Exclusionary Zoning

Ostensibly, zoning is a mechanism that is used to separate incompatible land uses from each other. For example, it permits heavy industry in one area of land so as to protect housing from the harmful effects of the industry. Zoning in the USA has become very ornate, far beyond anything necessary to separate incompatible land uses. Housing in particular is separated by fairly minor density gradients. It is commonplace to have one zone to permit only homes with single, unattached buildings and another zone to permit only two-family dwellings. These zoning laws have been augmented by a variety of building and housing codes that set minimum standards of lot size, dwelling size and even building materials. For example, some communities require minimum lot sizes in excess of a one-half acre per dwelling unit and dwelling sizes in excess of 2000 square feet. Many of these communities require such amenities as wood roof shingles and wood siding.

All of these requirements are justified locally as serving the welfare of the community. Yet is hard to believe that this justification could stand up to any close scrutiny because clearly it is possible for families to live and thrive in housing located on smaller lots, in homes of smaller size and with construction materials that are more modest.

The probable purpose of these zoning and building code requirements is social exclusion. The regulations are designed to force the minimum price of the home in a jurisdiction higher than it would be in a competitive marketplace. By setting the entry level price of a home high, the community prevents entry by the poor. The price exclusion can go beyond just preventing entry by the poor; it can ensure that the only households who can make entry into the community, are as rich as the typical resident of the community.

This income separation is referred to as Tiebout Stratification. The theory, first formalised by Charles Tiebout (1956), describes communities in a metropolitan area as a set of clubs with members voting with their feet by locating where their services needs are best met within their income constraints (Tiebout 1956; Schill and Wachter 1995). But the income separation goes beyond just stratification by income; it carries over into race and ethnicity. The US labour markets suffer from a great deal of discrimination against members of racial and ethnic minorities. Given that these minorities end up with lower incomes, exclusionary zoning not only stratifies communities by income levels, it also separates populations by race and ethnicity. This system forces the poor and minorities into those communities that do not exclude because of a low price level on its housing and a low quality of public services.

By living out of a jurisdiction with many poor people, the rich could reside in communities serving only their own needs, allowing them to tax themselves very lightly while being able to provide a very high quality of public services with these public revenues. This system would be unstable in an open marketplace with free movement from one jurisdiction to another. In an open marketplace, poor people would see the lower taxes and higher quality of public services in the suburban community and attempt to move into that community. This movement would raise the cost of services in the suburban community as the poor would place higher demands upon the public services. Thus, the rich need a mechanism that inhibits such movement of people into the jurisdiction. Rigid zoning requirements—preventing the multi-family dwellings which typically accommodate lower-income renters—and mandating large minimum lot sizes and generous building setbacks—became a default mechanism for excluding lower-income and minority groups from these neighbourhoods (Fischel 2004).

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