[Alon]

What's really bad for anyone who pays rent is zoning restrictions. Way more people want to live in dense areas than the zoning permits, and this drives rents through the roof. In Washington, where there are strict downtown height limits, gentrification is spreading out along Metro lines from neighborhood to neighborhood. In New York, where the zoning outside Manhattan and inner Brooklyn is also fairly strict (it's much denser than in Vancouver, but way more people want to live there), neighborhood groups have taken to opposing anything that would make their neighborhood more desirable to anyone, for fear of increasing rents.

Of course some people are collecting those rents. For homeowners, restrictive zoning is a way of having government regulations prop up their property values. It works in exactly the same way that leads companies to try to get rules passed to make it harder for new competitors to sprout, only with zoning it's considered neighborly community activism.

The problem of course is that if you upzone part of the city, rents in that part will not be any lower than in the neighboring downzoned areas. Housing is housing. And if the city is expensive as it is, new construction will be luxury, and so people think that all upzoning leads to luxury development. In reality what happens is downfiltering: high-income housing gets reused as low-income housing, sometimes with subdivision into smaller apartments. When you have tight restrictions, what happens is the opposite, upfiltering: richer people renovate run-down buildings and combine small apartments into larger units, and rents go up. I think Vancouver's too young to have seen this on a large scale, but in New York, Philadelphia, and other old cities there are poor neighborhoods with very high-quality housing, in areas that used to be desirable but then got hit by white flight.

So the correct zoning level is "as high as it takes to get housing prices down to the cost of construction." Don't worry about zoning for too much density; developers aren't obligated to build 8-story buildings if they think they can only rent enough apartments for 6 stories.