It Is Time To Exclude Exclusionary Zoning From America’s Housing Policy

The Painted Ladies in San Francisco, California, one of the most expensive rental markets in the United States. Photo by Ross Joyner.

The San Francisco Bay Area is one of the world’s largest technology and innovation hubs. Known for the several Fortune 500 companies and research universities it hosts, the Bay Area consistently ranks at the top of America’s most expensive places to live, and for good reason. Between December 2020 and 2021, the median sale price for an existing single-family home rose from $939,000 to $1.1 million. This increase is part of a broader housing crisis, marked by high housing costs and a shortage of affordable homes, which the Bay Area has faced since the 1990s. Strict exclusionary zoning laws have been a primary cause behind the region’s dilemma. 

Zoning is the act of dividing a city, town, or borough into areas reserved for different purposes, such as residence or business. Exclusionary zoning contains requirements in many categories, including land use and building codes, that limit affordable housing construction and bar low-income people from affluent neighborhoods. These laws continue to facilitate racial and economic segregation in the Bay Area, and their extreme impact on local communities underscores the need to end exclusionary zoning nationwide.

The History of Exclusionary Zoning

Local governments introduced the first exclusionary zoning ordinances in the early 1900s. At the turn of the 20th century, an influx of immigrants into American cities prompted local communities to pass laws keeping racial and ethnic minorities out of middle-class and upper-class neighborhoods. In 1917, the Supreme Court reviewed a Louisville city ordinance prohibiting the sale of property to Black Americans in Buchanan v. Warley, ultimately declaring that this racial zoning was unconstitutional because it breached individuals’ freedom of contract under the 14th Amendment’s Due Process Clause. Before the Court’s decision, city zoning ordinances across the country forbade minorities from occupying majority-white blocks. Buchanan v. Warley was the first in a series of landmark cases challenging the legality of exclusionary zoning that ultimately paved the way for the passage of the 1968 Fair Housing Act.

In 1922, the Department of Commerce published the Standard State Zoning Enabling Act, which established the institutional framework for zoning ordinances, delegating zoning power and guidelines to local authorities to conserve community welfare. Four years later, the Supreme Court found zoning to be a constitutional exercise of municipalities’ police power in Village of Euclid v. Ambler Realty Co. During America’s rapid suburbanization in the 1950s, exclusionary zoning ordinances exploded in number, complexity, and stringency. The number of jurisdictions with such regulations increased to over 5,200 by 1968.

When Congress finally passed the Fair Housing Act, it eliminated multiple forms of exclusionary zoning by prohibiting housing discrimination based on race, religion, national origin, sex, and, as amended, ability, and familial status. However, Congress failed to address one major issue: class-based discrimination. Because the Fair Housing Act does not explicitly prevent housing discrimination based on income, predominantly high-income (and white) neighborhoods have exploited this loophole to prevent low-income individuals from moving into their communities. The Supreme Court eventually institutionalized this loophole in its 1977 decision in Village of Arlington Heights v. Metropolitan Housing Development Corp. The Court upheld a Chicago zoning ordinance barring the construction of multi-family housing facilities in the center of the Arlington Heights suburb because there was no proof that “discriminatory purpose was a motivating factor in the Village’s decision.” 

The Court’s most recent decision implicating exclusionary zoning came in 2015. In Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, the Court affirmed that the Fair Housing Act prohibits intentional discrimination and policies that have a “disparate impact” on minorities. Although such policies do not have a stated intent to discriminate, they have the effect of discriminating against a protected class. 

Class-based exclusionary zoning laws fall into this category of “disparate impact.” While not as overt as zoning policies pre-Buchanan, class-based exclusionary zoning contributes to similar patterns of racial segregation. Because racial minorities are more likely to have lower incomes, class-based discrimination tends to impact them disparately.

Forms of Exclusionary Zoning

Exclusionary zoning restrictions fall primarily into two categories: density controls and direct cost increases.

Density controls limit the number of people living in a specific residential area by constraining the supply of housing units through restrictions on multi-family residential dwellings and lot size. These restrictions cap the total size of buildings, such as apartment complexes, which limits the number of units that developers can build within each building. Therefore, these policies reduce the number of new units entering the housing market, and rents remain high and out of reach for many low-income people.

For instance, the city of Cupertino, Apple Inc.’s home base, places height restrictions on apartment buildings, limiting them to no more than two stories. It also requires two parking spaces per unit of multi-family housing. Developers are incentivized to save money by building multi-family dwellings with fewer units because parking lots consume a lot of land and land costs. Lot requirements, which set the amount of square footage each housing unit must have, additionally strain the housing supply. In some Cupertino residential districts, a single-family home must have at least 1000 sq. feet of space per individual; a traditional four-person home would need to be on a 4000 sq. foot lot. In neighboring Atherton, the minimum lot size is an astonishing one acre (43,560 sq. feet), a requirement that has all but guaranteed that only the wealthy can afford to build and live in America’s priciest zip code.

Direct cost increases result from the myriad regulations developers face when constructing new housing. Fees for land use, building permits, certificates of occupancy, and legal filings drain builder profits and company resources and lengthen the time it takes to build new developments. These additional costs are passed on to consumers, escalating market values to levels inaccessible for low-income people.

This color-coded map, published by UC Berkeley’s Othering & Belonging Institute, shows where single-family residential zoning constitutes more than 85 percent of all residential zoning in different Bay Area municipalities.

Supply and Demand

According to the U.S. Census Bureau, fewer homes were built from 2010 to 2019 than in any decade since the 1960s. The ongoing housing shortage is increasing due to the COVID-19 pandemic. FreddieMac estimates suggest that the shortage jumped by 52 percent, from 2.5 million homes in 2018 to 3.8 million in 2020. Now America’s largest generational cohort at 72 million individuals, millennials are caught in America’s growing housing supply deficit. 

First-time homebuyers usually look for “entry-level” homes below 1,400 sq. feet. Unfortunately, entry-level home construction has declined since the mid-1970s and is now near a 50-year low. In the 1980s, 40 percent of all homes built were entry-level. Today, that number is down to 7 percent. Lot requirements inhibit the construction of these smaller starter homes.

This graph, published by FreddieMac, indicates an increase in the homeownership rate of 25-34 year-olds, a subset of the millennial age cohort.

NIMBYism and Racial Segregation

Supporters of exclusionary zoning tend to live in well-off neighborhoods. The label “NIMBY,” which stands for “Not in My Back Yard,” is used for these individuals who oppose new housing developments near their homes. Most NIMBY residents organize in affluent counties in the Bay Area to oppose denser or more affordable housing proposals. They often express their opposition as concerns about crime, congestion, schools, property values, quality of life, and neighborhood character. Over the past decade, several NIMBY residents have successfully gotten elected to city councils, from where they have been able to kill or delay affordable housing legislation and propose exclusionary zoning policies.

Exclusionary zoning is intertwined with racial division. In the Bay Area, 67 percent of cities with more than 10,000 people have medium to high levels of single-family zoning. Single-family zoning is a form of exclusionary zoning that only allows single-family detached homes and excludes townhomes, duplexes, and multi-family housing from being built on any plot of land with this zoning designation. The more single-family zoned a community is, the whiter it tends to be. For example, white people make up 36 percent of the population in cities with low single-family zoning levels. This number increases to 55 percent in high single-family zoned cities. This statistic agrees with the general observation that single-family zoning reduces housing stock and makes housing prices unaffordable for low-income families, most of whom happen to be non-white. 

Conversely, these low-income families make up 63 percent of low single-family zoned neighborhoods and 45 percent of high single-family zoned neighborhoods. Of the 6.9 million people living in Bay Area cities, just 13 percent reside in high single-family zoned communities. Exclusion drives exclusivity.

This bar graph displays municipal differences in levels of racial composition based on the degree of single-family zoning. Image created by Max Hermosillo (CC ’25) using data from UC Berkeley’s Belonging & Othering Institute.

Dismantling Exclusionary Zoning

Repairing the damage of exclusionary zoning begins with targeting single-family zoning restrictions. In other words, it requires reforming the way suburbs are built and maintained by tackling NIMBYism head-on. California has taken a step in the right direction by passing S.B. 9: California Housing Opportunity and More Efficiency (“HOME”) Act, which went into effect on January 1, 2022. The law enables homeowners to split their single-family residential lot into two separate lots and build up to two new housing units on each lot. S.B. 9 is the most significant reform to single-family zoning in the state, however, the policy has its limitations. For one, homeowners must comply with local zoning requirements when developing a duplex on their property, as long as the requirements do not physically preclude a lot split or duplex. Additionally, S.B. 9 only applies to lots located in jurisdictions that are part of an urbanized area or urban cluster, as designated by the U.S. Census. This means that only neighborhoods that meet specific population and density thresholds are subject to S.B.9. 

A second way to dismantle exclusionary zoning is to practice upzoning. Rather than eliminating single-family neighborhoods, upzoning increases urban densities often by relaxing zoning codes’ height requirements or increasing floor area ratios—the ratios of a building’s total usable floor area to the total area on which the building stands. Upzoning is promising but controversial. Proponents argue that upzoning improves housing affordability by increasing the housing supply. Opponents counter that upzoning incentivizes landlords of upzoned buildings to sell their properties at inflated prices, reflecting their added economic potential. 

Single-family zoning reform and upzoning are solid local strategies, but the federal government must play a more significant role to uproot exclusionary zoning nationwide. When President Biden announced his American Jobs Plan, an infrastructure and climate change proposal eventually integrated into the now-dead Build Back Better Act, his administration drew attention to the Unlocking Possibilities Program. This program would provide a $5 billion competitive grant to localities that remove exclusionary zoning policies. Although fairly modest, the Unlocking Possibilities Program would be the federal government’s most considerable effort to assist its state and local partners. 

Still, the risk of potential political blowback from suburban voters suggests that President Biden and the Democratic Party are unlikely to highlight this proposal soon, especially as the midterms approach. However, the federal government should not relinquish its role in the fight to end exclusionary zoning. With economic segregation on the rise, now is the moment for all levels of government to work together to tear down the walls that shut out thousands of individuals from communities with high economic and social potential. The thorn of exclusionary zoning is wedged firmly into America’s housing policy. It’s time to pull it out. 

Max Hermosillo (CC ’25) is a staff writer at CPR and a Political Science major from San Jose, California. His interests include Marvel, Hispanic literature, and constitutional law.