Upzoning meets tenant protection: Rental redevelopment constraints in Los Angeles

• In Event: How State and Local Regulation Shapes Housing Density, Resilience, and Carbon Outcomes

Abstract

Many cities use upzoning as a tool to expand housing supply and moderate prices, yet it operates in direct tension with tenant protection policies. Where tenant protections prohibit the demolition of existing rental units, the supply-side effects of upzoning are fundamentally constrained. Striking the right balance between these two policy goals is therefore critical — but surprisingly underexplored. Most upzoning research focuses on owner-occupier markets where displacement is not at stake; evidence from high-tenancy urban markets remains scarce. This gap matters both for understanding the generalizability of upzoning research and for designing policies that protect tenants without foreclosing redevelopment entirely. This paper examines how rental demolition and redevelopment are regulated in Los Angeles, where successive layers of tenant protection (alongside broader regulatory barriers) have made redevelopment increasingly difficult. I argue that replacement requirements — particularly the obligation to provide affordable units in lieu of demolished rent-stabilized ones and to compensate displaced tenants — are the binding constraint that prevents redevelopment projects from penciling out financially. I support this with three empirical contributions: first, I document that a disproportionate share of upzoning has occurred in multifamily rather than single-family areas, concentrating redevelopment pressure on existing renters; second, I show that the allowed density increases are often too modest to offset replacement costs; and third, I use a regression model to identify the conditions under which redevelopment does occur and what explains the ratio of new to demolished units. My results show that viable redevelopment projects are almost entirely limited to the demolition of small buildings — the only ones where compensation costs remain manageable. But because small buildings typically sit on small parcels, the achievable density gain is modest. Compounding this, much of the upzoning has been concentrated in lower-income areas with weak market demand, where redevelopment would not pay off regardless of regulatory conditions. Where redevelopment does occur, it is driven by a confluence of large zoning increases, high land values, and large lot sizes that enable high ratios of new to demolished units; low-ratio replacements are rare except in the highest-value submarkets. 

Los Angeles thus offers important lessons for other large rental cities pursuing upzoning. In principle, its framework strikes a reasonable balance: discouraging low-ratio redevelopments that displace low-income tenants with little housing gain, while preserving the viability of projects that substantially expand supply. By making low-ratio redevelopments financially unviable, the regulations effectively prevent a situation where vulnerable residents bear the costs of upzoning while the housing gains remain minimal. Beyond this, however, constantly shifting regulations create substantial uncertainty for developers, while weak governmental oversight means neither housing production nor tenant protection goals are being reliably met.

Author

• Vera Goetze, University of California - Los Angeles
  Presenting Author