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Commentary By Salim Furth

A Brief History of Zoning in America—and Why We Need a More Flexible Approach

In a broad executive order signed on June 25th, President Donald Trump instructed his administration to find ways to remove regulations that are barriers to affordable housing, and convened an intramural council chaired by Secretary of Housing and Urban Development Ben Carson to lead the research process.

“These regulatory barriers,” the president said—which include “rent controls; cumbersome building and rehabilitation codes; excessive energy and water efficiency mandates; unreasonable maximum-density allowances… and overly burdensome wetland or environmental regulations”—“increase the costs associated with development” and “are the leading factor in the growth of housing prices.”

Yet, as the president, a real-estate developer turned politician, must understand, Washington has very little authority within American federalism to reform zoning. With Secretary Carson’s guidance, the president’s Council on Eliminating Regulatory Barriers to Affordable Housing will be able to tweak some federal regulations, but it will have to rely on the power of persuasion to make a real impact on the way America’s cities and states implement their zoning codes.

As Seymour Toll explained in his 1969 book Zoned America, zoning ordinances were the brainchild of a handful of early 20th century New York businessmen whose high-fashion shops had recently displaced mansions along the middle section of Fifth Avenue. By 1916, they were at risk of being similarly crowded out by their own suppliers—garment manufacturers whose numerous employees ruined the exclusive Fifth Avenue shopping experience. The city’s zoning code that went into effect that year proved capable of slowing the rotation of uses and classes—and was immediately copied by cities around the U.S.

Since such far-reaching land use regulation was not, however, a traditional power of local government, questions arose in state and federal courts. State courts permitted most zoning, but the Supreme Court had not yet ruled on the matter. Questions abounded: How far could localities go? To clarify their newfound powers, several states passed “zoning enabling acts,” which explicitly gave broad regulatory powers to their municipalities.

In 1924, then-Secretary of Commerce Herbert Hoover, an enthusiastic technocrat at the time who was out of step with President Calvin Coolidge’s laissez-faire philosophy, saw government planning as a clear improvement over free-market urban development. Thus, he convened a panel of zoning experts to write a Standardized State Zoning Enabling Act (SZEA) that states could copy.

Secretary Hoover proudly led the nation’s cities and towns toward central planning, announcing that “The importance of this standard State zoning enabling act cannot well be overemphasized.” The Government Printing Office published it and sold 55,000 copies (for a nickel each) in the first two years. Nineteen states had used the standard act as a model for their own legislation by 1925.

In the intervening century, zoning has grown to be far more intrusive than the brief 1920s codes that Hoover could, with a straight face, call “reasonable neighborly agreements as to the use of land.” Even then, zoning was not so neighborly toward renters. In 1926, Supreme Court Justice George Sutherland wrote in a landmark decision, Village of Euclid v. Ambler Realty Co., that “very often the apartment house is a mere parasite” on a neighborhood.

From the beginning, U.S. zoning has embodied a contradiction: Its stated legal purpose is that cities must be rationally planned to avoid ugly spillovers. Thus, most states require regular comprehensive plans as a precondition to zoning. But its enactment almost always enshrines whatever land use happens to be the first in a specific location. The result is that we have cities and suburbs that are effectively unplanned (for better or worse) but also inflexible.

In the current housing market, zoning is to blame for high housing costs in coastal cities. But taking a century-long and nationwide view, different problems crop up in different markets. The specifics of each city’s regulations ought to change with the market, but the broader system—as defined by a state zoning enabling act—should be flexible enough to accommodate industry or commerce, overcrowding or vacancies, trolleys or self-driving hovercraft. And it ought to serve the public interest broadly.

The system that Hoover’s experts designed in the early 20th century has proven too inflexible and too political. In different times and places, well-connected developers or NIMBY (not in my backyard) neighbors have been able to capture the system for their own gain. And the inflexibility of the code has led jurisdictions as different as Pearland, Texas, and Boston, Mass., to funnel a large share of their growth through the inherently inequitable “planned unit development” process.

Issuing a 95th-anniversary update of the Standard State Zoning Enabling Act would not lead to a stampede of states adopting the newly suggested legislation. But it would help advance a conversation that goes beyond the tactical blocking and tackling of the contemporary YIMBY (yes in my backyard) movement. Criticizing the existing system is easy; imagining a post-zoning regulatory framework that treats people, and their property, fairly is much trickier.

I leave it to others to offer such a framework. But any updates to the Standard State Zoning Enabling Act ought to narrow the set of planning tools available to localities and narrow the purposes for which regulation can be undertaken. There should be clear guidance on when a regulation constitutes a “taking” of private property. And regulations should come with built-in flexibility in some form, so that rules intended to promote the public welfare do not long outlive their value.

The process is easier to envision than the outcome. The “new” Department of Housing and Urban Development is a more natural home for a revised SZEA than the Department of Commerce, and Secretary Carson has the president’s mandate for leadership on land use regulation.

The experts who would advise such an effort ought to exercise a little more humility and show more respect for the value of federalism. Rather than a single new SZEA, the update could include a few different approaches. One reason for the rigidity of the century-old zoning system is that, with federal leadership, a single approach spread nationwide. Innovation and diversity would be better. Even failed policy approaches can have value; when Oregon passed the most ambitious housing deregulation in decades, its stated reason—in the words of the speaker of the state’s House of Representatives—was, “We’re just trying not to become San Francisco.”

Salim Furth, Ph.D., is a Senior Research Fellow at the Mercatus Center at George Mason University and the co-director of its Urbanity Project.

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