THE PERILS OF LAND USE DEREGULATION.

• Author: Schragger, Richard C.

INTRODUCTION 126 I. THE REDISCOVERY OF EXCLUSIONARY ZONING 134 A. What is Exclusionary Zoning? 134 B. What Explains the Rediscovery of Exclusionary Zoning? 141 II. THE LIMITS OF CENTRALIZATION 149 A. The Inherent Limitations of State Land Use Reform 150 B. The Problem of Preemption 156 III. THE LIMITS OF DEREGULATION 162 A. Location, Location, Location 163 B. Accounting for High and Low Demand Places 170 IV. THE LIMITS OF MOBILITY 175 A. Moving to Opportunity 177 B. Moving to Productivity 183 V THE CASE FOR CITY POWER 189 A. Extracting Concessions from Mobile Capital 190 B. The False Choice Between Growth and No-Growth 194 C. Rebalancing Public and Private Power 199 CONCLUSION: 203 INTRODUCTION

Land use reform has recently become the subject of contentious debate in the United States. Once a fairly obscure and technical topic, zoning has become hot, spurred in large part by an affordable housing crisis in increasingly popular cities and metropolitan areas--especially on the East and West Coasts. (1) The "Yes in My Backyard" (YIMBY) movement, most salient in California, (2) has made the elimination of single-family zoning one of its central goals, and some jurisdictions have done so. (3) The 2020 presidential election brought additional attention to the issue (4) and the new Biden administration has made the elimination of "exclusionary zoning" a centerpiece of its housing agenda. (5) This attention to land use has coincided with a renewed appreciation for the role that zoning has played in reinforcing racial segregation and exacerbating poverty, and has combined with regionalism advocates' long-running distrust of local exclusionary land use policies.

Land use regulation generally and zoning, in particular, have long been core powers of local governments, and many land use reforms are occurring at the local level. (6) But an emerging conventional wisdom is almost uniformly hostile to local government control of land use policy. The new land use reformers take for granted that state (or even federal) laws are necessary to override local parochialism and that local governments cannot be trusted with land use policymaking and will abuse their zoning powers in predictable ways. (7)

This Article challenges that conventional wisdom, at least in part. It does not contest the main criticisms of exclusionary zoning and other restrictive housing policies--that they exacerbate troubling inequalities across our metropolitan regions. (8) Instead, the Article seeks to decouple the assumed connection between the exercise of local power and exclusionary land use policies. And it questions the rush to adopt state-level land use laws that preempt local planning and zoning. (9)

The Article is organized around critiques of three pillars of the emerging land use reform consensus: centralization, deregulation, and mobility. As to the first, I argue that YIMBYism's anti-localism is a mistake. State and federal interventions into local land use have, at best, a mixed history. (10) State forays into local land use decisionmaking have either failed to achieve meaningful gains or (in the case of urban renewal) have dramatically worsened the problems of socioeconomic segregation. To be sure, exclusionary zoning in the suburbs has detrimental effects, but there is no reason to believe that a state's land use regime--even one motivated by an affordability impulse--will not come to reflect similar political pathologies. Suburbanites dominate state legislatures. State-dictated policies have created the conditions under which residential socioeconomic and racial segregation have flourished. And state law regularly prevents local governments from adopting their own affordable housing policies, not to mention other policies intended to address economic inequality. Affordable, desegregated housing is a laudable--even essential--goal. But combining it with an anti-local agenda by further restricting cities' already-limited powers is a strategic mistake. In light of this history and the entrenched interests in the states, housing and poverty advocates should be demanding more local control over land use, not less.

The second pillar of the emerging land use reform consensus is deregulation. While supply-oriented reformers often combine land use reform with affirmative duties to subsidize or build low-income housing, much of current policy advocacy has a decidedly free market orientation, emphasizing in the first instance the elimination of barriers to the construction of new market-rate housing. (11) The coincidence of centralized policymaking and deregulation should raise concerns that state-level land use reform will mostly redound to the benefit of investors and developers and not to those residents with limited resources who seek to afford to remain in place. No doubt, those in the market for housing--including middle-class families, recent college graduates, and young families--are often priced-out of high-cost urban housing markets. But reformers should be careful not to equate their interests with those of the working-class and especially minority poor, who have always struggled with unstable and expensive housing regardless of the local or regional land use regime. Those communities have reason to be skeptical of land use policies that encourage (and often subsidize) market-rate development; "growth" policies have rarely worked for them before. (12)

To be sure, land use reform has been and currently is promoted as a means to address metropolitan-area inequalities, to break down the barriers that usually lock poorer and minority residents in neighborhoods far from jobs, in places with weak or failing schools. (13) It is notable that local land use--and single-family zoning in particular--has become a central focus for those pursuing this equal opportunity agenda. (14) But the strategy of dispersing and deconcentrating what would have been previously called the "ghetto" by opening up wealthier enclaves to low-income housing--though a legitimate regional equity concern--represents an up-by-your-bootstraps approach to poverty alleviation. Policymakers' emphasis on land use reform and "moving to opportunity" (15) suggests that poverty alleviation is mostly about getting families out of poor jurisdictions and into richer ones, in large part so that poor children may take advantage of superior educational opportunities. (16)

This embrace of mobility is the third pillar of the new land use reform consensus, and it too should raise concerns. (17) Government efforts to address the problem of economic inequality are badly needed, but land use reform seems unlikely to meet the high aspirations set for it. Regionalists' efforts to break down barriers between suburbs and cities have produced little in the way of substantive gains over the last seventy-five years. (18) Perhaps that is because the massive demographic shifts required of such a program would be politically unpalatable, to both the poor minorities and middle-class white people forced to move or absorb new arrivals. It is also the case that the "suburbs" are no longer so monolithic in their whiteness and wealth; they have also not been immune to a decades-long austerity regime that has hollowed out the public sector everywhere.

The opportunity narrative's focus on reducing land use barriers is misplaced in another way. The question is not whether certain kinds of local land use restrictions are pernicious--in many cases, they are--but why in the first quarter of the twenty-first century, when rural, suburban, and urban inequality are all on the rise, (19) the preferred target of those seeking to address entrenched, racialized poverty is zoning.

Geographically inscribed inequality is a problem. But the rise in economic inequality in the last half-century may have little to do with individual families' inability to take advantage of educational opportunities, nearby jobs, or good public services. (20) Single-family zoning did not create the gap between rich and poor that is emblematic of this new gilded age, and access to the suburbs without more will not reduce that gap. The emphasis on breaking down barriers to mobility easily distracts from those substantive economic efforts like fair wage and hours reform; health care and paid leave; eviction and tenant protections; and labor rights--all of which can and have been pursued at the municipal level but which in too many cases are preempted by deregulatory state laws. (21) The anti-local thrust of the new zoning reform undermines those important efforts.

In this way, the new anti-zoning movement and the opportunity agenda run together--but at the cost of addressing some more salient features of an increasingly unequal economy. State-level land use preemption reduces locals' ability to extract concessions from mobile capital, undercuts local affordability efforts, and further constrains the ability for urban-based economic justice coalitions to exercise local power. The attraction of state-level reform is understandable, but its costs are high, and its benefits are questionable. Reformers would do better to focus on local policies and practices and pursue their affordable housing agenda in place. Public policy can be effectively made in cities, not simply to constrain them.

This Article has five remaining Parts. Part I describes the recent "rediscovery" of exclusionary zoning. Though reformers have long bemoaned suburban exclusion, the emerging anti-zoning consensus is a response to metropolitan area housing demand and is thus the mirror image of the mid-century suburban housing demand that drove the previous pro-zoning consensus. (22) The combination of white, middle-class need, property rights libertarianism, the renewed desirability of central city locations, and heightened racial justice concerns has seeded this current anti-zoning moment. (23) But this moment is not so different from the zoning revolution that preceded it...