The Effects of an “Urban Village” Planning and Zoning Strategy in San Jose, California
Michael Kevane, C.J. Gabbe, and William A. Sundstrom
Abstract:
Allowing mixed-use and higher-density development is a common municipal policy response to pressing urban challenges, including housing affordability and climate change. Yet, comparatively little is known about the effects of density-enabling plans and policies. We study how a major 2011 planning initiative, the designation of “urban villages,” affected real estate development in San Jose, California. We track several outcome measures – permits for residential and commercial development, large development projects, parcel transactions, and parcel assessed values – before and after the urban village initiative. We find the initiative’s effects to be quite limited. The estimated treatment effects are generally not distinguishable from zero across specifications that vary by parcel land use, treatment period, and identification strategy. Potential explanations include a lack of actual zoning changes; urban village requirements that make development more complicated; and a mismatch between the development types envisioned in municipal plans and real estate market conditions.