINN.] Housing Affordability Institute today released a new research report examining why housing production in Minnesota continues to lag behind historic norms more than a decade after the Great Recession. The report, Lot Sizes and the Supply Gap: Housing Production Constraints in Minnesota’s Growth Regions, finds that zoning rules governing lot size and width in fast-growing communities are a primary barrier to increasing housing supply at scale.

“Smaller lots allow housing development to become more efficient and better aligned with market demand,” said Nick Erickson, executive director of Housing Affordability Institute. “Housing production remains far below historic levels, with the state never recovering from the Great Recession. Adjusting lot size and width standards would go a long way toward restoring housing production and expanding homeownership opportunities.”

Regional Highlights:

• Minneapolis–St. Paul–Bloomington: Only four residential zoning districts in greenfield communities reviewed allow smaller-lot, entry-level homes.
• St. Cloud: None of the residential zoning districts in greenfield communities reviewed allow smaller-lot, entry-level homes.
• Rochester: All four residential zoning districts reviewed allow smaller-lot, entry-level homes, though one district may require adjustments to lot width.

Findings:

• Prevailing zoning controls in growing communities are insufficient to support the scale of housing production needed.
• Over-reliance on planned unit development variances demonstrates strong market demand for smaller lots not accommodated by base zoning.

ABOUT HOUSING AFFORDABILITY INSTITUTE 

Founded in 2018, Housing Affordability Institute is a 501c(3) think tank seeking to increase housing affordability and access while advancing homeownership opportunities for all. Housing Affordability Institute produces research, white papers and commentary on homeownership and the cost drivers behind our nation’s housing affordability challenges. Learn more at HousingAffordabilityInstitute.org.