Exclusionary zoning

What Is Exclusionary Zoning?

Exclusionary zoning is a set of local land use regulations that restricts the types of housing and development allowed within a community, often with the effect of limiting affordable housing options and maintaining socioeconomic homogeneity. These regulations fall under the broader category of Real Estate and Urban Planning, governing how land can be developed and used. Exclusionary zoning practices can include requirements for large minimum lot sizes, prohibitions on multi-family dwellings such as apartments or duplexes, and strict building codes that increase construction costs. The underlying aim is often to preserve the "character" of a neighborhood, protect existing property values, and control population density, which indirectly influences the demographic makeup of residents.

History and Origin

The concept of modern zoning originated in the early 20th century in the United States. While early ordinances in cities like Los Angeles in 1908 initially focused on separating industrial nuisances from residential areas, the practice quickly evolved. Baltimore enacted the first explicit racial zoning ordinance in 1910, aiming to prevent racial and ethnic minorities from moving into certain neighborhoods. Although direct racial zoning was declared unconstitutional by the Supreme Court in Buchanan v. Warley (1917), municipalities soon adopted less explicit but still exclusionary ordinances that gained popularity nationwide²⁵, ²⁶.

A pivotal moment in the history of exclusionary zoning came with the 1926 Supreme Court case, Village of Euclid, Ohio v. Ambler Realty Co. In this landmark decision, the Supreme Court upheld the constitutionality of zoning ordinances as a legitimate exercise of a municipality's police power, provided they were not arbitrary or unreasonable and related to public health, safety, morals, or general welfare.²², ²³, ²⁴. This ruling significantly bolstered the use of zoning across the U.S., allowing for the proliferation of regulations that, especially after World War II, increasingly limited housing supply and diversity in suburban areas²¹. The federal government also played a role in standardizing zoning through the Standard State Zoning Enabling Act in 1922, which provided a model for states to enact their own zoning laws, further entrenching these practices²⁰.

Key Takeaways

• Exclusionary zoning refers to local land use regulations that restrict housing types and density.
• It often aims to preserve neighborhood character and property values, frequently leading to higher housing costs.
• Historically, these practices have roots in racial and socioeconomic segregation, even after overt racial zoning was outlawed.
• Exclusionary zoning contributes to reduced housing supply and can exacerbate issues of economic inequality and lack of affordable housing.
• The Supreme Court upheld the constitutionality of zoning in Euclid v. Ambler Realty Co. (1926), providing a legal foundation for these regulations.

Interpreting Exclusionary Zoning

Understanding exclusionary zoning involves recognizing its impact on various aspects of a community and housing market. When a municipality implements strict exclusionary zoning policies, it typically leads to a scarcity of diverse and affordable housing options. For example, by mandating large minimum lot sizes for single-family homes, such policies effectively prevent the construction of multi-family residences or smaller, more affordable dwellings. This can lead to increased housing costs, as the limited supply struggles to meet demand.

Interpreting the presence of exclusionary zoning in an area often points to a community's prioritization of certain characteristics, such as low population density and high property values, over broad housing accessibility and diversity. These regulations can create significant barriers to entry for lower- and middle-income individuals and families, influencing patterns of residential segregation and access to resources like quality public schools and employment opportunities¹⁸, ¹⁹. The implications extend to a region's overall economic development and social mobility, as it can limit the flow of labor to areas with job growth and perpetuate intergenerational disparities.

Hypothetical Example

Consider "Wealthyville," a suburban town surrounded by a bustling metropolitan area with strong job growth. To maintain its "rural character" and high property values, Wealthyville has implemented stringent exclusionary zoning laws. These laws include:

1. Minimum Lot Size: All new residential construction must be on lots of at least two acres. This significantly limits the number of homes that can be built and increases the effective land cost per home.
2. Single-Family Only: No multi-family dwellings (like apartments, duplexes, or townhomes) are permitted anywhere in the town.
3. Minimum Home Size: New homes must be at least 2,500 square feet, increasing construction costs.

As a result of these exclusionary zoning regulations, the average price of a home in Wealthyville is $1.2 million, far exceeding the median income of the metropolitan area. Essential workers, such as teachers, nurses, and service industry employees, who earn median wages in the broader region, cannot afford to live in Wealthyville. This forces them to commute long distances from more affordable neighboring towns, increasing traffic congestion and reducing their disposable income. The town's school district, despite being highly rated, sees limited diversity among its student body, as only families with substantial financial resources can afford to reside there.

Practical Applications

Exclusionary zoning manifests in various practical ways within real estate, market dynamics, and regulatory frameworks. One primary application is its influence on housing affordability. By restricting the types and density of housing, such as prohibiting multi-family housing or mandating large lot sizes, exclusionary zoning artificially constrains the supply of housing units. This leads to higher housing prices, making it difficult for lower- and middle-income households to access desirable neighborhoods¹⁶, ¹⁷.

These regulations are also extensively used to manage local infrastructure costs. Communities often adopt exclusionary zoning to limit population growth, thereby reducing demand on public services like schools, roads, and utilities, which are funded by local property taxes. This strategy, sometimes called "fiscal zoning," seeks to ensure that new development contributes more in tax revenue than it costs in public services.

Furthermore, exclusionary zoning plays a significant role in shaping social and economic landscapes. It contributes to residential segregation by income and, historically, by race. Wealthier communities, by limiting access to diverse housing types, can hoard amenities such as high-performing public schools and limit access to job opportunities for those who cannot afford to live within their boundaries¹⁴, ¹⁵. This impacts overall economic mobility and regional economic growth, as workers may be prevented from moving to areas where they would be most productive¹², ¹³.

Limitations and Criticisms

Exclusionary zoning faces significant limitations and criticisms, particularly concerning its socioeconomic impacts. A primary critique is its direct contribution to housing shortages and the exacerbation of housing affordability crises across many regions¹⁰, ¹¹. By limiting the supply of housing, especially more affordable types like apartments or smaller homes, exclusionary zoning drives up prices, making homeownership unattainable for many and increasing rental costs⁹.

Critics also argue that exclusionary zoning perpetuates and deepens economic inequality and residential segregation. These policies often create barriers for low-income individuals and minorities to access areas with better schools, job markets, and public services, effectively entrenching socioeconomic disparities across generations⁶, ⁷, ⁸. Some legal scholars contend that strict land use restrictions, by severely limiting how property owners can use their land, may even constitute a form of regulatory taking, infringing on fundamental property rights without compensation⁴, ⁵.

From an economic perspective, studies by institutions like the Brookings Institution suggest that stringent exclusionary zoning regulations can significantly hamper overall economic growth. By restricting the movement of labor to productive urban centers, these policies can reduce national GDP and hinder the efficient allocation of resources², ³. While proponents might argue that such zoning protects environmental quality or maintains neighborhood character, critics argue these benefits come at a substantial cost to broader societal welfare and equity¹.

Exclusionary Zoning vs. Inclusionary Zoning

Exclusionary zoning and inclusionary zoning represent contrasting approaches to land use regulation, particularly concerning housing accessibility. The fundamental difference lies in their objectives and effects.

Exclusionary zoning employs regulations like large minimum lot sizes, prohibitions on multi-family dwellings, or expensive building standards to effectively exclude certain housing types and, by extension, lower-income residents from a community. Its aim is often to preserve existing property values and maintain a low-density, often homogeneous, residential environment. This approach limits housing supply and can lead to increased prices and reduced economic diversity.

In contrast, inclusionary zoning is a policy designed to promote the development of affordable housing. It typically requires or incentivizes developers to set aside a certain percentage of new housing units for low- or moderate-income households, or to contribute to an affordable housing fund, as part of their new construction projects. Rather than restricting development, inclusionary zoning seeks to create more diverse and accessible housing options within a community. While both are forms of land use regulation, exclusionary zoning primarily restricts supply and entry, whereas inclusionary zoning aims to expand affordable supply and promote socioeconomic integration.

FAQs

What are common characteristics of exclusionary zoning?

Common characteristics of exclusionary zoning include minimum lot size requirements, limits on the number of housing units per acre (low density), restrictions on multi-family housing, minimum house size requirements, and excessive setback rules that dictate how far a building must be from property lines. These regulations effectively increase the cost of housing production and limit housing choices.

How does exclusionary zoning affect housing costs?

Exclusionary zoning directly impacts housing costs by restricting the supply of available housing, especially more affordable types. When the supply of homes is limited, but demand remains strong, prices naturally increase. This contributes to higher overall housing prices and reduced affordability.

Is exclusionary zoning legal in the United States?

Yes, the practice of zoning, including elements that can be considered exclusionary, was largely upheld as constitutional by the U.S. Supreme Court in Village of Euclid, Ohio v. Ambler Realty Co. (1926). While direct racial zoning was outlawed earlier, regulations that indirectly lead to socioeconomic exclusion are generally permitted, though they continue to be debated and challenged.

What are the arguments against exclusionary zoning?

Arguments against exclusionary zoning typically center on its negative impacts on housing affordability, economic inequality, and social equity. Critics contend that it limits access to opportunity for lower-income households, contributes to urban sprawl, increases commuting times, and hinders regional economic growth by restricting labor mobility.

Are there alternatives to exclusionary zoning?

Yes, several alternatives and reforms to exclusionary zoning are being explored and implemented. These include inclusionary zoning policies, which mandate or incentivize affordable housing units in new developments; upzoning, which allows for higher density development; eliminating minimum lot size requirements; and promoting mixed-use development that combines residential, commercial, and retail spaces.