Boosting Profits: Why Developers’ Cry to ‘End Exclusionary Zoning’ is a Hoax

They say such zone changes would promote racial equity, transit ridership, climate change mitigation, and intergenerational wealth transfer among minority families. In contrast, I say these are transparent cover stories, and the real reason they use the term exclusionary zoning is that existing zoning limits their ability to maximize profits. 

This mantra now resonates through the White House, Congress, State Capitols, City Halls, and editorial pages, with little thought about it long-term consequences. By exclusionary zoning the developers and their allies focus on residential zoning laws whose hidden agenda was, they say, the exclusion of minorities by requiring large lots and setbacks. These zoning laws were then reinforced by five other processes, four of which have been expressly banned by the Supreme Court or Congress. 

• Restrictive racial and religious covenants that barred housing sales to specific groups were barred by the Supreme Court in 1948 and by Federal Fair Housing Act of 1968. 

• Redlining by lending institutions, that would only grant mortgages to specific racial groups in specific neighborhoods, ended in 1968 through the Federal Fair Housing Act. 

• Federal Government housing programs that discriminated against minorities were banned in 1988. 

• Discrimination by sellers who steered potential buyers to specific neighborhoods depending on their race or religion was barred in California in 1959 and nationwide in 1968. 

• Police harassment of Blacks and whites who crossed the geographical color line was standard practice, including by the LAPD in Los Angeles. Despite mass movements, such as demonstrations in all 50 states against the police murder of George Floyd in Minneapolis, police violence against minorities has obviously continued. Studies reveal it is most common in the border areas between predominantly black and predominantly white neighborhoods. 

Except for police violence, these practices have been formally banned and rarely appear. The lingering question is, therefore, what impact do old zoning laws and practices have on the current demographic composition of neighborhoods in an ethnically diverse city, like Los Angeles, in which the City Council adopted most zoning laws 75 to 90 years ago. 

The advocates of up-zoning say, axiomatically, that historic zoning laws are responsible for current racial and ethnic patterns. They also claim that up-zoning single-family lots automatically permits apartments, and this will reverse the lingering effects of historic zoning laws. They also claim that up-zoning promotes equity and the intergenerational transfer of wealth in minority families. 

There are many problems with this story. A closer look reveals that up-zoning, whether imposed by the Biden Administration, California State Legislature, or Los Angeles City Council, does not reverse racism. In fact, if up-zoning laws were monitored, the data would reveal that up-zoning increases economic and racial inequality. This is why: 

1. Up-zoning has not and will not increase the supply of low-priced housing or increase transit ridership. This is because up-zoning allows more land uses at existing sites, plus larger, taller, denser buildings. As a result, property values surge, enriching existing property owners when they flip their parcels or redevelop them. Furthermore, infill residential buildings require the demolition of existing homes and small apartment buildings, eliminating existing low-priced housing and its long-embedded carbon. When new market rate McMansions and apartment buildings finally enter the market, few of those who can afford to rent or buy them use mass transit. As a result, expensive housing pulls up the price of existing housing and eliminates low-priced housing. 

2. A recent Brookings Institute study examined neighborhood in Los Angeles that were originally redlined to contain African American communities. In LA those historic Black neighborhoods now house 40,000 residents who are Black, and 580,000 who are not. These enormous changes include the movement of Blacks into white neighborhoods and Latinos into once segregated Black neighborhoods, which are now 70 percent Latino. Most importantly, these major demographic changes took place in Los Angeles without any changes to zoning laws. 

3. The exclusionary zoning mantra misrepresents zoning laws because all zoning is exclusionary. The online summary of the Los Angeles zoning code makes this obvious. Los Angeles is now divided into 46 zones. Each zone restricts the size of lots, the use of land, the height of buildings and/or stories, and required yards. As a result, the City of Los Angeles legally excludes specific uses, buildings that are over specific heights/stories, and buildings that do not provide specific front, rear, and side yards over its entire 469 square miles. Even “inclusionary” zoning, which does not exist in Los Angeles, follows these rules. Inclusionary zoning automatically requires low-priced housing in new apartment buildings, but within the legal requirements for lot size, heights/stories, density, and yards. 

4. Supply-and-demand evidence for up-zoning does not exist. There are no facts to back up the up-zoners’ claim that building more market housing (eventually) creates more low-priced housing. It is easy to over-build expensive apartments and create a housing glut. It is happening in Downtown Los Angeles, Koreatown, Miracle Mile, Hollywood, and Warner Center. But this boom in expensive housing has not lowered housing prices. After a year and a half of Pandemic and the departure of 100,000 Angelenos over the past four years, homes and apartments are still overpriced. If we look back to expensive housing now more than 25 years old, it is the same story. It is still expensive. 

Even though the case for up-zoning falls apart when closely examined, this has not slowed down the efforts of elected officials to deregulate zoning, building, and environmental laws. Unencumbered by facts and monitoring programs that would reveal that their up-zoning programs are a hoax, they are barreling ahead. If they are lucky, the consequences of their folly will become undeniable after they are termed out. If not, the spinmeisters will need to burn the midnight oil to explain why their bosses’ best intentions went awry.

(Dick Platkin is a former Los Angeles city planner who reports on local planning issues for CityWatch.  He is a board member of United Neighborhoods for Los Angeles (UN4LA) and co-chairs the Greater Fairfax Residents Association. Previous Planning Watch columns are available at the CityWatchLA archives. Please send questions and corrections to [email protected].). Image:  Jason Ford