Can't Afford Your Rent? Blame Herbert Hoover.

The feds pushed cities to implement zoning restrictions. High prices and social inequality were the inevitable results.


This article is part of a feature package on how the American Dream became unaffordable for millions of working-class and middle-class Americans. For more on Reason's autopsy of how things veered off track, read "How the American Dream Became Unaffordable" or the other two features in the package, "How Doctors Broke Health Care" and "Student Loans Aren't Working."

At the beginning of the 20th century, there were virtually no zoning laws in the United States. By 1921, zoning had come to 48 large U.S. cities, representing a fifth of the country's population. By 1932, 1,165 municipal governments had adopted zoning, covering more than two-thirds of the urban population. By 1968, nearly every metropolitan government had zoning, as did large swaths of rural America.

It was a revolution, and a rapid one. Property owners were once allowed to use their land for the most profitable or desirable use: live on it, sell it to a commercial or industrial business, sell it to a developer. Now nearly every municipality has rules that dictate how a piece of land can be used and what kinds of housing, if any, are allowed on it.

This wasn't a spontaneous shift: The federal government made a concerted effort to promote the comprehensive regulation of local land use through zoning. That hasn't just meant a decline in Americans' liberties. It has meant sharp increases in the cost of housing and a country much more segregated by class and race.

Zoning arose at a time of rapid urbanization: The percentage of Americans living in urban areas jumped from 14 percent in 1880 to 54 percent in 1920. One source of this swelling was the Great Migration of African Americans out of the South and into Northern cities. Another was the large-scale migration of Eastern and Southern Europeans to the United States: The foreign-born share of American residents peaked at 15 percent around 1920.

This rapid influx rearranged urban politics. As growing ethnic groups organized well-oiled political machines, white Anglo-Saxon Protestants began to lose control over city governments. Many moved to the suburbs and created their own governments there. Others attempted to wrest back control of the cities by imposing new forms of policing power.

That old guard viewed migration and urbanization as chaotic, subversive forces. Native whites worried about competition for jobs, and some affluent Americans of Northern European descent fretted about the incursion of allegedly inferior genes. Social scientists of the era did not, by and large, feel a strong commitment to free markets—a typical scholarly article of the era declared that "large cities are excellent illustrations of the insufficiency of laissez-faire doctrine"—and so educated professionals were generally all too willing to impose new regulations. Enter zoning.

In 1920, native-born whites were much more likely to be homeowners than were immigrants from Eastern and Southern Europe, or Hispanics, or Asians, or African Americans. So zoning laws prioritized the single-family detached home and sought to isolate it from multifamily housing and from commerce. Robert Whitten, an early zoning leader who consulted around the country, was explicit about this. When Atlanta hired him to develop the city's zoning statutes in 1922, Whitten tried to prohibit black people from living in white neighborhoods, even though the U.S. Supreme Court had struck down such laws in 1917.

More broadly, Whitten argued that even one apartment sends a community of single-family homes down a slippery slope of devaluation. His views were influential: He co-authored the New York City Planning Resolution, adopted in 1916, which the 1968 Douglas Commission—a working group charged with reporting to Congress about urban problems—later cited as setting "the basic pattern for zoning ordinances to this day." That law attempted to curb the mixed use of land (combining businesses and residences) practiced by the city's recent immigrants.

Urban historians agree that these local and state efforts were "substantially aided"—as the Douglas Commission put it—by Washington. In fact, the executive and judicial branches of the federal government were crucial to the rise of zoning.

Herbert Hoover led the effort on the executive side. The future president served as secretary of commerce from 1921 to 1929; early in that tenure, in 1922, he released the first version of the Standard State Zoning Enabling Act, a template for state legislatures to allow and promote municipal zoning. In 1926, his department issued A Zoning Primer, which further encouraged and facilitated the adoption of zoning.

On the judicial side, there were serious questions about the constitutionality of the new laws. As mentioned, the U.S. Supreme Court in 1917 had invalidated zoning based on race. In addition, the Court in 1912 had struck down an ordinance in Richmond, Virginia, that prohibited building owners from extending development past a hypothetical line (or setback) some distance in from the edge of their property—this, the justices said, violated property rights. And in 1921, the Texas Supreme Court struck down Dallas' zoning in sweeping terms. Chief Justice Nelson Phillips wrote that "the right of the citizen to use his property as he chooses so long as he harms nobody" is both "an inherent and constitutional right." He concluded from there that "the police power cannot be invoked for the abridgment of a particular use of private property, unless such use reasonably endangers or threatens the public health, the public safety, the public comfort or welfare." For Phillips, such laws were as impermissible as a rule regulating a family's clothes or diet.

But other states supported zoning. In 1924, Massachusetts' highest court approved the town of Brookline's right to halt the construction of a home for two families, after the city council passed a law prohibiting multifamily housing in the area. The justices decided that the restriction met the required standard of relating to public safety, health, or morals, on the grounds that single-family zoning increases fresh air, gives children and adults room to play and move, allows for the cultivation of land, and provides safety from infectious disease.

The landmark federal case came in 1926, after a company called Amber Realty sued the town of Euclid, Ohio, over a zoning ordinance that prohibited developing land for industrial use. The Supreme Court decided for Euclid, and in the process it upheld comprehensive zoning laws. At one point, Justice George Sutherland's majority opinion declared that "very often the apartment house is a mere parasite."

That ruling, coupled with Hoover's model legislation, gave state and local legislatures around the country confidence to move forward with zoning laws.

I don't want to suggest that zoning has had no positive effects. It has helped improve the quality and safety of housing. It has made it easier to link housing developments to roads, water, sewage pipes, and other infrastructure. It has certainly accomplished its goals of stabilizing property values and helping families keep away from factories, nightclubs, and garbage dumps. It may not be the only way to achieve such ends, but it has achieved them.

Yet zoning has failed by the most obvious and measurable metric: It has made housing far less affordable.

Zoning, by its nature, restricts the supply of housing. Where prices exceed construction and renovation costs, as they do now throughout the country, developers have a strong incentive to build more units on each acre of existing land. Zoning forbids this in all but the small areas set aside for multifamily housing.

During the rapid economic growth that marked the first half of the 20th century, there is some evidence that the cost of housing fell. New federal laws subsidizing mortgages via the Federal Housing Administration made homeownership more affordable and encouraged construction. So, later, did the G.I. Bill. Rental payments as a share of family income stood at 23.7 percent for the typical tenant in 1933; by 1960, the figure was 16.8 percent.

But since then, the trend has gone the other way. Median rent as a share of family income rose to 22.8 percent in 1980, then 27.1 percent in 2000. As of 2018, it stood at 31.4 percent. If housing costs were as low relative to income now as they were in 1960, the typical monthly rental bill would be $540. Instead, it's $1,100.

Some might counter that housing quality has greatly improved since then, justifying the increase in costs. But while there have been improvements in home size, indoor plumbing, and access to electricity, the Northwestern University economist Robert Gordon has shown that most of that happened before 1970. Price index data from the Bureau of Economic Analysis attempt to account for the size and quality of housing by comparing the prices of the same unit over time. They show that quality-adjusted prices for housing rose only 1 percent each year from 1930 to 1970, while overall consumer prices rose 2.2 percent. Then the pattern flipped: From 1970 to 2018, housing prices grew 4.2 percent each year, while expenses overall grew at an annual rate of 3.5 percent. So for the last 50 years, according to government data, housing quality has not improved enough to justify the rise in housing prices.

In 2005, Gordon and his colleague Todd van-Goethem demonstrated that actual housing inflation is even worse than the government data suggest. For most of the 20th century, the Bureau of Labor Statistics did not account for the age (and, thus, the depreciation) of the unit being rented. And because of difficulties contacting previous tenants, the statisticians missed some price increases when one tenant replaced another.

Data from the Census Bureau tell the same story: Quality improvements have not come close to offsetting housing price increases. According to the American Housing Survey, the size of the typical home has increased only slightly from 1985 to 2017, from 1,344 square feet to 1,500. Rental units increased in size from 900 square feet to 974. Over a similar period, from 1980 to 2018, the median rental price per room increased by a factor of 4.6, from $131 to $600 in nominal dollars, whereas the median family income of renters increased by only a factor of 3.5. People are also much less likely to live in new homes now than in 1980: The median age of housing structures has increased by roughly 20 years. Meanwhile, the median commute time has increased by five minutes since 1980, suggesting that affordable housing requires moving further away from job centers.

Government policies have long prioritized homeownership and single-family detached housing. Yet homeownership peaked in 2005, during the housing bubble, at 69 percent. The homeownership rate now (64 percent) is just as high as it was in the 1960s and lower than in 1980 (65 percent). Meanwhile, the percentage of people living in single-family housing—the gold standard of America's zoning planners—is down from 69 percent in 1960 to 62 percent in 2017.

Any way you look at it, housing has become less affordable and less efficient during the last half-century.

A century of zoning has also fostered segregation by race and class. Native-born people of African descent are roughly three times more segregated (according to a measure called an entropy index) in the United States than in England. Immigrants and low-income households are also far more segregated in the United States than in many parts of Europe.

The United States stands out as having the largest gap between rich and poor in neighborhood quality among rich democracies. Using Gallup World Poll data from 2009–2017, I was able to calculate the percentage of people in each country who rate their neighborhood favorably in terms of overall satisfaction, safety, affordability, and similar measures. I found that people in the bottom income quintile in the United States were roughly 15 percentage points less likely to give favorable answers than people in the top income quintile. That compares to a gap of only two percentage points in Sweden.

European land use policies, scholars have found, are not biased in favor of single-family homes the way they are in the United States. And the hostility to urbanization found among early 20th century American elites wasn't nearly as popular in Europe, which experienced centuries of city life before the United States was even established.

In her 2018 book Segregation by Design (Cambridge University Press), the political scientist Jessica Trounstine demonstrates that cities that were early adopters of zoning experienced higher levels of segregation 50 years later. My own academic work on contemporary zoning shows that municipalities with more restrictive laws house fewer black, Hispanic, and blue-collar residents than surrounding areas in the same metropolitan area, and that metropolitan areas are more segregated when their suburban governments are more restrictive.

It's impossible to quantify the damage this has done. Routine social contact between groups—ethnic, economic, or political—fosters trust. Isolation hinders it. Good neighborhoods launch low-income children on upward paths toward higher income, greater educational attainment, and lower arrest rates. Bad neighborhoods do the opposite. And segregation tends to trap low-income children in bad neighborhoods. One obvious way this manifests itself is in public education: Within the same metropolitan area, it costs several hundred thousand dollars more to buy a home near a high-scoring school than near a low-scoring school. (In metropolitan areas with abnormally severe exclusionary zoning policies, the school-quality cost gap is even higher.) Segregation has also deprived African Americans of wealth accumulation by devaluing homes and businesses in black neighborhoods.

Single-family detached homes may indeed have qualities that make them the most desirable abodes in which to raise a family, but those properties are in no meaningful way harmed by proximity to attached homes, condominiums, or apartment buildings. To fix zoning laws, the first step is to accept that poor people are not a negative externality akin to pollution. Then we can start to unravel the century-old knots that have prevented desegregation and made housing so unaffordable.

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  1. Zoning is one of the three primary concepts in the US, alongside property taxes and eminent domain, which put the lie to the idea of property ownership.

    When renting, you have to pay your landlord under threat of being evicted. If you supposedly “own” your home and the land it sits on, you have to pay the government under threat of being evicted. What’s more, even after you pay them their protection money, they still claim the right to tell you what you can and can’t do with “your” land.

    There’s a reason I will never “buy” property in the US, and that’s because it isn’t really mine. It merely means that I rent exclusive use of it from the government for approved purposes so long as the government doesn’t want it for anything.

    1. Y’all think real estate taxes are unfair?

      “Body taxes” are coming!!!

      Today, if I sink my own labor into my house and yard, and thereby increase my assessed tax value of my property, I have to pay more taxes! If I cannot pay my taxes, they take my house! They tax me out of my house, so that a richer person can buy it!

      Very soon now, brain transplants will be a “thing”. If you cannot pay your body taxes, they will tax you out of your body! It’s only fair!!! I sink my labor into my house, house taxes go up. Hollywood star or athlete sinks labor or money into body (working out, cosmetic surgery, etc.), assessed tax value of their asses (AKA Hollywood assessed-asses-values gentrification) should go up! They should live under threat of being taxed out of their bodies, as I live under threat of being taxed out of my house!

    2. It sounds like what you want is to be your own sovereign. In other words, you want your own country. Closest you will get to that is to buy a sailboat and spend most of your time in international waters.

      1. Because having ownership of the land you paid for, as an alternative to a de facto lease from the government, is so absurd and objectionable? Why would you possibly be against that?

      2. Well, if I own land I certainly expect to actually own it and not have it under threat of being taken away if I don’t pay a property tax at the very least. That proves that it’s not really yours, but the government’s, and you merely rent it from them, regardless of what they call the legal fictum.

        But no, although I believe in having a constitutional monarch as a hedge against governmental bloat and to protect the people from the tyranny of the majority, being a sovereign of more than just myself is not a job I’d want. Too lazy, to be perfectly honest.

        1. If you owned enough land you could incorporate your own city. That would go some way to helping you have more control

  2. THE RENT IS TOO DAMN HIGH. Now cue this land is your land.

      1. This land will belong to cows and chickens!

        Cows With Guns – The Original Animation

  3. More articles on how terrible white people are please.

    1. Some of my neighbors are white, and are VERY nice people!

      But then, Der TrumpfenFuhrer is a white-ass cracker as well, and just LOOK at HIM!!! Is it the orange hair and orange make-up that does it to him? I don’t think it is accurate of fair to generalize in this way, though… I think there might be NICE orange-haired people as well!

  4. Unless you have a simple-minded focus on making housing as cheap as possible, then the fixation on zoning is bullshit.

    Housing, like everything else in a free society, results from many choices, criteria, and desires–some of which may conflict, depending on the individuals involved. And people get to spend their money by preference. If I prefer a single family house, surrounded by more of the same, I will pay more for that. And I want some assurance that the values I paid for will remain, since houses are hard to move.

    I lived much of my adult life in Houston, which famously has little official zoning. But guess what? That government vacuum has been filled by private entities like HOAs, which specify the same restrictions to give buyers the same assurance–and lead to the same constraints on what some people wish for.

    1. And I want some assurance that the values I paid for will remain, since houses are hard to move.

      Why? Why is real property different then? Why not use violence to prop up the value of your car? Of your retirement investments? Of anything, really?

      Why does your house get a pass on initiating force against others?

    2. While zoning laws aren’t liberty minded, I’m more concerned over other government hoops that builders, contractors and others have to go through in order to do something with land they own. As the saying goes “Licensing and permits are the government selling your rights back to you”.

      There are also NIMBYs aka land socialists. Its hard to say that there’s a respect for private property if a bunch of socialists from both the left and right can just scream for the guns of the state to interfere with a property owner because owner is doing something they dont like. However there isn’t much one can do about when it comes to these socialist busy bodies other than getting people on your side to help defend your property rights

    3. I have a non-simple minded focus on housing being as inexpensive as possible, at least in some areas.
      I have long asserted the solution to homelessness would be allowing a truly free market in housing. Then we could use modern mass production, modern materials and design to empower folks to buy a small (10’×10′) structure, one designed to be expanded in small increments.
      An architect friend gave me an estimate such a home could be built and livable, with a profit to the builder for less than 20 thousand.
      At that price, a high school grad could own it in five years working a minimum wage job. Since it would be expandable, if the worker was diligent and thrifty, could house a young family in early twenties with the house payed for.
      Think what that would do to cost of living for low wage workers. And hence attracting manufacturing back to this country.
      All by actually allowing freedom to benefit the poor.
      Sure, there would be issues about where to allow. Etc. But if you think the only way to maintain the value of your property and keep your wealth is by using government to stifle the freedom of others, then you are not a libertarian, or even a socialist. You are a fascist. And if you do it to the poor to keep them poor, you are an oppressor.

      1. Nobody keeps the poor poor other than the poor.

        Gotta have a boogeyman oppressor, tho! It might convince them that trying to not be poor is a waste of effort. Which is a form of oppression?

        Whoa! Trippy, dude. So many oppressors!

        Everything is so terrible and unfair. Haha.

        1. Nobody keeps the poor poor other than the poor.

          Not true. Governments keep people poor by looting and forbidding the poor from seeking advancement.


    4. Zoning isn’t about choices. Zoning is rent-seeking for existing home owners and theft from home buyers. An HOA is not the same thing since those only cover one particular subdivision. Someone could buy up all the houses in the subdivision, knock them down, dissolve the HOA, and build whatever they want.

      With all that said, the biggest problem in home affordability is growth management – not zoning. Prohibiting construction outside of an arbitrary boundary severely limits the supply of land available for construction and thus raises prices accordingly.

  5. Routine social contact between groups—ethnic, economic, or political—fosters trust. Isolation hinders it. Good neighborhoods launch low-income children on upward paths toward higher income, greater educational attainment, and lower arrest rates. Bad neighborhoods do the opposite. And segregation tends to trap low-income children in bad neighborhoods.

    Thanks for the high-minded philosophizing, but it does not escape my notice that these claims are conspicuously light on empirical support. It’s particularly ironic (though ever so typical) that you’re pointing to societies far more homogeneous than the United States as models of success. I don’t think yes s coincidence that heterogeneous societies tend to be riven with far more strife. There’s a reason for the age-old saying that good fences make for good neighbors.

    1. Although he didn’t cite any sources there is evidence for the claims. Here is one study – https://scholar.harvard.edu/files/lkatz/files/mto_manuscript_may2015.pdf

  6. Cramming multiple families onto a property just because it’s cheaper sounds very anti-libertarian to me. That’s the kind of collectivist shit greens push for.

    1. No one is forced to move into the apartments (aside from government policies that multiplied the cost of living elsewhere). It’s telling the landowner how many families can live on his land that is anti-libertarian.

  7. Please go to Houston sometime and see what it’s like without zoning. Literally a business had an explosion two months ago on the west side, in which nearby houses had windows blown out. This is what happens when you locate a type of business with residential areas because of no zoning.

    It’s cheap to live there though. If you can stand it.

    1. //Literally a business had an explosion two months ago on the west side, in which nearby houses had windows blown out.//

      And, in New York City, the pinnacle of senseless zoning laws, a multi-family building in Harlem blew up in a gas explosion, killed about 10 people, and displaced hundreds of others.

      What does this have to do with zoning?

  8. Zoning laws also make it much more expensive to start a business, thus keeping even more people in poverty or near-poverty.

  9. It’s not Herbert Hoover to blame. It’s Hammurabi – nefariously assisted by that bitch Nefertiti.

    We really must do a better job of identifying the dead guys who are to blame for everything now.

  10. Damn it! I want to blame Obama!

  11. Thanks Herbert for keeping us moving companies in business!

  12. The Austin Texas zoners and assessors just doubled property taxes at the Pflugerville border, which doubled the mortgage so owners lose the house, sell or raise the rent.
    But I’m sure Hoover’s motives were altruistic. The guy hated dog-eat-dog laissez-faire and said so in so many words.

  13. So, you’d buy a house next to a paper plant? I know one where the digester just blew up, but that wouldn’t bother YOU.

    1. Well if it’s there when you built the house then that’s on you. But how many paper plants were ever being constructed in the American suburbs? You’re trying to justify bad policy by inciting fear about something that never happened. And even if that were a reasonable concern why would you need to restrict the housing supply in order to block the construction of paper plants?

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  15. I don’t blame Herbert Hoover. Most politicians are only babbling and scribbling. One makes a motion to amend a motion and another scribbles an autograph. Cops intimidate people into complying. I blame everything on cops.

  16. Housing isn’t expensive “in America”. Housing is expensive in desirable neighborhoods near high-paying jobs. That’s true in leafy suburbs like Palo Alto and in dense, vertically built areas like Manhattan. It’s not so expensive in the remaining 80% of the country.

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