By Helen Hope · September 22, 2021

The results are in: places that adopt form-based zoning codes generally perform better economically than places regulated by more conventional, Euclidean zoning—and there’s evidence that the former can also help foster more equitable development, according to new research released today by the Form- Based Codes Institute at Smart Growth America.

Released today, Zoned In: Economic Benefits & Shared Prosperity with Form-Based Codes shows how form-based codes produce better economic outcomes, lead to positive impacts for equity and equitable development, and provide the best zoning and regulatory framework for good smart growth development.

The report documents how, when communities adopt form-based codes, instead of conventional, complicated zoning rules that separate uses and encourage sprawl, communities can more easily add more homes for more people while increasing property values and tax revenues—but not necessarily housing costs.

We’ve long believed that cities, towns, and other jurisdictions that adopt form-based codes tend to perform better economically. Zoned In provides quantitative analyses—trends in land values, tax revenues, rents, and demographics—as well as qualitative assessments from public and private stakeholders in the study areas to prove it. To do this, FBCI-SGA examined data from four jurisdictions in different parts of the country over a 10-year period. In each jurisdiction the study compares demographic and economic trends in an area with a form-based code with another area regulated by conventional  zoning. 

As localities of all types seek  to meet the pent-up market demand for walkable, mixed-use, smart growth development, many are finding that their older, conventional, use-based zoning gets in the way. Conventional zoning—also referred to as Euclidean zoning—was devised over 100 years ago to prevent undesirable adjacent uses—noxious factories next to homes, schools across the street from taverns—and incompatible adjacent scales of development.  Conventional zoning also was adopted in many places to segregate communities based on wealth, race, ethnic group, and abilities and it continues to dominate in  most American communities today.

This report examines the difference and outcomes of Euclidean zoning versus form-based codes. Form-based codes are widely recognized as tools to improve the character of a place, encourage physical activity, and strengthen resilience to climate change. While most people familiar with form-based codes believe that the places these codes regulate tend to perform better economically, evidence to support this premise has been primarily anecdotal, until now. So, the Form-Based Codes Institute at Smart Growth America decided to dig in. Starting with four jurisdictions that have had form-based codes within their boundaries for at least five years. 

We then identified nearby places regulated by conventional zoning to compare the extent to which each of the two codes contributed to the neighborhoods’ economic growth and stability.  Interviews with  public officials, community leaders, residents, business owners, and real estate developers in each jurisdiction complemented the ten years of hard data. 

Below you’ll find some of the key findings, but we highly recommend reading the full report here.

• The four areas with form-based code saw a greater increase in construction activity, particularly in multi-family development, than the comparison areas (average 154 vs. 115 percent, respectively).
• Average rent in multi-family developments grew at a slower pace in places with form-based codes than in the comparison areas (8.7 percent increase vs 16.6 percent). This is because there are more housing options for a wider range of household incomes in the form-based code areas, making it possible for folks and families of different backgrounds to share the prosperity of their community.
• The number of residents in the form-based code areas grew faster than in the comparison areas, largely because form-based codes create desirable places where people can live near jobs and amenities with more options for transportation to everyday destinations. 
• The areas with form-based codes collectively generated nearly $65 million more in tax revenue than the comparison areas’ revenue baseline. (sometimes referred to as a “no intervention” scenario).
• Stakeholders across jurisdictions emphasized the improved quality of life, walkability, and access to services and amenities for local business owners and residents in the areas with form-based codes. 
• Real estate developers touted the increased flexibility and predictability of the approval process in places where form-based codes were in effect.
• There was no statistically significant change in the racial make-up of areas with form-based codes, which reinforces the fact that form-based codes are not a catalyst for gentrification and displacement when they’re designed in partnership with and around the needs of the community.

While a form-based code can create these opportunities for more equitable development, local policy makers also must act to ensure that these opportunities are not missed. They must take the time and make the effort to fully engage current, often lower wealth, residents and business owners in the visioning and code writing process. Leaders must ensure that homeowners and tenants have the knowledge and resources to access the wider range of housing types, and they must incent developers to pass savings on to end users through density bonuses, fast-track approval processes, and other strategies. 

You can read the full report of Zoned In on the Smart Growth America website.

About the Form Based Codes Institute at Smart Growth America.