Minneapolis Removed the Rule, and Prices Followed
The Minneapolis 2040 Plan took effect on January 1, 2020, making Minneapolis the first U.S. city to end single-family-only zoning citywide.[1] The change was straightforward: lots once reserved for one detached house could now hold duplexes and triplexes. The policy did not mandate density. It removed a prohibition.
Researchers Gu and Munro tested the result using synthetic-control and difference-in-differences methods, building a statistical counterfactual Minneapolis that never adopted the reform. Over the following five years, home prices in the real Minneapolis ran an estimated 16-34% lower than that counterfactual, and rents 17-34% lower.[2] When a city lets builders add homes, the price of housing grows more slowly.
The Measured Result
Five years after Minneapolis ended single-family-only zoning, home prices were an estimated 16-34% lower and rents 17-34% lower than a counterfactual city that kept the old rules.[2] Fewer restrictions, slower cost growth.
An Honest Caveat
The authors note that some of the slower rent growth may reflect a negative demand shock specific to Minneapolis in 2020 rather than added supply alone.[2] The direction of the effect is clear and consistent with supply economics, but the exact magnitude should be read as an estimated range, not a precise figure.
What Got Built
The reform legalized the "missing middle": duplexes, triplexes, and fourplexes on lots that once allowed only a single house. Between 2020 and 2024, Minneapolis permitted 87 such buildings totaling 225 new units, with permitting peaking in 2023.[3] These are modest numbers on their own, but they represent homes that the previous zoning code made illegal to build at all.
| Period | Buildings Permitted | New Units |
|---|---|---|
| 2020-2024 total | 87 buildings | 225 units |
| 2023 (peak year) | 24 buildings | 63 units |
Source: Federal Reserve Bank of Minneapolis, duplex/triplex/fourplex permitting 2020-2024[3]
Montana Scaled the Idea Statewide
What Minneapolis did in one city, Montana did across a state. In 2023, the legislature passed a package of reforms, sometimes called the "Montana Miracle," that legalized more housing on land already zoned for homes.[4] The laws faced legal challenges. They were ultimately upheld.
| Bill | What It Requires | Status |
|---|---|---|
| SB 323 | Cities over 5,000 must allow duplexes; tri- and fourplexes in cities over 50,000 | Upheld |
| SB 528 | Cities must allow at least one accessory dwelling unit by right on single-family lots | Upheld |
| SB 245 | Urban cities over 5,000 must allow multi-unit and mixed-use development | Upheld |
Source: Montana Department of Environmental Quality, 2023 Housing Legislation Bill Summary[4]
The Montana reforms matter for a second reason. Local zoning is often defended as untouchable local prerogative. Montana demonstrates that a higher level of government can set housing rules across many jurisdictions at once, survive court challenge, and clear the way for construction that individual cities had blocked.
Policy Connection
Minneapolis and Montana are working proof of concept for the fifth proposal of the Affordability and Immigration Act:
- -Policy 5 increases housing construction by tying federal funding to production outcomes and providing model fast-track permitting for municipalities, the same barrier-removal that Minneapolis and Montana enacted locally.
- -The federal role is to reward jurisdictions that build and reduce funds for those that block development, scaling a proven local result to national reach, as Montana scaled it statewide.
- -These reforms complement the demand-side proposals: adding supply and easing competition for existing homes push in the same direction on price.
Sources
- City of Minneapolis: Minneapolis 2040 Land Use Regulations - Elimination of single-family-only zoning, effective January 1, 2020
- Gu, H. and Munro, D.: Zoning Reforms and Housing Affordability - Evidence from the Minneapolis 2040 Plan (GLO Discussion Paper No. 1629) - Synthetic-control and difference-in-differences estimates of the price and rent effect, and the demand-shock caveat
- Federal Reserve Bank of Minneapolis: Unpacking Supply and Demand in Rent Trends Since the Minneapolis 2040 Plan - Duplex, triplex, and fourplex permitting data, 2020-2024
- Montana Department of Environmental Quality: 2023 Housing Legislation Bill Summary - SB 323, SB 528, and SB 245 requirements and legal status