In the past few years, St. Paul planning staff have been working on a “1-4 Unit Housing Study,” in which they are considering changes to the zoning code that would increase neighborhood housing options. Various local news sites have covered this study, and I’ve written frequently about it for this site. In most of this coverage, the headline focus has been on one broad change: legalizing small multi-unit buildings, such as fourplexes and townhomes, in all residential neighborhoods.
But there’s another proposed change that’s gone almost entirely under the radar thus far. In addition to legalizing four or five housing units per lot, the current staff proposal would substantially reduce minimum lot sizes, a more technical but similarly important barrier to housing affordability.
Currently, neighborhoods zoned for single-family housing in St. Paul have strict rules mandating a minimum square footage for each lot. St. Paul’s tightest single-family district requires lots to be 9,600 square feet, while the loosest single-family district still requires 5,000 square feet. This forces homebuyers or renters to pay for more land than they might otherwise prefer, driving up housing costs. Under the proposed zoning code rewrite, the minimum lot sizes would be substantially lower: either 1,000, 1,500 or 2,000 square feet per unit, depending on the district. With these proposed changes, homes could be on much smaller lots, and even new duplexes would be allowed on substantially smaller lots than required for most single-family homes today.
Reducing the minimum lot size in this way could meaningfully increase housing affordability in St. Paul.
The Big Problem of Big Lots
Minimum lot size requirements aren’t a big problem when homebuyers or renters prefer large lots. But as land gets more expensive in more high-demand areas, minimum lot sizes are more likely to be a binding constraint that forces people to pay for more land than they’d otherwise prefer — an economist might call it a “consumption floor.” Even worse, minimum lot sizes can force the less privileged out of a neighborhood altogether: If a neighborhood requires 15,000-square-foot lots for new homes (as some Minnesota suburbs do), then anyone who couldn’t afford a home on such a big lot would be excluded from the neighborhood.
Two recent working papers by economists highlight some of the pernicious intentions and impacts of minimum lot sizes. The first, by Tianfang Cui, studies the adoption of lot size restrictions across the country in the past 80 years. Cui finds striking evidence that many jurisdictions adopted these restrictions in the mid-20th century in response to increasing Black migration across the United States. Due to a couple different Supreme Court Decisions, jurisdictions were legally prevented from explicitly limiting neighborhood access by race, and instead used minimum lot sizes as an “income filter.” Those that couldn’t afford the large lots couldn’t get into the neighborhood.
Amrita Kulka’s research, focusing on the contemporary impacts of lot size requirements, finds evidence of this income filter today. Looking at Wake County in North Carolina (which includes Raleigh), Kulka shows that neighborhoods with higher minimum lot sizes have higher-income residents. This is primarily because the higher lot size rules require homebuyers to pay for more land, causing residents to sort into higher and lower-density neighborhoods based on their ability to pay. Her further research in Boston finds a similar result.
Turning to St. Paul, evidence strongly suggests that our minimum lot sizes are a meaningful constraint on housing affordability.
In a memo released by the Saint Paul Department of Planning and Economic Development this year, city researchers found that St. Paul’s current zoning code (much of which was implemented in the mid-1970s) actually made our existing housing conditions illegal. They found that in St. Paul’s single-family districts, between 17 and 31 percent of lots did not meet the minimum lot size requirements — likely a result largely driven by housing built before current zoning was in place. This is a sign that many households would be perfectly willing to pay for less land than required by zoning.
This statistic is supported by data from housing researcher Salim Furth, who found that in St. Paul, 59% of lots with newly-built housing were very tightly zoned (meaning that the actual lot size was between 90 and 110 percent of the required lot size).
This type of “bunching” around a minimum lot size requirement is a strong indicator that some St. Paul households would prefer to have lower-cost housing in exchange for a smaller lot — if only they could.
Inevitably, this ties into neighborhood exclusivity, too. If you look at a current zoning map of St. Paul, you can see that large swaths of the most historically expensive and exclusive parts of the city, like my neighborhood of Mac-Groveland, have zoning districts with high minimum lot sizes. This limits the types of housing that can be built today — and therefore, it limits the types of residents that can move into the neighborhood.
The Benefits of Allowing for Right-Sized Lots
To understand the potential benefits of reducing minimum lot size requirements, we can look at a fairly similar reform in a fairly different city: Houston, Texas. Houston has a reputation for being an American city that doesn’t use American-style zoning. It doesn’t have separate zones for single-family homes, apartments, and stores, with narrow density regulations on each. But for a long time, it did have strict minimum lot sizes.
As a study by M. Nolan Gray and Adam A. Millsap documents, in 1998 Houston rewrote their regulations on subdivisions. They reduced single-family lot size minimums from 5,000 to 3,000 square feet, and allowed for even less if the development met certain conditions — a very similar change to the one proposed in St. Paul.
This legal change helped formalize and streamline an already-emerging trend of small-lot development, facilitating the development of thousands of new, smaller homes in successive years. These smaller homes came about in two different ways, both of which I’d hope to see in St. Paul. First, new housing developments were built on smaller lots. Second, already-developed plots of land were split into smaller townhouse lots, adding more affordable housing to already built-out areas.
This type of development is a housing win in two important ways. Most importantly, it allows people to live on smaller lots and pay for less land, eliminating the exclusionary “income filter” effect of minimum lot size requirements. Additionally, it increases the overall availability of housing, reducing market-wide housing costs and letting more people move to desirable areas in the aggregate.
Anecdotally, I’ve recently seen two attempts to do this kind of development in my own St. Paul neighborhood. Both were stymied by their need for a variance from the existing zoning code. In 2021, a resident tried to split their lot to allow for a second home but was blocked by immediate neighbors who opposed the plan. A year later, a similar lot split was vetoed by the city council in a “quasi-judicial” decision. In both instances, nearby lots on the same street were already smaller than the legal requirement, because they were built before today’s zoning code — yet the homeowners could not split their lots into smaller ones.
These are great opportunities for new housing that we should be encouraging. Fortunately, under St. Paul’s new proposed zoning, they would be legal by-right, needing no special approval. Combined with the above evidence of St. Paul’s systematically binding lot size constraints, I see this as a very positive sign for the potential benefits to lot size reduction.
Adding to the Pile of Good Policy
Based on both the existing conditions in St. Paul and the previous results of a comparable change in Houston, it seems likely that this lot size reduction could be at least as impactful as the legalization of multiple units per lot in single-family areas, even though it hasn’t garnered nearly as much attention. In fact, splitting a lot to build two separate single-family homes might be even easier than building a duplex. Because this would simply entail building two single-family homes, it could rely on more commonplace construction techniques and financing structures than duplex-type development.
As always, it’s worth being clear-eyed about the relative importance of this change in housing policy. St. Paul has long struggled to provide enough housing for its lowest-income residents, and smaller lot sizes won’t fix that problem — only extensive government subsidy will. More generally, zoning reform that legalizes housing options doesn’t guarantee that builders will take advantage of these changes and actually build the new housing. Even within the narrower world of zoning, one of our many other zoning rules (front and side setback requirements, height limits, lot coverage ratios, etc.) might turn out to be an unexpected snag preventing more affordable, smaller-lot development.
But every policy has limitations. Reducing minimum lot sizes will reduce housing costs, offering relatively more affordable housing. It will help grow the overall housing supply, further improving housing market outcomes. And it will expand housing access in neighborhoods that have historically priced out a large chunk of potential residents. This is clearly the right direction for St. Paul, and it will contribute positively to the local housing policy mix.