Advertisement

Capitalization and Exclusionary Zoning

  • Christopher SerkinEmail author
Chapter
  • 15 Downloads

Abstract

For decades, land use experts have wrestled with the problem of exclusionary zoning. Traditionally, the phenomenon has been characterized primarily by suburban communities using large-lot zoning and other density controls to reduce supply and drive up the cost of housing. Increasingly, however, zoning is blamed for the affordability crisis in many thriving cities. Some of the conventional legal tools for recognizing and responding to exclusionary zoning do not apply as well in cities, where minimum lot sizes and bans on multi-family housing are not the primary source of density limits. This chapter therefore provides a new lens for identifying exclusionary zoning, one that focuses on the economic effects instead of any particular characteristic. In particular, the chapter looks at the extent to which the economic values of public services like high-quality public schools are capitalized into property values. In the absence of supply restrictions, developers should satisfy consumer demand and compete away any premium associated with public services. Zoning, however, changes that dynamic, allowing services to be capitalized into property values. Affluent communities are not just exclusionary because they are expensive; they are expensive in part because they are exclusionary.

Notes

Acknowledgment

Thanks to Amnon Lehavi for his support, to Ronit Levine-Schnur for her careful comments, to participants at the 2018 Progressive Property Conference for their comments, and to Vid Sankar and Deborah Schander for their research assistance.

References

  1. Barseghyan, L., & Coate, S. (2016). Property taxation, zoning, and efficiency in a dynamic Tiebout model. American Economic Journal: Economic Policy, 8(3), 1–38.Google Scholar
  2. Been, V., Ellen, I., & O’Regan, K. (2017). Supply skepticism: Housing supply and affordability. Manuscript in preparation.Google Scholar
  3. Been, V., Madar, J., & McDonnell, S. (2014). Urban land use regulation: Are homevoters overtaking the growth machine? Journal of Empirical Legal Studies, 11(2), 227–265.CrossRefGoogle Scholar
  4. Crowley, S. (2003). The affordable housing crisis: Residential mobility of poor families and school mobility of poor children. Journal of Negro Education, 72(1), 22–38.CrossRefGoogle Scholar
  5. Eagle, S. J. (2017). Affordable housing as metaphor. Fordham Urban Law Journal, 44(2), 301–359.Google Scholar
  6. Ellickson, R. C. (1981). The irony of inclusionary zoning. Southern California Law Review, 54(6), 1167–1216.Google Scholar
  7. Euclid v. Ambler Realty, 272 U.S. 365. (1926).Google Scholar
  8. Fischel, W. A. (2005). The homevoter hypothesis: How home values influence local government taxation, school finance, and land use policies. Cambridge MA: Harvard University Press.Google Scholar
  9. Ford, R. T. (1994). The boundaries of race: Political geography in legal analysis. Harvard Law Review, 107(8), 1841–1921.CrossRefGoogle Scholar
  10. Furman, J. (2015, November). Barriers to shared growth: The case of land use regulation and economic rents. Remarks presented at the Urban Institute, Washington, DC. Retrieved from https://obamawhitehouse.archives.gov/sites/default/files/page/files/20151120_barriers_shared_growth_land_use_regulation_and_economic_rents.pdf.
  11. Ganong, P., & Shoag, D. (2017). Why has regional income convergence in the U.S. declined? Journal of Urban Economics, 102, 76--90Google Scholar
  12. Gillette, C. P. (2011). Local redistribution and local democracy: Interest groups and the courts. New Haven, CT: Yale University Press.Google Scholar
  13. Glaeser, E. L., Gyourko, J., & Saks, R. (2005a). Why have housing prices gone up? The American Economic Review, 95(2), 329–333.CrossRefGoogle Scholar
  14. Glaeser, E. L., Gyourko, J., & Saks, R. (2005). Why is Manhattan so expensive? Regulation and the rise in housing prices. The Journal of Law and Economics, 48(2), 331–369.CrossRefGoogle Scholar
  15. Goodman, A. C. (1983). Capitalization of property tax differentials within and among municipalities. Land Economics, 59(2), 211–219.CrossRefGoogle Scholar
  16. Gyourka, J., & Malloy, R. (2015). Regulation and housing supply. In G. Duranton, V. Henderson, & W. Strange (Eds.), Handbook of regional and urban economics (Vol. 5B, pp. 1289–1338). Amsterdam: Elsevier.Google Scholar
  17. Hamilton, B. W. (1975). Zoning and property taxation in a system of local governments. Urban Studies, 12(2), 205–211.CrossRefGoogle Scholar
  18. Holmes, R. C. (2013). The clash of home rule and affordable housing: The mount Laurel story continues. Connecticut Public Interest Law Journal, 12(2), 325–360.Google Scholar
  19. Jan, T. (2017, October 23). America’s affordable-housing stock dropped by 60 percent from 2010 to 2016. The Washington Post. Retrieved from https://www.washingtonpost.com/.
  20. Kain, J. F., & Quigley, J. M. (1970). Measuring the value of housing quality. Journal of the American Statistical Association, 65(330), 532–548.CrossRefGoogle Scholar
  21. Koschinsky, J., & Talen, E. (2015). Affordable housing and walkable neighborhoods: A national urban analysis. City, 17(2), 13–56.Google Scholar
  22. Kusisto, L., & Kamp, J. (2015, December 1). Some families earn six figures and still need help with the rent. The Wall Street Journal. Retrieved from https://www.wsj.com/.
  23. Oates, W. E. (1969). The effects of property taxes and local public spending on property values: An empirical study of tax capitalization and the Tiebout hypothesis. Journal of Political Economy, 77(6), 957–971.CrossRefGoogle Scholar
  24. Oates, W. E., & Fischel, W. A. (2016). Are local property taxes regressive, progressive, or what? National Tax Journal, 69(2), 415–433.CrossRefGoogle Scholar
  25. Rothwell, J. T., & Massey, D. S. (2015). Geographic effects on intergenerational income mobility. Economic Geography, 91(1), 83–106.CrossRefGoogle Scholar
  26. Sager, L. G. (1969). Tight little islands: Exclusionary zoning, equal protection, and the indigent. Stanford Law Review, 21(4), 767–800.CrossRefGoogle Scholar
  27. Schleicher, D. (2017). Stuck! The law and economics of residential stagnation. The Yale Law Journal, 127(1), 78–154.Google Scholar
  28. Schuetz, J., Meltzer, R., & Been, V. (2011). Silver bullet or Trojan horse? The effects of inclusionary zoning on local housing markets. Urban Studies, 48(2), 297–329.CrossRefGoogle Scholar
  29. Serkin, C., & Wellington, L. (2013). Putting exclusionary zoning in its place: Affordable housing and geographical scale. Fordham Urban Law Journal, 40(5), 1667–1695.Google Scholar
  30. Southern Burlington County N.A.A.C.P. v. Mount Laurel Tp., 67 N.J. 151, 336 A.2d. 713. (1975).Google Scholar
  31. Span, H. A. (2001). How the courts should fight exclusionary zoning. Seton Hall Law Review, 32(1), 1–107.Google Scholar
  32. Strahilevitz, L. (2003). Exclusionary amenities in residential communities. Virginia Law Review, 92, 439–498.Google Scholar
  33. Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), 416–424.CrossRefGoogle Scholar
  34. Yinger, J. (1982). Capitalization and the theory of local public finance. Journal of Political Economy, 90(5), 917–943.CrossRefGoogle Scholar
  35. Zodrow, G. R. (2014). Intrajurisdictional capitalization and the incidence of the property tax. Regional Science and Urban Economics, 45(1), 57–66.CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Vanderbilt Law SchoolNashvilleUSA

Personalised recommendations