Dividing Lines: Understanding the tradeoffs in modern zoning and its impact on communities

Zoning has long been a tool used to shape the physical and social landscape of U.S. cities. At its core, zoning refers to municipal or local laws that dictate what types of buildings—whether residential, commercial, or industrial—can be constructed in specific areas. While this form of urban planning exists around the world, the United States stands out for its heavy reliance on low-density residential zoning, which primarily restricts areas to single-family homes. However, as zoning laws evolved, they began to serve other purposes, creating barriers that limit housing availability and exclude certain groups from high-opportunity areas.

Although zoning is often framed today as a tool for protecting communities from harmful industrial encroachment, its early origins were rooted more in maintaining social order, property values, and segregation by class and race. Early zoning laws, such as New York City’s 1916 Zoning Resolution, were designed primarily to control building heights and separate commercial activities from residential areas. While zoning laws later began to incorporate health and environmental considerations by separating residential areas from factories, highways, and waste sites, their initial intent was largely focused on economic and social control, with a significant impact on who had access to desirable neighborhoods. However, these regulations have evolved, shaping not only the physical landscape of cities but also reinforcing social and economic divides. Understanding the tradeoffs of modern zoning requires an examination of both its protective benefits and its role in perpetuating inequality and limiting opportunities for many, particularly low-income and marginalized communities.

In the early 20^th century, racial zoning explicitly separated Black and white communities. Even after the Supreme Court ruled in Buchanan v. Warley (1917) that racial zoning was unconstitutional, many municipalities implemented facially neutral laws like single-family zoning that effectively excluded lower-income families from wealthier areas. These laws ensured that certain neighborhoods remained exclusive by setting prohibitive standards for the type and density of housing allowed. As a result, communities that were once segregated by race were now segregated by income, limiting access to better schools, jobs, and public services for lower-income and minority residents.

While the explicit racial component of zoning has faded, its legacy lives on in the way zoning laws still disproportionately impact racial minorities and low-income communities. Exclusionary zoning—especially single-family zoning—restricts the types of homes that can be built, like multi-family housing or affordable apartment complexes, which limits the housing supply and drives up costs. This doesn’t just worsen the housing crisis and keep people from moving into high-opportunity neighborhoods; it also holds back the broader economy. Exclusionary zoning hampers workforce mobility, making it harder for people to relocate for better jobs, which stifles innovation and adaptability. It even affects environmental sustainability by pushing housing further from city centers, leading to more sprawl, car dependence, and pollution. If we want a thriving economy that truly supports people from all walks of life, we need to rethink zoning policies that limit affordable housing options and restrict who gets access to opportunity.

Exclusionary zoning also raises important constitutional concerns. The takings clause of the Fifth Amendment states that when the government takes private property for public use, it must provide just compensation. However, the courts have not generally interpreted it this way. In the 1926 case Village of Euclid v. Ambler Realty Co., the Supreme Court ruled that zoning is a valid use of government power, meaning most zoning laws are not considered a “‘taking‘” under the Fifth Amendment. This decision effectively shielded exclusionary zoning from constitutional challenges related to property rights and compensation. Some legal scholars argue that exclusionary zoning, by severely limiting how property owners can use their land, constitutes a form of regulatory taking. These restrictions not only reduce property values but also infringe on the right to use and enjoy property, a fundamental principle of property law that dates back to the founding of the United States. Property owners are often left without compensation for the reduced value and restricted use of their land due to zoning regulations, raising questions about the constitutionality of such laws.

The Supreme Court’s ruling in Euclid, which upheld zoning as a valid exercise of police power, allowed municipalities to continue using zoning laws to regulate land use. However, the ruling has faced increasing scrutiny for enabling local governments to impose regulations that exclude low-income and minority families from certain neighborhoods. Critics argue that Euclid not only empowered local governments to classify land by its use but also entrenched socioeconomic divides by making housing unaffordable in desirable areas.

The economic implications of exclusionary zoning are vast. Economists Gilles Duranton and Diego Puga found that eliminating zoning restrictions in major urban areas could increase the U.S.’s GDP by nearly 8%, largely by allowing people to move to areas where they would be more productive. Zoning restrictions limit mobility, preventing individuals from accessing better jobs and educational opportunities. Zoning laws that limit the density and type of housing in a given area can also drive up housing prices, effectively pricing out many lower-income families from accessing affordable housing.

Although public meetings play a central role in determining zoning policies and housing development decisions, they aren’t always effective in addressing the broader needs of communities. These meetings often allow outside actors, business stakeholders, and activists with specific agendas to dominate the conversation, excluding the very communities most affected by zoning restrictions. In practice, these meetings are typically attended by well-established homeowners and residents with vested interests in maintaining the status quo, which can exacerbate inequalities, especially among communities of color. For instance, a study in Boston revealed that 95% of participants at public meetings were white, despite the city’s diverse population, and a majority of comments opposed new housing developments—reflecting the interests of those who may wish to keep lower-income and minority families out of their neighborhoods. Opposition often stems from those living near proposed projects, amplifying “Not In My Backyard” sentiments that hinder inclusive development and sometimes delay project approvals even when official recommendations are positive. 

A better approach would be to establish clearer property rights and limit the scope of local government intervention in routine housing decisions. By defining what types of property developments are allowed “by right,” we could reduce the number of minor projects subjected to these meetings, reserving public hearings only for proposals that significantly impact neighboring properties. While public meetings may be intended as a democratic tool, they often disadvantage renters, low-income individuals, and people of color, as they’re held at inconvenient times and lack accommodations for those with transportation or childcare needs. By default, zoning policies become shaped by a narrow subset of the population, perpetuating a cycle where more privileged groups influence decisions that disproportionately harm marginalized communities.

Beyond limiting access to housing, zoning laws have also contributed to environmental injustices. Low-income communities and neighborhoods of color are often targeted as sites for hazardous waste facilities, landfills, and other polluting industries. Zoning laws regulating industrial and residential uses have historically placed these harmful developments in poorer areas, while wealthier communities are largely shielded from these hazards. This has led to higher rates of pollution and health problems in low-income areas, perpetuating environmental racism and contributing to long-term health disparities.

While zoning was originally intended to protect communities from industrial encroachment, its unequal application has created toxic environments in some neighborhoods while safeguarding others. For example, in Cancer Alley, Louisiana, petrochemical plants were established in predominantly Black communities, exploiting these areas due to perceived lower political resistance. Over time, lower property values in such areas have attracted more low-income residents, including other marginalized groups, further embedding these communities within high-risk, polluted environments. The combined impact of living near such facilities, with limited access to healthcare and services, has only deepened the disparities faced by these communities.

The modern complexity of zoning lies in its dual role: on one hand, it protects communities from harmful industrial encroachment, but on the other, it limits access to affordable housing and perpetuates segregation. This creates a challenging dilemma for urban planners and policymakers. How do we balance the need to protect communities while ensuring equitable access to housing and opportunity?

The constitutional implications of exclusionary zoning should not be ignored. By restricting property owners‘’ ability to develop their land and denying affordable housing to those who need it most, zoning laws may infringe upon property rights protected by the Fifth Amendment’s takings clause. At the same time, reforming zoning laws too hastily could leave communities vulnerable to unchecked development and environmental degradation.

The solution lies in reforming zoning laws to strike a balance between protecting communities from harmful developments and ensuring that all residents—regardless of income—have access to affordable housing and opportunity. This might involve loosening zoning restrictions in wealthier areas to allow for more multi-family and affordable housing, ensuring that enough housing is built in desirable areas so that costs stay low, and even making it possible for low-income residents to live farther from industrial zones. Allowing more density in many, though not all, parts of town, including clusters of rental apartments in suburban neighborhoods, could further increase affordable options while still preserving the character of different areas.

The challenge for policymakers and urban planners is finding the right balance: protecting communities’ health and safety while also making space for economic growth and housing opportunities that work for everyone, no matter their income or background. Housing supply must meet demand, and zoning must avoid uses that could disrupt communities. Public meetings are a key part of this, but they need to be structured so that a handful of activists don’t speak louder than the larger community.

This means that planners and local officials have to be mindful of the people who don’t show up to these meetings—often those who are low-income, renters, or people of color, who feel the impact of restrictive zoning the most. We need a clear system of property rights that lays out what can be done “by right” without needing a public meeting, so those meetings can be reserved for projects that really impact the neighborhood.

It’s time for urban planners, policymakers, and community organizations to step up and create a fair and practical zoning system. Instead of sticking with outdated, restrictive policies, we need to make changes that reflect the real needs of all our communities. Only then can we start building neighborhoods where everyone has a fair shot at opportunity and stability and where zoning isn’t a barrier to growth but a tool for a more inclusive future.

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Source: https://reason.org/commentary/dividing-lines-understanding-the-tradeoffs-in-modern-zoning-and-its-impact-on-communities/