Case Study 1 — The Millbrook Student Housing Crunch (Revisited)
This case study returns to the Millbrook housing story from Chapters 5 and 7 — now with the full toolkit. Rents near MSU rose 17% in one year. The rent control debate split the community. The zoning review is ongoing. What does the full framework say?
The problem is supply: Millbrook's zoning restricts most residential land to single-family homes. The 8,500 student-oriented rental units are concentrated in a small zone near campus. Demand has grown (enrollment up + new dorm insufficient) but supply hasn't (no new apartment construction in the restricted zone, and the closed Cedarwood complex took 200 units offline).
The zoning solution: if Walden County rezoned areas within 2 miles of campus to allow duplexes and small apartment buildings, developers could build 500–1,000 new units over 3–5 years. The supply shift would moderate rent growth. This is the Minneapolis model applied to Millbrook.
The political obstacle: homeowners near campus oppose densification (NIMBY). They worry about traffic, parking, neighborhood character, and property values. Their opposition is concentrated and organized; the beneficiaries (future renters who don't yet live in the new apartments) are diffuse and unorganized.
The lesson: housing affordability is a solvable problem. The economics is clear (expand supply). The politics is hard (NIMBYs are organized, renters are not).
Discussion questions
- If Millbrook rezoned to allow duplexes near campus, what does supply-and-demand predict for rents?
- Why do homeowners oppose development near their homes? Is their concern economically rational?
- How could the city overcome NIMBY opposition? (Hint: think about compensation, community benefits, graduated density.)