What would happen if the Supreme Court addresses inclusionary zoning?

A legal case involving zoning in Marin County, California may make it to the Supreme Court.

Back in May, authorities in Marin entered into a new voluntary compliance agreement with the U.S. Department of Housing and Urban Development to build new low-income housing outside areas where black or brown residents make up the majority. This is now the county’s second big push since 2010 to satisfy the government’s demand that it work on desegregating its affordable housing.

Fair housing is a challenge for Marin, an enclave of million-dollar bungalows across the Golden Gate Bridge from San Francisco. According to a nonprofit project called Race Counts, it has the highest racial disparities of any county in California. That’s in part because Marin County doesn’t want to build any housing. Homeowners here are at the forefront of NIMBY efforts to stop plans for new construction, whether they’re local, regional, or statewide.

The county’s iron grip on its land is the backdrop for a case that may soon appear before the U.S. Supreme Court. Back in 2000, two Marin County property owners, Dartmond and Esther Cherk, looked to split their undeveloped land into two single-family-zoned lots. As developers, they were liable to preserve some part of the property for affordable housing or pay into a low-income housing production fund. The fee was nearly $40,000; the Cherks sued.

The Marin County case may test the constitutionality of inclusionary zoning, a tool that local jurisdictions rely on to expand the supply of affordable housing, especially in tight housing markets. The court has expressed an interest in the case, which the justices may wind up using as a wedge to reshape property rights. It’s possible the inclusionary zoning ordinances—and local regulations more broadly construed—will not stand under the court’s scrutiny.

I’m on the record suggesting the Supreme Court would approve inclusionary zoning. While this piece suggests conservatives on the court might be spoiling to affirm property rights, the courts more broadly have helped develop plans to promote more affordable housing (think the Gautreaux case in Chicago or the Mount Laurel decision in New Jersey). Earlier decisions did not eviscerate property rights but they did suggest that the responsibility for housing was wider than a single community and its zoning. Additionally, having developers pay a fee into an affordable housing fund or provide some units of affordable housing as part of the larger project is common practice across American communities.

Beyond just the actions of Marin County and its own housing supply and population composition, the bigger issue is this: if a community or township or county restricts development and/or housing, it puts a bigger burden on other municipalities in the same metropolitan region to provide housing. And if many municipalities refuse certain kinds of development, more affordable housing ends up in a limited number of places that are (1) not necessarily located near jobs and (2) relatively lower-class. Housing is an issue best tackled by a whole metropolitan area (as are other issues including mass transit and transportation). More dispersed outcomes would likely lead to better outcomes across the region with the biggest loss being the communities that cannot easily remain as exclusive as they would like.

 

Zoning for single-family homes contributes to California’s housing issues

If a lot of individual communities zone largely for single-family homes, it can add up to larger housing problems:

At its heart, California’s housing problem is one of scarcity: According to one analysis, the state has 3.5 million fewer homes than it needs to house all the people who live there. That gap was created over decades — largely as a result of the zoning policies of individual communities, under pressure from local residents. Randy Shaw, a longtime Bay Area housing advocate and author of the book Generation Priced Out, says the best way to describe the dynamics at play is to look at the city of Atherton. Thirty minutes from San Jose, Atherton is the most expensive city in the country: The median price of a home there is $8.1 million.

“You can’t build an apartment building in Atherton,” Shaw says. City code prohibits anything other than a single-unit building with a footprint that cannot exceed 18 percent of the land. In other words, everything but a single, detached home with a yard is verboten. “You have all of these cities in California where you can’t build anything but a luxury home,” Shaw says. “When you have zoning restrictions that prevent you from building the housing you need, you’re pretty much guaranteed to get in the situation we have.”

It’s a problem lawmakers across the state are grappling with, including in San Jose, where 94 percent of the city is zoned for single-family homes. “You got lots of family housing, and you’re not going to bulldoze it to go build apartments,” Liccardo said at a meeting of the state’s mayors in July. “At least, not if you don’t want [homeowners] to burn down City Hall.”…

At the start of the legislative session this past January, the housing committee introduced a slate of bills focused on streamlining approvals for new construction, protecting renters, funding affordable housing, and, most controversially, reforming zoning laws. Wiener’s top priority was SB50, an ambitious proposal that would prohibit cities from having zoning laws like Atherton’s. Residential neighborhoods historically reserved for single-family homes would be opened up to multi-unit housing like triplexes and fourplexes. And even higher-density construction would be allowed around transit corridors and “job-rich” enclaves.

With suburban preferences for single-family homes, exclusion, and local control, providing cheaper housing at a state level is going to be a tough sell. As I have asked before, what incentive do wealthier homeowners have to change the rules that let them live with people like them? But, if California can find some path through this all that actually makes an impact – and it will likely take quite a while before significant change could be noted – then it could provide a helpful template for other American locations that suffer from similar problems.

Three thoughts on the finding that 7.5% of housing in Naperville is affordable

Naperville is a large – over 140,000 residents – and wealth – a median household income of just over $114,000 – suburb. It also does not have much affordable housing:

A state agency recently faulted Naperville as the only Illinois community of 50,000 or more lacking affordable housing, which, according to the federal government, means housing costs make up no more than 30% of a household’s income. In a report last year, the Illinois Housing Development Authority found just 7.5% of Naperville homes are considered affordable based on the regional median income, among the lowest percentages in the state.

Some elected officials fear Naperville’s high housing costs could drive out seniors and push away recent college graduates and middle-class professionals. As those city leaders consider a slew of new developments, they and housing advocates are debating how and whether to include affordable units that could bring in new residents and help people such as Melekhova stay…

Efforts to include affordable housing in Naperville developments have been met with some resistance. Residents have questioned the effects affordable units would have on their neighborhood and whether the look of buildings with affordable units would fit the character of the area.

One question submitted on a note card during a panel on affordable housing in May was more pointed: “What steps can landlords utilize to minimize the potential negative impacts of the associated tenants utilizing affordable housing?”

Based on my research on suburbs and Naperville, three quick thoughts:

  1. Naperville enjoys being a wealthy suburb. It has a really low poverty rate for a city its size. It has lots of white-collar jobs. While this tends to be put in terms of having a high quality of life, nice amenities, and good schools, there is clearly wealth.
  2. There is not a lot of affordable housing because that is not the kind of housing Naperville prioritized for the last fifty years. As the suburb really started to grow in land area and population in the 1960s, there were public discussions about building apartments. This is not what won out in the long run and the community approved subdivision after subdivision of nicer single-family homes. (See my 2013 article that details some of this.)
  3. More recent discussions and the comments highlighted in the article are common ones in suburban debates over affordable housing. When suburbs discuss affordable housing, they often are thinking of people that would desire in the community such as younger adults and retirees. They are not explicitly seeking out poorer residents. Such concerns can be put in different terms – privileging “quality” development or protecting the “character” of neighborhoods – but they often do not address housing for the many Americans working in lower-paying jobs. And there may be some support for affordable housing units but it is harder to find the suburban homeowners who want to live near those units.

All that said, truly addressing the issue of affordable housing requires more effort than adding a few units spread throughout the large suburb. A larger discussion about what kind of housing the community desires and what kind of residents it wants would have to take place before the number of affordable housing units would truly jump.

Affordable housing, homelessness, and a political void

Homelessness in Los Angeles and other high cost cities may be just the tip of the iceberg of a larger housing issue in the United States that gets little political attention:

“To say it’s been a real wake-up call would be putting it mildly,” says Raphael Sonenshein, the director of the Pat Brown Institute for Public Affairs at California State University’s L.A. campus. “It continues to be the No. 1 issue voters keep pointing to. This is going to be the issue of our time for the next few years out here. I think it’s going to dominate the rest of the mayor’s administration.”

Homelessness is by no means a problem unique to Los Angeles, of course. It’s a national crisis of varying degrees in cities from San Francisco to Boston, and one that officials at all levels of government seem hard-pressed to know how to address. Ahead of the first presidential-primary debates, the issue has barely registered, if at all, on the 2020 campaign trail, even as the bursting field of Democratic contenders issues policy proposals to address a wide range of other social and economic problems. But the candidate’s may be forced to confront the issue before long if the crisis continues to spread across the country…

California’s problem may be especially acute, but the lack of affordable housing, like homelessness, is a widespread problem in a national economy where income inequality has grown steadily for years. Yet of the leading presidential candidates, perhaps only Elizabeth Warren has outlined a detailed national plan to address the lack of affordable housing. She has proposed a program that would encourage states and localities to drop restrictive zoning laws that limit multiple dwellings and drive up housing costs in exchange for grants that could finance parks, roads, and schools. Her plan is comparable to a state proposal floated by California’s new Democratic governor, Gavin Newsom.

One major problem is widespread public opposition to greater density; a city like Los Angeles epitomizes urban sprawl, but it also enshrines the ideal of a backyard swimming pool and garden. The California state Senate recently shelved a bill that would have allowed the overriding of local zoning laws to permit construction of mid-rise apartment buildings near transit hubs and employment centers, even in neighborhoods currently limited to single-family homes. The bill fell victim to intense opposition from local neighborhood groups and some progressives, who feared it would benefit developers but not create more affordable housing. A study published in February by researchers at UCLA found that Newsom’s goal of 3.5 million new homes by 2025 is unrealistic because no more than 2.8 million could be built under current zoning laws.

I have argued before there is little appetite for a national discussion about affordable housing. To some degree, housing issues are related to numerous issues at stake in the 2020 elections including economic concerns, matters of justice and inequality, and providing opportunities to all Americans. However, it is difficult to make the argument that housing is behind all of these other concerns. I think this case could be made: where people live has many consequences in life.

I’m guessing housing issues will continue to mainly be local issues for a long time. It is unclear whether even state-level solutions can make sizable dents in these issues or how many states would have an appetite for sweeping policies that would affect all municipalities.

If there is limited movement on or even discussion of affordable housing across the United States, could this mean any progress in other areas will be limited?

 

 

Housing as the ultimate marker of poorly functioning (free) markets

Alexis Madrigal considers generational access to housing and the high real estate prices in some markets:

There are obviously many reasons that coastal housing markets have gone so bonkers. But it is an ironic twist that residential property, which once served as the bedrock for American capitalism, has become the most obvious sign for young people that something is deeply wrong with the markets.

What exactly has gone “deeply wrong” with these housing markets? Madrigal lays out a number of factors. But, I wonder if we could extend the analysis a bit further from “housing markets” to “economic markets” more broadly. Here is what two opposing sides might say:

One side: these housing markets with high prices have never truly been free. For decades, federal policy has privileged single-family homes. Local policies have made particular choices, often toward protecting property values and limiting density. Open up these markets to true competition. If affordable housing is needed, limit regulations and let all the money of potential buyers drive new development.

The other side: housing markets have not been regulated enough. The federal and local policies have tended to privilege certain actors – like the white middle-class and connected developers – over the needs of many working-class and poor residents as well as non-white residents. Policies aimed at providing more housing for all need more teeth and the ability to compel protected wealthier residents to accept development near their own homes.

As a sociologist who has studied this for over a decade, I tend to side with the latter argument: (1) markets are rarely ever completely and free and (2) the scales have been tipped toward whiter and wealthier residents for a long time. Perhaps the true lesson of these high-priced housing markets is that calls for regulation and oversight only go so far when property values and who neighbors are is truly at stake.

Five forces behind the American affordable housing problem

Affordable housing is not an easy issue to address and one overview provides five factors at play:

Baby boomers—those aged 55 or older—are living longer and more independently than previous generations. They’re also more likely than previous generations to be divorced and living alone. This means less housing stock has been freed up by elderly people dying or moving into assisted-living facilities. In some cases, boomer homeowners are looking to trade down and compete for entry-level homes with other generations, putting upward pressure on prices on homes in the lowest price tier…

While subsequent administrations have swung the agency’s priorities between promoting homeownership programs and assisting poor renters by offering housing subsidies, the federal government consistently subsidizes middle- and upper-middle-class homeowners rather than low-income renters, seniors, and the disabled…

Restrictive zoning codes are often an effective tool in the fight against new construction and, frequently, densification, helping to suppress housing supply even as demand rises. Whether by limiting the height of new buildings or deciding that large apartment buildings need a minimum number of parking spots, these restrictions make construction more difficult and more expensive. California cities like Los Angeles and San Francisco are known for impeding new construction through these methods, which has led to the state’s severe housing shortage

The “affordability” of housing isn’t all about the housing itself: As rising rents and home prices push low- and middle-income households farther from major urban centers—where the greatest number of jobs and the most robust public transit systems tend to be—lower housing costs in suburbs and exurbs get offset by increased spending on transportation.

Three quick thoughts:

  1. As an academic, I am sympathetic with arguments such as this that try to explain a social problem with more complexity and nuance. Short answer for a typical academic answer to a social issue: it’s complicated. As a person who wants affordable housing to be addressed, I want solutions sooner rather than later.
  2. One advantage of the complexity/nuanced argument is to highlight that whole systems are at play. Making serious headway with one or two factor may not move the needle. All the issues need to be addressed and everyone needs to keep in mind their connected nature. To put it differently, this requires large-scale societal change, not just piece-meal approaches. There are a variety of social levels and actors involved and they should aim to work toward common goals. It is often hard to think in this structural or system way but necessary when tackling large problems.
  3. I wonder how helpful it would be to cite successful models or places, even if they are relatively small communities. Even if systems need to be addressed, it can be hard to tackle everything at once without some hope that the goal can be reached. Are there cities/municipalities/states/regions that have some answers that can be adopted elsewhere

The suburban way of life is not the result of free markets

Even as Americans have exercised some agency in choosing to live in suburbs, the whole system cannot truly be described as being the result of free market activity:

I get the concern and rarely disagree with Shelley, but there’s nothing free market about current single-family zoning rules. The suburban landscape largely is a creation of subsidies and zoning rules, which mandate only one house per certain size of lot and require umpteen parking spaces for every new shopping center, restaurant, office and church. Everything is micromanaged in the planning department.

I’m on the building committee of our church and have closely examined many proposed construction projects. It is so hard to build, expand or try any new development ideas because these planning edicts—designed mainly to protect our suburban way of life, and backed by residents trying to bolster their property values—are costly and inflexible…

But the underlying debate is about two visions of our California landscape. One side wants to protect our suburban model and the other side wants to urbanize. It’s a false choice driven by their own personal preferences. We need more apartments and condos. We need more single-family neighborhoods. We need to allow builders to provide the housing products people want, and different people want different things. The same people want different things at different stages of their lives. I live on an acreage, but now that we’re empty nesters, my wife and I plan to move into the city. That’s why I’m squarely on neither side.

After my housing column last week, I’ve heard from readers who oppose the legislation. Frankly, I’m frustrated by some of their arguments. To summarize some comments: If you can’t afford to live around here, then maybe move someplace else. There are too many people here already and too much traffic congestion. If your kids can’t afford California, they should consider less-costly states. Such views transcend political affiliation.

Zoning is a good example of how regulations can dictate what communities can construct and then who can reside or work in such locations.

Add two other other less-than-free-market aspects of suburbia:

1. A legacy of racial and class discrimination in suburbs.

2. Government subsidies for highways and other local services as well as propping up suburban housing in the form of single-family homes.

Americans might not acknowledge the ways suburbs developed and may even resist seeing them as social products. But, addressing tough suburban issues such as affordable housing probably requires thinking and acting at more collective levels than letting the beloved local governments dictate what they want (which can often deliberately lead to exclusion).