Going it alone: The impact of upzoning on housing construction in Lower Hutt

Abstract

This paper studies a sequence of zoning reforms enacted in Lower Hutt, a constituent municipality of the wider Wellington metropolitan region of New Zealand. Beginning in the late 2010s, Lower Hutt independently implemented a sequence of widespread zoning changes to enable medium- and high- density housing in residential areas. Using a synthetic control to specify the policy counterfactual, we find that these zoning changes generated a three-fold increase in consents per capita and nearly tripled the number of housing starts over the six years subsequent to the onset of the reforms. Depending on how potential displacement effects are accounted for, the Lower Hutt reforms increased housing starts across the wider metropolitan region by approximately 10 to 18%. We also present evidence that the upzonings reduced rents by around 21% relative to the counterfactual.