Association for Public Policy Analysis & Management

As housing demand is refocused on central urban neighborhoods, developers, landlords, and homeowners redevelop the existing housing stock to keep up with growth and changing housing needs. Despite housing shortages, local residents often resist redevelopment and the associated influx of newcomers, with varying levels of success. Planning regulations are designed to guide equitable development, but similar regulations and demand pressures lead to different outcomes in neighborhoods where local residents have — or lack — the political influence to resist development. This calls the efficacy of planning regulations into question, and suggests that local variations in the permitting process and code enforcement could undermine equitable development.

In this paper, I evaluate the effects of planning regulations and local political power on housing development activity in the City of Los Angeles between 2003 and 2013. I use a multilevel competing risks model to estimate the probability of redevelopment or the addition of new units on parcels with existing housing units. To estimate the effects of planning regulations and local political power, it is crucial to have an accurate measure of housing demand. I measure differences in housing demand between neighborhoods using the residuals from a hedonic price model. I then measure changes in demand based on county level factors that affect demand for local neighborhoods. I measure local political power by voter eligibility and participation, as well as homeownership rates and household income levels. I measure demand pressure, local political influence, and neighborhood characteristics by voting precinct, and I measure planning regulations and existing housing characteristics at the parcel level. I also test for differences in the observed relationships during the housing boom, bust, and recovery periods.

I expect to find that local political power plays a key role in the location of development activity in existing neighborhoods. The results of this study can be used to assess currently proposed zoning ordinances in the City of Los Angeles by comparing projected population growth with predicted rates of development activity in scenarios with varying levels of demand. More broadly, this research draws attention to an instance where equitable policies are insufficient; equitable processes and enforcement are necessary to produce equitable outcomes.