Decades of Restrictive Zoning Helped Create our Housing Shortage

Decades of Restrictive Zoning Helped Create our Housing Shortage

Historically, American cities had realities that created a low quality of life for many residents. Industrial pollution, overcrowding, lack of capital improvements, and substandard housing were some of the most problems that made many neighborhoods unpleasant places to live. In an effort to improve the quality of life, restrictive zoning codes where often use to improve conditions and create a high quality of life.

These restrictive zoning codes were effective in achieving these goals of improved quality of life for those who could afford to live in those protected places, but the broad use of this tool resulted in other problems. Increased racial and economic segregation and a dramatic suppression of housing supply—even as demand for housing soared—were created by the artificial barriers instituted by zoning codes. Whether by limiting the height of new buildings, reducing unit counts in apartment buildings, or requiring more parking, these restrictions made construction more difficult, time-consuming, and more expensive. Overall, zoning dramatically reduced the number of housing units built, exacerbating our housing shortage and driving up costs.

The housing shortage was caused, in part, by restrictive zoning, rampant NIMBYism

—New Yorker, Nov. 30, 2020

Though restrictive zoning codes have been good for current homeowners (by increasing the value of their houses thanks in part to a restriction of supply), such government-imposed limits hurt the wider economy.

Local zoning laws have long been used as an exclusionary tool—helping create and perpetuate racial segregation across US cities and regions. After overtly racist zoning laws were banned by federal courts and statutes, restrictive regulations prevented the construction of affordable housing in wealthier and whiter communities. As a result, we continue to see persistent patterns of segregation and wide disparities in access to opportunity across racial and ethnic groups.

This also means we often have low density and land that remains underbuilt in whiter and wealthier communities, whether in exclusive suburbs or in city neighborhoods zoned for single-family homes.

Residents of these neighborhoods exert outsized influence over local zoning and planning decisions, protecting the status quo and blocking new housing development.

Comparing a 1989 aerial image of farmland near the Scioto River to a more recent aerial image, illustrating suburban sprawl development patterns.

Central Ohio needs to take a holistic look at its most exclusionary neighborhoods—those that have benefited by blocking development and keeping out working-class families and people of color.

Single-family zoning was the first of many obstacles erected to segregate communities. Redlining, which cut off needed investment in the form of federally backed mortgages, and covenant restrictions, which kept minorities and some ethnic white residents corralled in poorer neighborhoods, helped institutionalize the racial wealth gap.

Those practices made it harder for poor black families to move to the more desirable white communities. Currently, 40 percent of black households own their homes, compared with 70 percent of white households.”

Will Up-Zoning Make Housing More Affordable?
Governing Magazine, July 2019

Restrictive zoning regulations have a serious cost: reducing the supply of homes. This drives up the cost of existing homes on the market and prohibits builders from providing enough housing at the right price-points for everyone.

Unfortunately, current homeowners have an incentive to keep the system in place, because it benefits them as their own home values rise.