Exclusionary zoning? Inclusionary zoning? How about no zoning?
Sometimes the easiest solution is the best solution …
When I cruise back and forth between Wisconsin and South Carolina, which happens often, one of my favorite spots along the way is a stretch of Indiana highway, where a farmer has planted a series of signs to educate passersby. My favorite sign is: Zoning isn’t the solution; zoning is the problem.
Don’t argue with farmers. They know of what they speak. There’s two kinds of zoning, exclusionary and inclusionary, and they both are bad. Exclusionary zoning mostly occurs when rich white liberals try to erect regulatory gates to their neighborhoods, otherwise known as zoning districts, to keep the riffraff out, and do so in the name of environmental protection (as in, we need minimum sized large lot restrictions because smaller lots lead to more building and impervious surfaces, which is false, btw). The end result is higher development costs and a decline in affordability. Hooray for NIMBYs!
As for inclusionary zoning, well, there’s a court case to demonstrate that. As the Pacific Legal Foundation reports, a homeowner in Healdsburg, California, has filed a lawsuit against the city, arguing that its inclusionary zoning fee for new construction violates the law:
Jessica Pilling and her husband want to build a new family home with an accessory dwelling unit on a portion of their property. After subdividing their property, they applied for construction permits, only to be hit with a $20,000 inclusionary zoning fee on top of the usual permitting costs.
As Pacific Legal explains, inclusionary zoning forces developers of residential property to subsidize “affordable” housing, meaning housing for those who can’t afford it, which paradoxically increases development costs for those who can and, logically speaking, drives up the marginal ranks of those who can no longer afford to be in the market. Hooray for YIMBYs!
Bottom line: Both exclusionary zoning and inclusionary zoning drive up development costs. The only difference is who gets excluded and who gets included.
Pacific Legal Foundation points out that the Supreme Court has consistently ruled that permit conditions for new construction must be proportional and directly related to that construction’s negative public impact. In their case, the group states, adding to a city’s housing supply does not negatively impact the cost of housing. According to David Deerson, an attorney at Pacific Legal Foundation:
You can’t make housing more affordable by making it more expensive, but that’s what cities like Healdsburg do when they impose so-called ‘inclusionary fees’ on residential development. Fortunately, the constitution prohibits the government from arbitrarily demanding property or money from developers, whether big firms or families like the Pillings.
The same goes for exacting more costs from property owners in the form of higher fees and standards to meet exclusionary standards. It’s a zoning version of redlining. As Nolan Gray states in his 2022 book Arbitrary Lines: How Zoning Broke the American City and How to Fix It:
Zoning is a fundamentally flawed policy that deserves to be abolished. Set aside for a moment the debilitating local housing shortages, the stunted growth and innovation, the persistent racial and economic segregation, and the ever-expanding sprawl: The very concept of zoning—the idea that state planners can rationally separate land uses and efficiently allocate density—has repeatedly failed to materialize. Far from the fantastical device imagined by early 20th-century planners, zoning today has little to do with managing traditional externalities and works largely untethered from any guiding comprehensive plan.
And that, in a paragraph, is why we should abolish it.