About 20% of single-family homes in urban cores are already upzoned. Across five markets that is 169,510 homes, 847,550 units of permitted capacity, and roughly 3,390 on the market at any time.
Zoning capacity is an economic asset, but it is often priced slowly and unevenly. How residual land value reveals parcels still trading like houses on land worth considerably more.
Between July 2024 and January 2025, 48 properties across nine Miami neighborhoods changed their zoning designation. That might sound like a small number—but the ripple effect can be huge. When one property is successfully rezoned, adjacent owners often follow suit. Over time, these piecemeal changes can unlock higher densities, new commercial uses, and a new wave of real estate activity.
Zoning can highlight real estate opportunities months—or even years—before they’re obvious to the broader market. When a city updates its code—allowing higher density or changing permitted uses—it effectively redefines a neighborhood’s future potential. Upzoning (for example, from single-family homes to multifamily) can boost property values long before any building permits are even filed.
The recent rezoning of the Christ Episcopal Church's properties to T4-O opens up even greater possibilities when combined with Florida's Live Local Act. This legislation, designed to promote affordable housing, provides significant incentives for developments that meet specific criteria, further enhancing the potential of properties.
Recent zoning changes in South-West Coconut Grove, Miami, have dramatically increased the development potential of properties in the neighborhood. Our Zoning Signal algorithm has identified a cluster of properties that stand to benefit significantly from these changes, highlighting new opportunities for growth and investment in the area.
Our new algorithm, Zoning Signal, found intriguing insights into Miami's zoning changes between 2023 and 2024. Among the most significant findings are properties that underwent district name changes, signaling comprehensive transformations in their development potential and influencing surrounding areas to follow suit.
We are automatically tracking zoning changes and their impact on real estate investments. Between 2023 and 2024, 5,627 properties in the City of Miami experienced zoning changes that affected their potential buildable area. I'm excited to introduce Zoning Signal, an algorithm we've developed to analyze zoning yields before and after municipal zoning changes. Cities update their zoning regulations at least twice a year, which can significantly impact what can be built on a property—and, ultimately, its value.
Our latest algorithm has spotlighted underutilized properties in Wynwood-Edgewater. In this exercise, I focus on identifying owners with the most significant capacity for residential development. We've uncovered some intriguing insights by organizing the data by owner name and calculating the allowable units per property group.
Traditionally, zoning arbitrage has been labor-intensive, requiring extensive manual research into local zoning laws, property records, and development potential. However, digitizing zoning regulations across multiple cities revolutionizes this landscape, enabling the automation and scaling of zoning arbitrage detection.
As I continued to explore underutilized sites in Miami's Wynwood-Edgewater neighborhood, I focused on the second site with the highest number of units allowed by zoning regulations. Currently, this site has no residential units. The zoning permits up to 1,250 units on the 363,184-square-foot (SF) site. The existing structure occupies 763,761 SF and comprises ground-floor retail spaces and parking facilities.
Zoning arbitrage refers to capitalizing on differences in zoning regulations to maximize the value or profitability of real estate investments. This strategy involves identifying properties where the current zoning laws either undervalue the property's potential or are likely to change in a way that increases the property's value.
Building on my previous exploration of underutilized properties in Wynwood-Edgewater, I dove deeper into the Mana Wynwood site to assess its development potential. The primary objective of this study was to determine how we could accommodate all permitted units on the site.
