Time To Abolish Zoning? New Book Makes The Case

In many U.S. cities housing is too expensive. Housing prices in coastal cities such as New York and San Francisco are notoriously outrageous, but even in inland cities such as Nashville and Denver prices are rising rapidly. Research shows that zoning is a big contributor to America’s high housing costs, and in a new book, Arbitrary Lines: How Zoning Broke the American City and How to Fix It, former New York City planner M. Nolan Gray persuasively argues that cities should abolish zoning root and branch.

Before discussing the problems with zoning, Gray (full disclosure: Gray is a friend and sometimes coauthor) tells the reader what zoning is and what it is not. Zoning separates land uses into three broad categories—residential, commercial, and industrial—as well as numerous subcategories, and regulates density. Zoning is not building codes, historic preservation, subdivision ordinances, design review, environmental regulation, or comprehensive planning. These are all tools local governments use to shape the built environment, but they are not zoning.

Clearly defining zoning up front is important since the idea of abolishing zoning may seem radical if people think it is the only way local officials can mitigate the nuisances of city life. But as Gray explains, even though zoning has a big impact on a city’s form, it does little to make it more livable.

The book is divided into three parts. Part one explains what zoning is and why it was established. Part two presents four critiques of zoning: It increases housing costs, reduces economic growth, foments economic and racial segregation, and mandates sprawl. Part three discusses current zoning reform efforts and early successes; makes the case for abolishing zoning; and considers what city planning could look like in a world without zoning.

A brief history of zoning

Gray reminds us that zoning is relatively new. The first zoning code was established in New York City in 1916, barely over 100 years ago. Yet cities had already existed for thousands of years, and officials and residents of those pre-zoning cities had to deal with all the nuisances that plague modern city life—noise, pollution, waste disposal, congestion—without zoning. Did zoning offer local officials a new, more effective way to improve city life? Not really, says Gray.

While the troubles of city life were and are all too real, Gray explains that zoning quickly shifted from a tool to address traditional nuisances to something more nefarious—a way to exclude people from certain races, income classes, and occupations from desirable areas.

As an example, Gray brings up Berkeley, California’s zoning ordinance, established shortly after New York City’s. It contained the first single-family zoning district in the country. Ostensibly about protecting neighborhood character and limiting congestion—common refrains of modern zoning supporters—it banned more affordable housing options such as apartments and tenement housing.

It also banned businesses, such as Chinese laundries, from operating in residential neighborhoods. While not the stated goal, this rule conveniently kept Chinese immigrants away from more prosperous natives since at the time most people lived close to their job so they could walk to work.

These two ideas—prioritizing detached single-family homes and banning most businesses from residential neighborhoods—became pillars of modern zoning ordinances that continue to promote income and racial segregation.

Gray’s account of the federal government’s role in promoting local zoning is particularly insightful. In 1923, only 218 municipalities had zoning ordinances. By 1936, over 1,000 local governments had adopted zoning. Federal officials, such as then secretary of commerce Herbert Hoover, helped drive this rapid expansion of zoning because they wanted a society of widespread homeownership that would restore “national character” and support the building industry.

To further his goals, Hoover assembled the Advisory Committee on City Planning and Zoning. It was composed of several stars of the contemporaneous planning movement, including distinguished landscape architect Frederick Law Olmstead Jr. The committee drafted the Standard Zoning Enabling Act (SZEA), which was model legislation states could adopt that empowered municipalities to create local zoning ordinances. The SZEA was heavily promoted by Hoover and the committee, and by 1930, 35 of the then 48 states had implemented legislation, often modeled on the SZEA, that allowed local governments to implement zoning. Later, the federal government further encouraged zoning by making zoning ordinances a condition for Federal Housing Administration assistance and other federal grants and loans.

The high costs of zoning

Part two of the book explains four problems caused by zoning. First, zoning increases housing costs. As Gray explains, zoning rules that limit housing density such as minimum lot sizes, restrictions on multifamily housing, height limits, and minimum parking requirements all reduce the supply of housing. When the supply of housing is unable to keep up with demand, prices go up. In a nutshell, this is what is happening in every expensive neighborhood in every expensive city in the country.

The second cost Gray discusses is the negative impact zoning has on national economic growth. When people are unable to move to cities with more job opportunities and higher wages the entire country suffers. We lose out on the goods and services people would produce if they could afford to move, and by trapping people in places with lower wages and fewer opportunities, we inevitably end up spending more money on social safety net programs.

Next, Gray describes how zoning encourages segregation. Early zoning codes contained explicitly racial language, but after the courts ruled such language was illegal, the explicit racial restrictions were replaced with other restrictions that largely achieved the same result. Zoning rules that restrict or prohibit construction of cheaper apartments, duplexes, or triplexes and instead require people to purchase single-family homes on large lots prevent lower-income people from purchasing housing in many neighborhoods. Since blacks, Hispanics, and other minority groups had—and still have—lower incomes than whites on average, these rules resulted in widespread racial and income segregation that exists to this day.

Finally, zoning encourages sprawl which hurts the environment. Gray recounts a story on this point from his planning days. A developer proposed a project to turn an old hospital building into an apartment building with medical office space on the first floor and roughly 140 income-restricted units along with 220 market-rate units. The site was close to transit, so many people could live in the building without requiring a car. As Gray writes, “From a planning perspective, it was a slam dunk.” Still, some locals used the re-zoning process to adamantly oppose the project, arguing that the new development would harm the environment.

The idea that growth is bad for the environment is common among opponents of more development, but as Gray explains, denser development is better for the environment. It makes it easier for people to walk or bike to places, which reduces the need for a car and the accompanying emissions. Apartments and duplexes also require less energy to heat and cool than detached single-family houses since the units are typically smaller and have fewer walls exposed to the outside. Finally, denser development reduces the need for new development on the edge of cities, which means more forests, parks, and open space.

How to abolish zoning

After explaining the significant costs of zoning, Gray returns to his main argument—the need to abolish zoning. To show that abolishing zoning will not lead to disaster, Gray turns to Houston, the only big city in America that does not have traditional zoning.

As Gray explains, land use in Houston largely follows the pattern seen in other cities—businesses are on arterial roads, houses are in quieter residential neighborhoods, apartments are often in mixed-use neighborhoods, and heavy industrial uses are far from residential areas. This is because the price system naturally allocates scarce land in Houston, doing the job of other cities’ planning departments but without the adverse side effects. As a result, Houston is just as livable as zoned cities but cheaper, since without zoning restrictions the supply of housing can keep up with demand.

Gray suggests two steps other cities can take to be more like Houston. First, municipalities should require that zoning ordinances be regularly approved by a supermajority in an election-year referendum. Houston residents voted on zoning three times—in 1948, 1962, and 1993—and each time they rejected it. If other cities allowed residents to vote on zoning, we may see equivalent results elsewhere.

Homeowners worried about property values and local officials who need their votes may be reluctant to implement a voting requirement on their own, but since state governments ultimately control what local governments are allowed to do, a state law that requires regular zoning referenda can appropriately force their hand. Throughout the book, Gray supports state preemption of local zoning rules to overcome local NIMBYism and a state referenda rule is an example of this.

The second step is to create a process that allows the most adamant zoning advocates to implement zoning-like rules in their immediate neighborhood. Houston did this, allowing areas to opt-in to stricter rules based on a vote of the affected property owners. Creating an option for more neighborhood control can appease the residents who favor zoning while preventing them from imposing their preferences on the entire city.

Life after zoning

So, what does city planning look like without zoning? Gray offers a few ideas.

Unburdened by zoning enforcement, planners should focus on alleviating actual externalities. Noise, pollution, and congestion are real problems in cities, but zoning is not the only or best way to address them. Setting standards for various externalities, e.g., noise rules, does not require traditional zoning. Planners and police can enforce the standards while tort law and mediation services can adjudicate disputes between neighbors when necessary. Along with code enforcement, Gray suggests that planners should play a part in the mediation process.

The elimination of zoning will also give planners more time to work on actual city planning—laying out street grids, ensuring there is space for parks, and determining where schools and other public facilities should be located to accommodate future growth. To make sure their planning is working, Gray suggests planners should collect and analyze more data, such as commute times, air quality, and housing prices. Can people get to their jobs in a reasonable amount of time? Can people afford to move to the city? These questions should occupy a planner’s time, not whether an apartment building can have two stories or three or whether a laundromat is an approved use of commercial space.

Conclusion

Overall, Gray’s book is an excellent addition to the literature on housing and land-use regulations. He clearly diagnoses the problems caused by zoning and offers sensible solutions to improve the way American cities use land. His experience as a practicing planner strengthens his critiques and recommendations. While I did not agree with everything—his proposals to maintain housing affordability in gentrifying areas involve too much government meddling for my taste—the book’s main argument is convincing: Instead of improving cities, zoning is largely used by established residents to exclude newcomers. Gray is right, we should abolish zoning. Hopefully, this idea gains traction in cities across the country.