Capitalization and Exclusionary Zoning
- 9 Downloads
For decades, land use experts have wrestled with the problem of exclusionary zoning. Traditionally, the phenomenon has been characterized primarily by suburban communities using large-lot zoning and other density controls to reduce supply and drive up the cost of housing. Increasingly, however, zoning is blamed for the affordability crisis in many thriving cities. Some of the conventional legal tools for recognizing and responding to exclusionary zoning do not apply as well in cities, where minimum lot sizes and bans on multi-family housing are not the primary source of density limits. This chapter therefore provides a new lens for identifying exclusionary zoning, one that focuses on the economic effects instead of any particular characteristic. In particular, the chapter looks at the extent to which the economic values of public services like high-quality public schools are capitalized into property values. In the absence of supply restrictions, developers should satisfy consumer demand and compete away any premium associated with public services. Zoning, however, changes that dynamic, allowing services to be capitalized into property values. Affluent communities are not just exclusionary because they are expensive; they are expensive in part because they are exclusionary.
Thanks to Amnon Lehavi for his support, to Ronit Levine-Schnur for her careful comments, to participants at the 2018 Progressive Property Conference for their comments, and to Vid Sankar and Deborah Schander for their research assistance.
- Barseghyan, L., & Coate, S. (2016). Property taxation, zoning, and efficiency in a dynamic Tiebout model. American Economic Journal: Economic Policy, 8(3), 1–38.Google Scholar
- Been, V., Ellen, I., & O’Regan, K. (2017). Supply skepticism: Housing supply and affordability. Manuscript in preparation.Google Scholar
- Eagle, S. J. (2017). Affordable housing as metaphor. Fordham Urban Law Journal, 44(2), 301–359.Google Scholar
- Ellickson, R. C. (1981). The irony of inclusionary zoning. Southern California Law Review, 54(6), 1167–1216.Google Scholar
- Euclid v. Ambler Realty, 272 U.S. 365. (1926).Google Scholar
- Fischel, W. A. (2005). The homevoter hypothesis: How home values influence local government taxation, school finance, and land use policies. Cambridge MA: Harvard University Press.Google Scholar
- Furman, J. (2015, November). Barriers to shared growth: The case of land use regulation and economic rents. Remarks presented at the Urban Institute, Washington, DC. Retrieved from https://obamawhitehouse.archives.gov/sites/default/files/page/files/20151120_barriers_shared_growth_land_use_regulation_and_economic_rents.pdf.
- Ganong, P., & Shoag, D. (2017). Why has regional income convergence in the U.S. declined? Journal of Urban Economics, 102, 76--90Google Scholar
- Gillette, C. P. (2011). Local redistribution and local democracy: Interest groups and the courts. New Haven, CT: Yale University Press.Google Scholar
- Gyourka, J., & Malloy, R. (2015). Regulation and housing supply. In G. Duranton, V. Henderson, & W. Strange (Eds.), Handbook of regional and urban economics (Vol. 5B, pp. 1289–1338). Amsterdam: Elsevier.Google Scholar
- Holmes, R. C. (2013). The clash of home rule and affordable housing: The mount Laurel story continues. Connecticut Public Interest Law Journal, 12(2), 325–360.Google Scholar
- Jan, T. (2017, October 23). America’s affordable-housing stock dropped by 60 percent from 2010 to 2016. The Washington Post. Retrieved from https://www.washingtonpost.com/.
- Koschinsky, J., & Talen, E. (2015). Affordable housing and walkable neighborhoods: A national urban analysis. City, 17(2), 13–56.Google Scholar
- Kusisto, L., & Kamp, J. (2015, December 1). Some families earn six figures and still need help with the rent. The Wall Street Journal. Retrieved from https://www.wsj.com/.
- Schleicher, D. (2017). Stuck! The law and economics of residential stagnation. The Yale Law Journal, 127(1), 78–154.Google Scholar
- Serkin, C., & Wellington, L. (2013). Putting exclusionary zoning in its place: Affordable housing and geographical scale. Fordham Urban Law Journal, 40(5), 1667–1695.Google Scholar
- Southern Burlington County N.A.A.C.P. v. Mount Laurel Tp., 67 N.J. 151, 336 A.2d. 713. (1975).Google Scholar
- Span, H. A. (2001). How the courts should fight exclusionary zoning. Seton Hall Law Review, 32(1), 1–107.Google Scholar
- Strahilevitz, L. (2003). Exclusionary amenities in residential communities. Virginia Law Review, 92, 439–498.Google Scholar