Building consensus: Congress takes on zoning

On April 28, 2023, SGA attended the Senate Committee on Banking, Housing, and Urban Affairs in their hearing, “Building Consensus to Address Housing Challenges.” At the hearing, senators recognized the housing crisis and the need to address it, and witnesses testified to various approaches to solving housing problems and delivering more much-needed housing affordable to low and moderate-income housing. Specifically, the theme of zoning and housing regulations frequently came up on both sides of the aisle, elevating zoning as a key issue that could be addressed by the federal government despite regulation traditionally occurring at the state and local levels.

Smart Growth America sees zoning reform as a key strategy to advance sustainable, equitable development. Zoning has historically been used as an exclusionary tool that has perpetuated segregation and reduced wealth-building opportunities for communities of color. For more information about SGA’s zoning work, visit the Form-Based Codes Institute. LOCUS, our coalition for triple-bottom-line real estate developers, and SGA’s related advocacy initiatives also stand ready to support legislation that creates vehicles for zoning reform for more equitable, sustainable development.

Backing up to 1926: the U.S. Supreme Court in Euclid v Ambler established the constitutionality of so-called “Euclidean Zoning.” This gave state and local governments the right to use their powers to segregate land uses, which many jurisdictions used to actively discriminate against Black and Brown communities by excluding them from moving into white neighborhoods and reducing property values in their communities. Not only did cities use this power to keep industrial uses away from residences, but they also banned apartments in many parts of cities. A key part of the case, and continued use of this zoning, has been to make dense, walkable communities with multiple housing options (including apartments) illegal. Prior to Euclid, cities across America broadly allowed various types of housing to be built nearly anywhere, and you can see the evidence in many pre-war communities with mixes of rowhomes, apartments, and other housing—so-called “missing middle housing” that is now illegal to build in most communities.

The net effect of Euclidean zoning is that the U.S. has a severe housing shortage and significant areas of land in which building more housing is simply illegal. We shouldn’t be surprised at the results as Justice Sutherland wrote in Euclid’s opinion that apartments (and, by extension, renters) are “a mere parasite, constructed in order to take advantage of the open spaces and attractive surroundings created by the residential character of the district.” This view permeates housing discourse to this day, as many communities attempt to preserve their exclusionary zoning with a view that others might come and take something that presumably isn’t theirs.

So what are some of the problems and solutions?

At the hearing, Diane Yentel of the National Low Income Housing Coalition testified that there is a national shortage of 7.3 million homes affordable to low-income renters at or below the federal poverty limit, or 30 percent of their area median income. Additionally, 10 million of the lowest-income renter households pay at least half their income on rent.

Vanessa Brown Calder from the Cato Institute added that “zoning and land-use regulation continues to limit housing supply by increasing development costs, creating uncertainty and producing delay.” She noted how a substantial portion of federal housing subsidies go towards a few higher-income regions that tend to restrict housing supply the most. Indeed, one paper by Enrico Moreti and Chang-Tai Hsieh indicates that housing restrictions in the most productive cities and regions cause national GDP to be 9 percent lower than it otherwise would be.

This theme resonated with Senators from both sides of the aisle as the national housing crisis appears to be well-recognized. Chairman Wyden’s committee discussed various housing solutions including rental assistance programs, mortgage and banking programs for homebuyers, and policies to address the homeless crisis.

While the federal government’s role in housing is important, it is limited. Because zoning is primarily a state concern, the federal government’s ability to direct zoning reform comes through its purse strings. Senators Todd Young (R-IN) and Brian Schatz (D-HI) have introduced the YIMBY Act, which would tie Community Development Block Grant (CDBG) recipients to report and track their efforts at zoning reforms to expand high-density single-family and multifamily zoning, and to respond to any failures at progress.

Ranking member Sen. Scott (R-SC) also added language that would hold agencies accountable and incentivize them to reduce regulatory burdens by establishing robust data collection and reporting procedures to better understand the zoning problem.

Of course, smart growth is about people being able to live in healthy, prosperous, and resilient communities no matter who they are or where they live. A large part of this is walkable urban places and providing for innovative zoning solutions like form-based codes and other zoning reforms. We recognize that more walkable places reduce transportation costs for lower-income families, increase opportunities for children, and benefit public health.

It is about time that the federal government take leadership in addressing regulations that have limited the ability of communities to build more housing. The Biden Administration has already identified this as a key initiative and has issued its Housing Supply Action Plan that, among other things, incentivizes jurisdictions to reform zoning and land-use policies. It is encouraging to see Congress identifying and addressing the problems of housing supply and the link to zoning. We’re hopeful that Congress will advance new legislation that encourages communities to return to vibrant, mixed-use, diverse communities with a diversity of housing options for people from all walks of life.


Land Use and Development