Can Zoning Changes Increase Property Values? Insights from Salt Lake County and Beyond

When a property is rezoned from agricultural to commercial use, or from low-density residential to high-density, it’s easy to assume that its market value will instantly rise. But in the world of commercial real estate, things are rarely that simple.

A growing body of research suggests that zoning changes often do increase property values, but not always for the reasons you might expect. And not always in ways that are sustainable.

📍 A Case Study from Salt Lake County

A 2023 study titled "We Zoned for Density and Got Higher House Prices" by Murray & Limb analyzed 20 years of upzoning activity across Salt Lake County. Their findings were eye-opening:

• Residential density upzoning led to significant price increases across affected areas.

• Surprisingly, these increases weren’t driven by immediate development or construction.

• Instead, much of the appreciation came from land speculation and expectations about future potential. This suggests that zoning can increase value simply by creating the possibility of a more profitable use.

  
  

This distinction matters. It highlights that zoning changes can move the market even when nothing has physically changed on the site. But it also raises important questions about whether that added value is real, lasting, or just speculative.

🔍 What the Broader Research Shows

This isn’t just a Utah story. Similar findings have emerged in other markets:

• In Chicago, Freemark (2020) found that upzoning led to price increases without a corresponding rise in construction in the short term (Urban Affairs Review).

• A 2025 study from West Sulawesi, Indonesia found a 15% average increase in property values in areas that were rezoned, especially when those changes were paired with infrastructure improvements.

• Rodríguez-Pose & Storper (2020) emphasized that upzoning alone is not a silver bullet. Without demand and thoughtful planning, zoning reforms may fail to produce real benefits (Urban Studies).

  
  

Across the board, the takeaway is clear: zoning matters, but context matters more.

🏢 My Perspective as an Appraiser

Working across Utah, Arizona, and Nevada, I’ve appraised plenty of properties that were recently rezoned. In some cases, the change was transformative, opening new development potential, attracting investor interest, and justifying real increases in value. In others, the zoning change sat on paper while the property’s actual utility and market value remained flat. Sometimes the infrastructure wasn’t there. Sometimes the demand didn’t follow. And sometimes the new zoning simply didn’t align with what the market needed.

Zoning is a tool, not a guarantee. It works best when it fits with the timing, infrastructure, and actual demand in the area.

📌 Final Thought

Zoning changes can absolutely increase property values, but the effect is more nuanced than many assume. Whether you're a developer, investor, planner, or lender, the key is understanding not just the new zoning but the market forces behind it.

If you're working on a project involving zoning changes and want an informed, data-driven valuation perspective, feel free to reach out.