Why upzoning alone won't fill the lots

Regional planners often assume that zoning reform, paired with transit-oriented development, is sufficient to spark market activity. West Oakland’s scenario tested this assumption directly: we modeled what would happen over 10 years if the city relaxed zoning from RM-2 to RM-4 and added four major TOD projects to improve walkability and transit access. The simulation captured the full chain of developer behavior: appraisals, construction feasibility, financing, and the competitive pressure developers face from alternative investment sites.

Price surfaces did respond to the zoning and transit investment. Land values lifted in the study corridor, reflecting the increased development potential. Yet this price signal failed to translate into new construction. Developers evaluated the same factors local planners knew informally: higher crime rates, complicated parcel ownership patterns, and the high cost of assembling scattered small lots into developable sites. Even with more permissive zoning and improved transit access, the project-level economics remained uncompetitive against easier greenfield opportunities elsewhere in the region.

The model overturned the incremental-liberalization hypothesis: zoning and transit alone do not guarantee investment. Instead, it revealed a binding constraint that price signals alone cannot solve — the specific risk profile of an established neighborhood. This finding redirected the client’s strategy from zoning advocacy to harder interventions: land banking, site assembly, and targeted public investment in the specific amenities developers weight in their site-selection models.