Upzoning with Strings Attached: Evidence from Seattle’s Affordable Housing Mandate

This paper analyzes the efects of a major municipal residential land use reform on new home construction and developer behavior. We examine Seattle’s Mandatory Housing Afordability (MHA) program, which relaxed zoning regulations while also encouraging afordable housing construction in 33 neighborhoods in 2017 and 2019. The reforms allowed for more dense new development (‘upzoning’), but also required developers to either reserve some units of each project at below-market rates or pay into a citywide affordable housing fund. Using difference-in-differences estimation comparing areas affected versus unaffected by the reforms, we show new construction fell in the upzoned, affordability-mandated census blocks. Our quasi-experimental border design finds strong evidence of developers strategically siting projects away from MHA-zoned plots—despite their upzoning—and instead to nearby blocks and parcels not subject to the program’s affordability requirements. The effects are driven by low-rise multifamily and mixed-use development. Our findings speak to the mixed results of allowing for more density while simultaneously mandating affordable housing for the same project.