The best zoning for desirable neighborhoods is:

  • less restrictive, allowing for varied property types and sizes. (100%, 2 Votes)
  • more restrictive, limiting the type and size of construction allowed. (0%, 0 Votes)

Total Voters: 2

California’s construction industry is currently experiencing a rebirth, but not everyone is pleased.

Much of the new construction is located in desirable urban areas, where empty lots are about as common as free on-street parking. Thus, builders are forced to purchase lots with existing residential improvements on them, and demolish the old structure before beginning construction on the new property.

Naturally, the neighbors aren’t happy. In Los Angeles, residents have sought to derail the building projects, citing the 2008 anti-mansionization ordinance restricting the size of homes built on small lots. These residents want to make this ordinance stricter, further limiting homes or new construction that either:

  • obstruct views from existing properties; or
  • change the character of existing “quaint” neighborhoods.

Not in my backyard (NIMBY) ordinances like these are contrived efforts by a few vocal (and generally wealthy) citizens to limit growth in their neighborhoods. One advocate for stricter zoning claims that mansionization benefits a few people while the neighbors ultimately pay the price.

However, this calculus is mistaken. Limiting growth through stricter zoning benefits those few neighbors, ultimately to the detriment of the vigor of the larger economy.

Each of these construction projects injects needed cash into the economy through added construction jobs and real estate transaction fees. Plus, builders only build where there is demand. And if the demand is for new housing in urban areas close to jobs, then that is where they need to be allowed to build.

Across the state, new construction is taking place in both the multi-family and single family residential (SFR) sector. 2013 saw an increase of roughly:

  • 50% in SFR starts; and
  • 33% in multi-family starts.

Expect multi-family starts to continue a steady rise of around 30% each year through 2015. SFR starts will likely fall back in the next couple years, as 2013’s rise was driven by the speculator-driven home price rise, not to be sustained in 2014.