Property Rights

Cory Booker Proposes Bill to Curb Exclusionary Zoning

He deserves credit for being one of the very few national politicians to focus on this enormous problem. If enacted, his proposal would be a step in the right direction, though it is likely to have only a modest impact.


Senator Corey Booker (D-New Jersey).

Democratic Senator and possible 2020 presidential candidate Cory Booker has proposed a bill to curb exclusionary zoning, a practice that massively increases the price of housing in many cities and cuts off millions of people from job opportunities. Booker deserves credit for being one of the very few national politicians to highlight this enormously important issue. If enacted, his proposal would be a step in the right direction, thought it would probably have only a modest effect.

Richard Kahlenberg summarizes Booker's plan and the problem it is intended to address, in the American Prospect:

Local ordinances that ban apartment buildings from certain residential areas, or designate a minimum lot size for single family homes, don't explicitly discriminate by race, but they effectively exclude families of modest means from entire neighborhoods—and school districts. These laws promote economic segregation by government fiat. People of color are hit especially hard…

Moreover, exclusionary zoning feeds the affordable housing crisis. Restrictive zoning laws drive up prices by artificially restricting the supply of housing. When developers are limited in the number of new units they can build on a particular parcel of land, the basic laws of supply and demand suggest existing housing will become more expensive.

[On August 1], Booker introduced federal legislation—the Housing, Opportunity, Mobility and Equity (HOME) Act—to address this key piece of the Fair Housing Act's unfinished business. The bill would promote more inclusive zoning policies in order to make housing more affordable and less segregated.

Under Booker's proposal, states, cities and counties receiving funding under the $3.3 billion federal Community Development Block Grant program for public infrastructure and housing would be required to develop strategies to reduce barriers to housing development and increase the supply of housing. Plans could include authorizing more high density and multifamily zoning and relaxing lot size restrictions. The goal is for affordable housing units to comprise not less than 20 percent of new housing stock….

Exclusionary zoning is one of the great underappreciated issues of our time. Economists and housing policy experts across the political spectrum recognize that it prices the poor and lower-middle class out of many areas, thereby cutting them off from valuable job opportunities. It also greatly reduces economic growth, harming even many people who are not directly affected by the exclusions. Increasing mobility by cutting back on zoning is an important common interest of both the minority poor and the white working class, but one that is largely ignored by both major political parties. Broad agreement among policy experts has so far failed to generate much in the way of momentum for reform—in part because most ordinary voters probably don't understand the counterintuitive links between zoning restrictions, job opportunities, and economic growth. Inadequate public understanding of the problem was one of the causes of the recent defeat of California Bill 827, a major effort to liberalize zoning restrictions in the nation's most populous state.

Booker's plan could help alleviate the problem. If the federal government is going to subsidize local development, it should at least deny such subsidies to jurisdictions that are shooting development in the foot through exclusionary zoning. But the effects are likely to be modest because the $3.3 billion in CDBG subsidies is only a tiny fraction of federal grants to state and local governments (estimated to be some $728 billion in fiscal year 2018). Many cities—particularly the big ones whose particularly severe restrictions inflict the most harm—are likely to prefer to do without these funds rather than reforming zoning policies backed by powerful interest groups.

Still, Booker's HOME Act would likely lead to beneficial policy changes in at least some areas, and his advocacy could help attract much-needed attention to this problem. At the very least, Booker's recognition of the importance of reducing obstacles to building new housing is far preferable to the housing policy proposed by one of his likely 2020 rivals: Sen. Kamala Harris' badly flawed plan to reduce housing costs by providing federal subsidies for renters, an idea that will inflict costs on taxpayers without actually doing anything to alleviate housing shortages (though, unfortunately, Booker's plan also includes a tax credit for renters).

Some on the right might object to the HOME Act on federalism grounds. Why should the federal government have the power to use grant conditions to incentivize changes in local housing policy? I am no fan of most federal grants to state and local governments, and have long advocated tighter enforcement of constitutional restrictions on them. But if CDBG and similar grant programs are going to continue (and it is unlikely they will be abolished in the near future), it makes sense to use them to curb local policies that harm large numbers of people and undermine the purposes of the grant programs themselves. Moreover, in my view, many severe zoning restrictions are themselves violations of constitutional property rights, because they are uncompensated takings that violate the Takings Clause of the Fifth Amendment. To the extent this is true, Section 5 of the Fourteenth Amendment gives Congress the authority to curb them. The power to enact "appropriate" legislation to enforce the Fourteenth Amendment, also includes authority to enforce the Fifth Amendment and the rest of the Bill of Rights, which the Fourteenth Amendment "incorporated" against state and local governments.

Finally, decentralization of power to states and localities works best when people have the ability to "vote with their feet" against harmful policies and in favor of good ones. Decentralization without mobility often causes more harm than good. Exclusionary zoning is a particularly pernicious example of that problem. It simultaneously imposes burdens on owners of an immobile asset (property in land) that cannot use exit rights to escape them, and severely restricts foot voting by people who are priced out of the regional housing market as a result. There is good reason to use federal power to protect property rights in land from local exploitation, and also to protect mobility against locally-imposed restrictions. To the extent that loosening zoning restrictions enables property owners to exercise greater control over the use of their own land, it actually facilitates a greater degree of decentralization than the status quo. Letting owners make their own decisions is a more decentralized approach to land use than concentrating that power in the hands of state and local governments.

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  1. This is remarkably wrongheaded:

    “Moreover, in my view, many severe zoning restrictions are themselves violations of constitutional property rights, because they are uncompensated takings that violate the Takings Clause of the Fifth Amendment.”

    In the vast majority of instances, zoning props up property values. Sure, one person in a run-of-the-mill affluent suburban community could make a killing selling his property to a developer to make a 50-story “affordable” apartment complex, but how exactly is that good for all the other members of that community that paid FMV for their property on the assumption that the zoning would remain reasonably stable. If there is a “taking” there, it is in the reduction of housing values by virtue of the removal of the zoning regs.

    Moreover, you’ll just be trading zoning codes for officious HOAs with restrictive development covenants, unless you want to hold those to be unconstitutional too

    1. You seem to have your chicken and your egg mixed up. The foundational act is the original zoning which, all else being equal, restricts to some degree the ability of a property owner to use or sell that property according to the best use the owner judges.

      As Ilya states, if that first zoning action decreases the monetary value of the property, it may qualify as a 5th Amendment taking. Your further example (“…by virtue of the removal of the zoning regs”) in different circumstances could just as easily increase as decrease value, and to the degree that it decreases, that’s just a reversion to the original non-artificially-enhanced value.

      Your “restrictive development covenants” example is irrelevant–that’s just a private contract entered into between two willing parties.

      Saying this as, generally, a supporter of reasonable, well-thought-out zoning and other local government planning practices. But (‘aye, there’s the rub’) who decides what “reasonable, well-thought-out” means? Unreasonable or not well-thought-out zoning/planning practices (especially the long-term consequences) are the reason this is an issue in the first place.

      1. I don’t think I do. In my “village”, the zoning ordinances have been around since 1923, and were last revised in 1984. So virtually every home has changed hands under a zoning regime, and I’d venture to say a large majority under the current regime.

        Consequently, these are not just “paper profits” created by a recent, arbitrary government decision. Virtually everyone has bought in under these rules, and changing those rules now would destroy a lot of value.

        Good luck with that politically.

        Also, the restrictive covenants in HOAs are intended to run with the land. So they are voluntary in the same sense that joining the union in a closed shop is voluntary. Sure you could just have declined the job offer and worked elsewhere, just like you could have bought a different house elsewhere.

    2. Yes, we need the government to continue propping up property values. We can’t have the government repealing long-standing market interventions which have upheld high property values for so long that they have become normal property values.

      Bring back slavery!

  2. This seems to creep into unconstitutionally coercive territory, as they’re changing the rules for pre-existing funding by dictating how state/local laws should be written to continue to receive the funding.

    1. Yeah. I think we just had a court ruling on this. Something about sanctuary cities I believe.

      1. Nope. the sanctuary cities argument is about the Executive branch taking action constitutionally reserved to the Legislative branch. Sen Booker’s “HOME Act” would be the Legislative branch taking soley legislative action.

        If it desires, Congress is fully capable of modifying its earlier legislation action to meet the desires of the current Executive. Telling that it hasn’t.

        1. Indeed, the only think Booker has to do under those precedents is make very clear which funds are attached to which conditions.

          Imagine that — clear legislation!

  3. I so often agree with you.
    Even when I don’t, I much appreciate your efforts that help me think more clearly.

    May I infer your opinion to be that the solution to a bad law is another law? And you seem to favor a national solution to a local problem.

    Who are you?
    And what have you done with one of my favorite libertarians?

    Since I personally had received financial benefit from living in a city with tight zoning regulation, I was slow to realize that properties in nearby areas with no zoning laws appreciated even more quickly. 20 years ago, I could have written comments that preceded this.
    These days, I favor the solution to teach future judges in training the ways to strike down legislation that [is seductively trendy but] makes somebody able to tell, at the point of a gun, somebody else how to live their own life on their own property.
    On that, we can agree.

    1. I think this is well-explained in the post — the Federal government already influences local housing and gives out grants. Since they are unlikely to stop, they could at least do so in a more productive way.

      Or to put it another way, here’s a hypothetical preference chart:

      [Most Preferred]
      Phase out CDBG and reduce Federal spending/influence on local housing policy
      Modify CDBG to promote better (in his view, obviously subjective) housing policy
      Leave CDBG as is
      [Least Preferred]

      You are objecting to #2 on the basis of #1

  4. The proposal is just a way to reduce middle class wealth and experiment with social engineering.

    The left has wanted to force nice areas to accept the poor and their pathologies for decades.

  5. “recognize that it prices the poor and lower-middle class out of many areas, thereby cutting them off from valuable job opportunities.”

    Well, that is one set of conjectures; but I have never, ever, seen job opportunities in a tightly zoned residential development. (other than for lawn care companies and nannies)
    Generally, the job opportunities are surrounded by less affluent housing.

    In principle, I prefer that the federal government stay out of local decisions. While I am willing to move when local government becomes inconvenient, and have done so more than once, I am not willing to move out of the USA.
    This is just another policy position of Cory Booker that I completely disagree with.

  6. The issue isn’t limited to housing. The issue is broader and includes exclusionary and restrictive zoning of the services that residents need for a community. NIMBY and counting the number of protesters at the back of the room is the primary decision factor in local zoning decisions. A politician will never be voted out of office for turning down a development but, they can be voted out of office for approving something.

    I heard a commissioner with 20 years in office and a masters degree in urban planning say “All of my experience and education tells me that I should vote in favor of this development proposal, however, the neighborhood association is against it and a neighborhood association can never be wrong. Therefore, my vote is no.”. That’s the reality for zoning and land use on a local level.

    Just having flexibility in what type of housing fits a community only goes so far. if the offices, services, goods etc are pushed away from housing, then the community is dysfunctional.

  7. “Moreover, in my view, many severe zoning restrictions are themselves violations of constitutional property rights, because they are uncompensated takings that violate the Takings Clause of the Fifth Amendment. To the extent this is true, Section 5 of the Fourteenth Amendment gives Congress the authority to curb them.”

    And the courts would also have the authority to strike these severe zoning restrictions down. Which would be a more effective and less costly means of eliminating them than piling on a new layer of federal regulations, on top of an existing layer of federal regulations, that will have minimal impact on the problem and hand out tax credits to renters.

  8. Somin: I love Federalism when the States ignore Congress’s right to control immigration!
    Also Somin: I love Anti-Federalism too, because Anti-Federalism is convenient in progressing my anti-zoning beliefs.
    Also also Somin: State and local zoning laws might be unconstitutional, so it’s up to the Federal Government to replace them!

  9. I immediately became suspicious of Booker’s proposed legistlation when I saw its moniker ” Housing, Opportunity, Mobility and Equity (HOME) law ” .

    1. Isn’t that how pretty much all US legislation works: some probably crappy law with a ridiculous acrostic like USA PATRIOT Act/HOME Act/FAST Act or else some definitely crappy law with somebody’s name on it like Marsy’s Law or the Cameryn Guilbrantson Vehicle Safety Law?

      I like the UK method of [Topic] Act [Year].

  10. Restricting what mortgages the FHA will insure would do a lot more to pressure localities to change than messing with block grants. It would also be rather more indirect, making it harder for localities to fight.

  11. For the beacon of failed federal land use policies, see National Flood Insurance Program (“NFIP”). For macro exclusionary zoning created and enforced by the federal government, with limited exceptions for wealthy communities that politically align with leftist ideologies, see NFIP. For a program that unquestionably puts the bulk of the burden on 1 state (FL) which effectively pays 400% of the benefits it receives–and the surplus is given to other states and insurance brokers, see NFIP.

    Wisdom and constitutional principles mandate keeping the federal government out of fundamentally core state and local issues–such as land use and real property–altogether.

  12. So, if zoning isn’t the answer, how do you propose to keep lower middle class and poor folks from living near you? Or manufacturing plants from opening up? I’m not suggesting it won’t be done ? I know it will ? I’d just like to hear what innovative technique you prefer to “protect your property values”.

  13. I agree that exclusionary zoning has exacerbated the problem of housing prices–especially in areas such as California, where it is virtually impossible for lower-middle class and poor individuals to afford a place to live.

    However, at this point changing zoning laws will not help the poor–and in fact, may make things far worse.

    Here’s the problem. Right now housing costs roughly $100/sqft to build. (My parents are in the building industry–and many areas, such as California, are seeing construction costs closer to $130-$150/sqft to build.) This implies a 500 square foot apartment (which is rather small by today’s standards) would cost between $50,000 to $75,000 to build. Assume it is rented out for 1% of the purchase price, and we’re talking about an apartment that would rent for around $500 to around $750/month. Using the National Low Income Housing Coalition’s guidelines and that implies apartments only affordable to those who make between $11/hour and $16/hour.

    And these are hard cost numbers, not counting building contractor profits. Typically new apartments are being built for twice this amount or more–meaning new apartments are simply not affordable to the poor.

    By eliminating exclusionary zoning laws and permitting older neighborhoods (where housing costs are affordable due to sunk construction costs), we run the risk of wiping out affordable housing and replacing it with housing that squarely targets the middle class instead.

    This won’t help the poor.

  14. People work hard, save there money, and buy a house in the best neighborhood they can afford . . . along comes Somin with yet another utopian social engineering notion and wants to put “affordable” housing next door. Yea!

    1. They actually just want housing, period. But of course it is so called “conservatives” advocating for free markets who want to impose arbitrary density restrictions on land they don’t own to make housing more expensive for newcomers. This is the definition of rent seeking, advocating for the state to impose anti-competitive restrictions for their own personal gain. Absolutely disgusting.

  15. According to Wikipedia,

    The Community Development Block Grant (CDBG) program was enacted in 1974 by President Gerald Ford? President Ford emphasized the bill’s potential for reducing inefficient bureaucracy, as the grant replaced seven previous programs that were “too fragmented to provide comprehensive solutions to complex local needs”. He also noted its potential for improving government effectiveness by “replacing Federal judgments on local development with the judgments of the people who live and work there”: placing more decision-making power on local funding choices in the hands of local governments who “are most familiar with local needs”. The CDBG was presented as explicitly meant to “redistribute influence from the federal bureaucracies to local governments” – in Ford’s words, to “return power from the banks of the Potomac to people in their own communities”.

    Under this proposal, apparently, the federal government now wants to control all land use planning for a city or country that wants a limited grant to improve specific public infrastructure. Maybe a further decline in funding for CDGB can be expected.

    1. The NFIP is probably the most egregious federal legislation since the FDR passed away, and it deals very closely with land use/spending conditions/etc. Federal government is incompetent in this area. Stay out. Some ideas are dumb. Federal involvement in local/state land use and zoning issues is a dumb idea. It would take multiple law review articles to explain how the NFIP is a massive disaster. My skepticism of federal legislative and administrative competence stems from the NFIP.

  16. Anyone here advocating for the state to drastically restrict the ability to improve land based on the needs of a community by definition is a statist. “Libertarians” who advocate for free markets, except when it comes to their own communities, are the worst, most hypocritical and fake “libertarians” that exist. It is because of zoning that arbitrarily places limits not on building heights, but density, lot coverage, and parking requirements that housing is extremely expensive, depriving us of not only a basic human need of shelter, but all of the employment and value that our economy would produce otherwise if we were allowed to address market demand. It results in more state-imposed suburban sprawl and automobile dependency, killing cities and encouraging extremely wasteful and polluting means of transportation. Its ironic that a liberal democrat is the one who is proposing to offer but a slight deregulation of asinine land use policies, and that so called free market advocates here in the comments are crying fowl over attempts to rid us of these extremely destructive and arbitrary land use policies. Such hypocrisy is disgusting! Shame!

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