The Impact of ADU Legalization and Production on Rents, House Prices, and Land Values

Project Description

California’s accessory dwelling unit (ADU) reforms are contributing greatly to the state’s housing supply, but not much is known about how ADU legalization and production affect housing affordability. This project uses parcel-level data in California to identify the effects of ADU production on a city’s rents and housing prices, and to isolate the impacts of ADU legalization (i.e., the option value created for existing parcels) on land values. By studying all of these outcomes, our findings may hold lessons for how zoning reforms — "broad upzoning" — can increase housing production without increasing land costs, resulting in more affordable housing.

Status
Ongoing

Funding Source
US Department of Housing and Urban Development

Research Team
Shane Phillips, Michael Manville, Paavo Monkkonen, Jessica Schirmer