Explainer: How zoning laws impact housing costs and income inequality

     Segregation happens for many reasons, and zoning laws have played a big part. (Lindsay Lazarski/WHYY)

    Segregation happens for many reasons, and zoning laws have played a big part. (Lindsay Lazarski/WHYY)

    Segregation happens for many reasons, and zoning laws have played a big part.

     

    Every city’s housing supply is limited.

    For one thing, there’s only so much land to go around. But another kind of limit is artificial. In most cities, lawmakers make laws dictating how much development can occur in different neighborhoods, what kind of housing can be built and where residents can shop or go to school. The artificial kind of limit is called zoning.

    In the past few years, a growing chorus of academics, economists and journalists have been investigating the link between zoning laws, housing costs, income inequality and segregation. Increasingly, many conclude that zoning laws are to blame for the crises of housing affordability that many neighborhoods and some whole cities are experiencing around the country.

    Many cities set aside wide areas of land for single-family housing only, or they limit the number of units that can be built on properties zoned for multifamily use. At its most basic level, zoning gives cities some level of control over how their land gets developed. Zoning codes, which came into wide use starting in the early 20th century, are used to pursue a range of non-controversial land-use outcomes, like keeping strip clubs, shooting ranges and oil refineries away from schools and playgrounds, for example. But they’ve also been used, in some cases, to keep poor people and minorities out of certain neighborhoods.

    Even when zoning laws aren’t crafted with discriminatory purposes in mind, many researchers say, overly limiting the amount of housing that can be built increases the cost of housing and disproportionately hurts those with lower incomes. Rents rise, and the availability of reasonably priced housing falls.

    “Zoning restrictions — be they in the form of minimum lot sizes, off-street parking requirements, height limits, prohibitions on multifamily housing or lengthy permitting processes — are supply constraints,” said Jason Furman, chairman of the Council of Economic Advisers, in a speech last month. “Basic economic theory predicts, and many empirical studies confirm, that housing markets in which supply cannot keep up with demand will see housing prices rise.”

    Others, like Matt Yglesias of Vox, have been singing this song for years. “Land near major cities is very expensive,” Yglesias wrote in 2012. “The natural solution is to construct multifamily housing — deploying the advanced technology of the elevator if necessary — in order to fit a large quantity of people into scarce land.”

    The logical conclusion to this line of thinking is that cities can keep housing costs down by simply lifting some of the restrictions they’ve placed on the housing supply. That’s easier said than done. For one thing, residents of single-family neighborhoods tend to like those neighborhoods the way they are and feel they have a right to keep them that way. Even when zoning restrictions are eased, developers sometimes decide to simply build bigger houses for richer people rather than more units at lower rents. Moreover, by the time many cities start to confront these issues, housing costs are already so high that drastic increases in the housing supply would be required in order to make a noticeable difference.

    In a paper called City Unplanning, David Schleicher, a law professor at George Mason University, argues that making zoning decisions at the very local level, following the interests of one neighborhood or one single block, misses the forest for the trees. The citywide interest in increasing the housing supply should be given just as much consideration as the hyperlocal interest in protecting a neighborhood’s character, Schleicher suggests.

    Cities across the U.S. are seeing an influx of new residents, including many of the same groups that emptied cities out in the latter half of the twentieth century, leaving poor neighborhoods in crisis and decay. If that resurgence continues, cities will need to think carefully about how to accommodate new residents without displacing the ones who stayed all along. 

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