Property Rights

Minneapolis Strikes a Blow for Affordable Housing by Slashing Zoning Restrictions

Zoning rules that severely restrict home construction cut off millions of poor people from jobs and affordable housing. The Minneapolis reform is the most extensive reduction in zoning achieved by any major American city in a long time.

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Minneapolis.

Yesterday, the City of Minneapolis struck a major blow for both property rights and affordable housing by enacting the most extensive reduction in zoning restrictions adopted by any major US city for a long time. Henry Grabar of Slate summarizes this welcome development:

Minneapolis will become the first major U.S. city to end single-family home zoning, a policy that has done as much as any to entrench segregation, high housing costs, and sprawl as the American urban paradigm over the past century.

On Friday, the City Council passed Minneapolis 2040, a comprehensive plan to permit three-family homes in the city's residential neighborhoods, abolish parking minimums for all new construction, and allow high-density buildings along transit corridors.

"Large swaths of our city are exclusively zoned for single-family homes, so unless you have the ability to build a very large home on a very large lot, you can't live in the neighborhood," Minneapolis Mayor Jacob Frey told me this week. Single-family home zoning was devised as a legal way to keep black Americans and other minorities from moving into certain neighborhoods, and it still functions as an effective barrier today. Abolishing restrictive zoning, the mayor said, was part of a general consensus that the city ought to begin to mend the damage wrought in pursuit of segregation. Human diversity—which nearly everyone in this staunchly liberal city would say is a good thing—only goes as far as the housing stock…

A lot of research has been done on the history that's led us to this point," said Cam Gordon, a city councilman who represents the Second Ward, which includes the University of Minnesota's flagship campus. "That history helped people realize that the way the city is set up right now is based on this government-endorsed and sanctioned racist system."

Kriston Capps of City Lab writes that "Minneapolis 2040 is the most ambitious upzoning guide yet passed by an American city." Some 75 percent of city residents live in areas where single-family zoning restrictions currently apply.

The case for cutting back on zoning restrictions unites economists and housing policy experts across the political spectrum. That includes both pro-free market experts and prominent left-liberals such as Nobel Prize-winning economist Paul Krugman, Matthew Yglesias of Vox, Yale Law School Professor David Schleicher, and Jason Furman, Chair of President Obama's Council of Economic Advisers. In addition to greatly increasing housing costs, zoning also cuts off many poor and lower-middle class Americans from valuable job opportunities, thereby also greatly reducing economic growth. As Grabar points out, many zoning restrictions (including many single-family home rules of the sort repealed by Minneapolis) were enacted in large part because of a desire to exclude African-Americans and other minorities. Minneapolis Mayor Jacob Frey notes that "Minneapolis has a long history going back 100 years of redlining and intentional segregation. We literally have maps at the city that identify north Minneapolis as a slum for blacks and Jews." Both liberals concerned about expanding opportunities for the poor and racial minorities, and conservative and libertarian property rights advocates have good reason to support abolishing zoning rules that make it difficult or impossible to build new multifamily housing in many major cities.

Up until now, however, most reform efforts have been stymied by a combination of public ignorance, interest group pressure, and NIMBYism. Earlier this year, for example, the California state legislature defeated Bill 827, a reform effort that would have greatly expanded the availability of housing in a state that has particularly onerous zoning restrictions. Sadly, liberal Democratic cities ruled by political coalitions supposedly committed to helping the poor have some of the nation's most severe zoning rules, thereby cutting off many of the poor from both housing and jobs. Affordable housing advocate Shane Phillips has rightly highlighted the "disconnect between liberal aspirations and liberal housing policy."

Minneapolis' new plan is a welcome break from this sad state of affairs. Having criticized other blue jurisdictions for their failure on this issue, it is only fair that I give full credit to Minneapolis' overwhelmingly liberal Democratic city government for achieving a major breakthrough. Policy experts and other reform advocates would do well to study the Minneapolis effort to see if it contains any insights on how to achieve similar progress elsewhere. Kriston Capps' City Lab post includes an interview with Minneapolis Mayor Jacob Frey discussing how the plan came about, though he offers few specifics on what he and his allies did that differed from less successful efforts elsewhere.

UPDATE: Thomas Lifson of the American Thinker blog responds to this post here, arguing that the Minneapolis reform destroys neighborhood "diversity" by overriding the preferences of people who prefer to live in single-family homes. But the fact that building multifamily residences is permitted does not mean that all homes in the city will be that way, or even that there won't be neighborhoods where single-family residences are by far the most common type. To the contrary, allowing property owners to decide for themselves what sort of homes can be built actually increases diversity. In some cases, residents of an area can even agree among themselves to limit particular types of development through such devices as private planned communities and restrictive covenants. What the Minneapolis reform does is prevent the coercive imposition of mandatory homogeneity on the vast majority of an entire city. That both fosters diversity and - perhaps more importantly - increases the freedom of property owners and people seeking jobs and affordable housing.

Lifson also doubts the racist origins of single-family zoning, claiming that Minnesota had only a very small black population until recently. The racial motivations behind this kind of zoning are well-established by historians and property law scholars. They were by no means the only motives for it, but did play a major role in both northern and southern cities. That includes some that did not initially have a large black population, but feared that one might be established because numerous African-Americans were migrating from the south to northern cities in the early to mid-twentieth century.