In our review of zoning in the United States, we’ve come to understand that zoning has been credited with protecting neighborhoods and property values but has also been blamed for excessively high housing costs and a lack of affordable housing. There is, to many, a downside to zoning.

In Part 1 of my series on zoning ( POBSeptember 2007), I discussed some of the history of land use control through zoning in the United States. We saw that zoning was found to be constitutionally acceptable by the Supreme Court in the caseEuclid v. Amblerbut that issues such as pre-existing nonconforming uses required legislative remedy. In Part 2 (POB November 2007), I discussed other remedies intended to provide relief and flexibility to zoning such as the variance, the exception, and certain innovative devices such as the floating zone, contract zoning and the cluster subdivision.

Now terms such as “snob zoning” and “not in my back yard (NIMBY)” have became a part of the public dialogue on the subject of land use controls. These views relate to the law of unintended consequences. Let’s explore the downside of zoning in more detail.

The Downside of Zoning

A national dialogue on the effects of land use control through zoning emerged at the end of the 20th century. Suburban communities that began their growth in the post-World War II years had stabilized and reached maturity structurally, politically and socially. Property values increased at double-digit rates through the ‘70s and ‘80s in many parts of the United States. A home built in the mid-1960s for $30,000 could be worth well over $200,000 in 2000. People have sought to protect their real estate values and at the same time limit growth in their communities that, they believed, would increase the property tax burden, encroach on open space and exacerbate traffic congestion. One means of limiting growth is through the imposition of “regulatory barriers” such as strict subdivision controls, excessive impact fees on developers, multifamily housing restrictions and restrictive zoning.

For instance, at the height of the post-World War II home building boom, many communities in Massachusetts increased the minimum lot size in their zoning ordinances and bylaws to decrease the density and rate of development. The effect of this device was to slow growth and force a higher class of (more expensive) housing. The result has been a dearth of low- and moderate-priced housing stock available for middle class and lower middle class families. Ironically, towns and cities have found that their employees, e.g., workers and teachers, cannot afford to live in the communities where they are employed.

In 1991 the Advisory Commission on Regulatory Barriers to Affordable Housing of the U.S. Depart-ment of Housing and Urban Development (HUD) published a report titled, “‘Not in My Back Yard’: Removing Barriers to Affordable Housing.” The 1991 report found that various regulatory barriers directly raise development costs in some communities by as much as 35 percent. In 2004, HUD published an update to the report that included findings from several more recent studies:
  • In 42 metropolitan areas, eliminating unnecessary government regulations, fees, and delays could reduce housing costs by 10%.
  • Excessive regulation can raise the final new home price by … 35%. In New Jersey, this amount prices approximately 430,000 households out of the market.
  • Moving from a light regulatory environment to a heavy regulatory environment raises rents by 17%, increases house values by 51%, and lowers home ownership rates by 10 percentage points.
  • Government regulation is responsible for high housing costs where high costs exist. Measures of zoning strictness are … correlated with high prices.
  • Regulatory system has gotten more complex over the last two decades and constitutes the single greatest problem in getting housing built. 1

The Response

The high cost of housing in greater metropolitan areas of the United States has become a social/economic issue leading, in many areas, to political response. The 2004 HUD update of the 1991 report listed several legislative initiatives of various states:
  • 1991 – California amended its Health and Safety Code to require a housing strategy to provide for a coordinated system of housing planning and to help communities meet their fair share of regional housing needs.
  • 1991 – Connecticut. Municipalities are authorized to implement inclusionary zoning to promote the development of affordable housing for long-term retention by use of deed restrictions, density bonuses and requiring payments into a housing trust fund.
  • 1992 – Illinois requires an analysis of the impact on affordable housing of every bill that potentially increases or decreases the cost of constructing, purchasing, owning or selling a single-family residence.
  • 1993 – Washington. The Affordable Housing Advisory Board and the State Department of Community Development prepare a plan including identification of regulatory barriers to affordable housing and recommendations for meeting affordable housing needs.
  • 1994 – Georgia. The legislature established the Barriers to Affordable Housing Committee to study possible elimination of the barriers to affordable housing. The Committee is charged with looking at building codes, property taxes, tax incentives, zoning and other land-use issues.
  • 1995 – Oregon enacted provisions to require certain municipalities to inventory the supply of housing and buildable land in their urban growth areas to determine density and growth rates and to analyze housing needs.2

In addition to these state efforts, one of the earliest legislative responses to a lack of affordable housing due to exclusionary zoning was passed in Massachusetts. The Massachusetts legislature passed Chapter 774 of the Acts of 1969, which amended Massachusetts General Law Chapter 40B. The act was subtitled “An Act providing for the construction of low or moderate income housing in cities and towns in which local restrictions hamper such construction.” The law established standards under which the local Special Permit Granting Authority may override restrictive local zoning and planning requirements and grant a comprehensive permit to provide for the construction of low or moderate income housing. In my next column in March 2008 I will examine the Massachusetts 40B process as one example of a response to the downside to zoning.

Content for this article was extracted from a paper written by the author titled, “Land-Use Control through Zoning” presented at the FIG Commission 3 workshop, Spatial Information Management Toward Legalizing Informal Urban Development, at Sounio, Greece, March 28-31, 2007.