What’s the matter with zoning?
Conversations in Columbus have been brewing for years about an overhaul of the city’s 70-year-old zoning code.
City officials are now saying they will likely vote on a large reform package this spring. While zoning, or restriction of land for particular uses, feels as American as apple pie, the institution is only an invention of the 20th century. The first zoning code was adopted in Los Angeles in 1904 and it was only affirmed as constitutional in a 1926 case involving the village of Euclid, Ohio.
While setting certain land aside for certain uses seems reasonable on its face, researchers have found some negative side effects to strict zoning codes.
Increased cost of housing
The most well-documented effect of strict zoning is the impact it has on the cost of housing. One 2018 study found that the implicit “tax” on housing levied by zoning exceeds the public costs levied by new construction.
This means housing is made more expensive than needed for an efficient housing market due to zoning because it limits the ability for enough housing to be created to meet demand.
Another study looked at the supply of housing in markets in the United States with strict zoning rules, finding supply could not keep up with demand in those markets. Still another study attributes much of the growth in United States housing prices over the past forty years to zoning restrictions.
Strict zoning can also have an impact on the most vulnerable. More land use restriction means less available housing for those who need it. A study earlier this year by a University of Maryland researcher found that cities with more restrictive zoning rules experienced higher rates of homelessness. This is because it reduces the amount of available housing and increases its price, pricing some people out of the market for housing altogether.
Economic and Racial Inequality
Zoning is a powerful tool for shaping the socioeconomic landscape of a city. A growing body of research suggests neighborhoods can have substantial impact on future outcomes for children.
Some have argued that zoning allows people in power to concentrate wealth and lock others out of neighborhoods.
This pattern of policymaking can also lead to instances of de facto racial segregation. Some scholars argue this was part of the historical justification behind zoning in the first place.
Restrictive zoning used side by side with redlining is an effective tool for enforcing de facto racial segregation.
A clear impact of restricting use of land is that people cannot react to changes in needs quickly. If a neighborhood was once a good candidate for industrial development but now is much more attractive as a residential area, zoning needs to move faster than developers to keep up pace or people will not be able to live in these areas. This means strict zoning laws can put a damper on growing local economies or make it difficult for more sluggish local economies to adapt.
Some cities, like Columbus, are taking the lead on zoning reform. But this reform can also be led at the state level. California, Connecticut, Massachusetts, and Oregon have all passed legislation mandating looser zoning at the local level. Utah had an innovative solution, appropriating funds for local governments to use for local zoning reform.
Zoning reform has the potential to be a place where people can make compromises across the aisle. Reform of zoning appeals to free-market adherents and advocates for racial justice. If we can grow our economy and make it more equitable at the same time, what is there to lose?
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