One area that is particularly important for economic well-being and wealth accumulation is housing. Families who can purchase their own home in the neighborhood of their choice at a fair price and see the value of their home grow over time do better economically in the long run. But numerous policies have systemically discriminated against Black families who wish to pursue that path. This blog focuses on one of these policies: exclusionary zoning laws, which have played a role in causing racial disparities in the housing market.

Exclusionary zoning laws place restrictions on the types of homes that can be built in a particular neighborhood. Common examples include minimum lot size requirements, minimum square footage requirements, prohibitions on multi-family homes, and limits on the height of buildings. The origins of such laws date back to the nineteenth century, as many cities were concerned about fire hazards as well as light-and-air regulations. In the subsequent decades, some zoning laws have been used to discriminate against people of color and to maintain property prices in suburban and, more recently, urban neighborhoods.


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Exclusionary zoning laws enact barriers to entry that constrain housing supply, which, all else equal, translate into an equilibrium with more expensive housing and fewer homes being built. Consistent with theory, the empirical literature finds a relationship between restrictive land use regulations and higher housing prices.For example, a study in 2005 finds that prices of Manhattan condominiums are 50 percent higher than they would be without zoning restrictions.

Finally, exclusionary zoning contributes to the racial wealth gap. If Black families are excluded from higher priced neighborhoods or if neighborhoods where Black families live are zoned into being less valuable, the homes purchased by Black families will not be worth as much over time as those of white families. In the long run, this diminishes wealth not only for the generation purchasing the home, but for descendants who receive a lesser inheritance. Indeed, housing likely explains more than 30 percent of the Black-white racial wealth gap.

The American Jobs Plan takes important steps to eliminate exclusionary zoning. Specifically, the Unlocking Possibilities Program within the American Jobs Plan is a $5 billion competitive grant program that incentivizes reform of exclusionary zoning. The program awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate needless barriers to produce affordable housing and expand housing choices for people with low or moderate incomes. It supports bottom-up community engagement that would help communities identify the most powerful levers to produce more affordable housing and incentivizes new land-use and zoning policies to remove those barriers.

Zoning? We might understand protecting and expanding voting rights, fighting employment discrimination, or attacking white supremacist organizations (all of which the Administration is doing.). But why highlight housing and zoning policy?

These racial restrictions were combined with exclusionary zoning, only allowing single-family houses on large lots. This barred multifamily developments, further excluding non-whites and keeping their children out of better-funded public schools. (We finance much of our public education through local property taxes, which grew more rapidly in these wealthier suburbs.)

Some places are changing policy. Minneapolis has voted to end single-family zoning on 70% of its residential land, Portland will allow up to four units on previously restricted lots, and Berkeley has voted to end single family zoning, driven by a recognition of its racially discriminatory impacts.

Exclusionary zoning is the use of zoning ordinances to exclude certain types of land uses from a given community, especially to regulate racial and economic diversity.[1] In the United States, exclusionary zoning ordinances are standard in almost all communities. Exclusionary zoning was introduced in the early 1900s, typically to prevent racial and ethnic minorities from moving into middle- and upper-class neighborhoods. Municipalities use zoning to limit the supply of available housing units, such as by prohibiting multi-family residential dwellings or setting minimum lot size requirements. These ordinances raise costs, making it less likely that lower-income groups will move in. Development fees for variance (land use), a building permit, a certificate of occupancy, a filing (legal) cost, special permits and planned-unit development applications for new housing also raise prices to levels inaccessible for lower income people.[2]

The increased use of exclusionary zoning finally caused the federal government addressed the issue with the enactment of the Standard State Zoning Enabling Act in 1922. The legislation established the institutional framework for zoning ordinances and delegated land-use power to local authorities for the conservation of community welfare and provided guidelines for appropriate regulation usage.[8] In light of those developments, the Supreme Court considered zoning's constitutionality in the 1926 landmark case of Village of Euclid, Ohio v. Ambler Realty Co. The Court ultimately condoned zoning as an acceptable means of community regulation. After the decision, the number of municipalities with zoning legislation multiplied, from 368 in 1925 to over 1,000 in 1930.[9]

After the end of World War II and the country's subsequent suburbanization process, exclusionary zoning policies experienced an uptick in complexity, stringency and prevalence as suburbanites attempted to more effectively protect their new communities. Many people had severed ties with the city and its unwanted elements as they searched for their suburban utopia. They feared that left unchecked, the very city elements that they had escaped would follow them into the suburbs. Thus, middle-class and affluent whites, who constituted the majority of suburban inhabitants, more frequently employed measures preventing immigrant and minority integration.[8] As a result of resident's newly-found protectionism, the number of jurisdictions with such ordinances increased to over 5,200 by 1968.[9]

Well-off whites mainly inhabited the suburbs, but the remaining city residents, primarily impoverished minorities, faced substantial obstacles to wealth. Many attributed their impecunious state to their exclusion from the suburbs. In response, a flurry of exclusionary zoning cases were brought before the Supreme Court in the 1970s that would ultimately determine the tactic's fate. The Supreme Court nearly always sided with the proponents of exclusionary zoning, which virtually halted any zoning reform movement. The ability of minorities and other excluded populations to challenge exclusionary zoning became essentially nonexistent and has allowed the policy's unabated continuation.[10]

Exclusionary zoning's assurance of lower densities precludes some potential deleterious consequences associated with increased population density. More people in a community can result in more traffic congestion, which may interfere with the original inhabitants' quality of life. Greater populations may lead to strains on potentially limited or vulnerable environmental resources such as water or air, if the urban form is designed in an automobile-dependent way.[14]

Some suburbanites also champion exclusionary zoning policies on the simple motivation of excluding unalike groups irrespective of any negative effects that they may impose. Some researchers partly attribute the policies to class or racial prejudice as individuals often prefer to live in homogeneous communities of people similar to themselves.[15] Others assert that race is merely a proxy and that upper classes and whites stereotype overall neighborhoods containing certain groups rather than the individual group members specifically. Such areas are stigmatized for their perceived correlation with high crime, low-quality schooling and low property values.[16] Additionally, the entrance of heterogenous residents could have severe political ramifications. If enough lower-income individuals, who typically differ in political ideology, move into the community, then they may garner enough political power to overshadow the traditional contingent. As such, the original constituency is politically subjugated in the very community in which they used to enjoy power.[14] Thus, whites and upper classes divert those groups for their unsuitable characteristics, perceived link with negative neighborhood qualities and threat to community politics.

All land-use factors contribute to mounting housing unit prices in comparison to less regulated communities. The communities specifically administering restrictive ordinances experience higher housing costs, like neighboring areas. Exclusionary zoning affects the overall regional housing market by reducing the total supply of units. As there are less available units, the demand for the units will rise causing more expensive housing across the area. Ultimately, the additional competition and resulting costs accumulate making regional markets with strictly regulated housing have 17% higher rents and 51% higher housing prices than do leniently governed areas.[19] Therefore, housing regulations evidently have significant impacts on both the specific community and overall region's housing expenditure.

The introduction of modern zoning in 1916, and subsequent promotion by the federal government, provided a new avenue for pursuing segregation. While explicit mentions of race would not be tolerated by the courts, zoning actively assumed economic segregation, which had clear racial implications.

If the use of zoning toward segregationist ends were merely historical, there would be no more of a case for scrapping zoning than there would be for scrapping road construction or public schools. The trouble is that zoning remains first and foremost a tool of racial and economic exclusion. So long as even a tiny minority of homeowners associate racial or economic homogeneity with high property values, or would prefer to keep exclusive access to jobs and high-quality public services to themselves, zoning will always function as a tool of segregation. 006ab0faaa

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