As ‘Blue’ States Rezone Their ‘Red’ Suburbs, It’s Not Really About ‘Affordable Housing’

A site plan for the city of Capistrano's new city hall, with a new affordable housing complex next to it. Screenshot via the City of San Juan Capistrano

Commentary

A recent opinion piece in The New York Times titled “The Era of Shutting Others Out of New York’s Suburbs Is Ending“ discussed a growing trend among state legislatures, particularly in ”blue” states, to force changes in local zoning laws in the suburbs to allow more multifamily housing.

The zoning changes to combat what the Biden administration calls “exclusionary zoning” are high on President Joe Biden’s governing agenda, and he included it in his original $2.3 trillion infrastructure bill. A White House fact sheet states:

“For decades, exclusionary zoning laws—like minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing—have inflated housing and construction costs and locked families out of areas with more opportunities.”

The blog of the White House Council on Economic Advisers couched “exclusionary zoning” in racial terms in this statement:

“Exclusionary zoning laws place restrictions on the types of homes that can be built in a particular neighborhood. Common examples include minimum lot size requirements, minimum square footage requirements, prohibitions on multi-family homes, and limits on the height of buildings. ... Zoning laws have been used to discriminate against people of color and to maintain property prices in suburban and, more recently, urban neighborhoods.”

The impetus for these initiatives seems to come from The Century Foundation, a Washington and New York nonprofit that bills itself as “a progressive, independent think tank that conducts research, develops solutions, and drives policy change to make people’s lives better” and pursues “economic, racial, gender, and disability equity in education, health care, and work.”

The Century Foundation and the opinion piece from The New York Times both couched so-called exclusionary zoning in racial terms almost the same as “red-lining,” the now-illegal bank practice of refusing to make mortgage loans to black homebuyers in white neighborhoods.

A Baleful History of Discrimination and Segregation in Housing

There’s little doubt that U.S. housing policy was historically racist. New Deal programs such as the Federal Housing Administration (FHA), created by President Franklin Roosevelt to guarantee mortgage loans for home ownership, allowed tens of millions of Americans to buy their first homes. For most, those homes were the first real property ever owned in their family after generations of U.S. citizenship.

But the FHA lending rules were avowedly racist and blatantly segregationist. A 1936 manual for FHA underwriters, for example, described “infiltration” by “inharmonious racial groups.” It also stated that “if a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes” and warned against an “incompatible racial element” in public schools.

Shamefully, the bigotry continued after World War II. Returning black veterans were largely denied benefits—ostensibly available to them as a reward for their military service—by insidious means. Veterans Administration (VA) loans, for example, were underwritten by the VA, but they first had to be made by private financial institutions that discriminated on the basis of race.