The Impact of Restrictive Zoning Ordinances on Economic Mobility: A New Urban Institute Study

By: Paige Panek, Research Associate, Partnership for Strong Communities

Racial discrimination and poverty have historically resulted in neighborhoods lacking quality services, such as public schools, grocery stores, and parks and recreation facilities. This is problematic in part because research shows that living in a better-resourced neighborhood, especially for children, leads to improved future economic outcomes. Historically and currently, our programs and systems are not robust enough to provide Black, Indigenous, and People of Color (BIPOC) and/or low-income households opportunities for upward mobility. As such, those with racial, socioeconomic, and other forms of privilege (i.e., those with the power to reverse systemic segregation) have a responsibility to use their privileges in a way that empowers and gives voice to vulnerable populations.

Only 2% of residential land in Connecticut (CT) is zoned to allow by-right construction—construction permitted without additional approval and/or hearings—of multifamily developments with 3+ units. Comparatively, 91% is zoned to allow by-right construction of single-family homes. A new Urban Institute study, “Bringing Zoning Into Focus,” highlights how this disparity in number-of-unit (NOU) zoning provisions has contributed to segregation in CT. This systemic segregation upholds numerous barriers to economic mobility for low-income households. It also hinders CT from reaping the benefits that come with economic integration. For us, economic integration means equal access to the benefits that come with living in CT (e.g., infrastructure, programs, health and wellness opportunities, etc.) regardless of one’s economic standing.  

When everybody has equal financial footing flow chart

How do Number-of-Unit Provisions Perpetuate Economic Segregation? Zoning restrictions such as minimum lot sizes, building height restrictions, minimum parking requirements, and number-of-units permitted per parcel of land collectively impact housing affordability. NOU provisions specifically impact the cost of housing because they determine how many households will share the cost of land, development, and property taxes. For example, in some localities, a CT household can purchase the same size home for $70,000 to $100,000 less in areas that allow 4+ units per parcel than in areas that only allow single-family housing.

As a result, lower income households have fewer living options and have no choice but to reside in areas with denser NOU provisions, which are primarily in CT’s cities. This ultimately results in economic segregation, as lower income households are forced into cities while wealthier households have the opportunity to choose where they live throughout the state. While living in CT’s cities allows easier access to employment opportunities, public transit, and walkability, rents in these areas are higher than in suburban and rural areas. This can induce a poverty trap where individuals without the income and/or credit needed to purchase a home are forced to pay more for housing in areas where rentals are abundantly available. By forcing low-income households into cost-burdened rental situations (i.e., paying 30% or more of one’s income to housing and associated costs), NOU provisions create barriers to economic stability and mobility.

            How do NOU Provisions Perpetuate Racial Segregation? There are no zoning districts in CT that have a greater population of Black or Hispanic residents than White residents; NOU provisions contribute greatly to this. The Urban Institute found that CT households in single-family zones are more likely to be White and have higher incomes, home values, and education levels compared to those living in multifamily zones. This even holds true within zoning districts. In CT’s largest cities, 50% of those living in single-family zones are White, while only 25% of those living in 4+ unit zones are White. Given that race and education levels are tightly associated in CT, stable income and homeownership are privileges reserved primarily for White households. As previously discussed, NOU provisions economically segregate low-income households into CT’s cities where dense housing is available. Understanding that a majority of CT’s low-income households are BIPOC, it is plain to see that NOU provisions perpetuate racial segregation.

There’s Already a Lot of Land That Allows Construction of 4+ Units Per Parcel, is That Not Enough? Even in areas zoned to allow construction of 4+ units per parcel, landowners do not always build up to the maximum number of units permitted. The Urban Institute found that in CT, of the developments in 4+ unit areas, a minority of them have more than 5 units. Additionally, in suburbs and rural areas that allow for by-right construction of 2+ or 3+ units, 70% of the land is still utilized for single family homes. Whether done on purpose or due to lack of awareness that a greater number of units could be built, CT’s current zoning provisions do not do enough to encourage or incentivize using land to its fullest extent.

But What About the Localities that Allow Construction of 4+ Units Per Parcel After a Public Hearing? They’re Not Perpetuating Segregation, Right? While allowing multifamily housing after a public hearing does not overtly deny 4+ units per parcel, the reality is that it does not always result in dense housing opportunities. In 2021, New Haven, Hartford, and Fairfield Counties, which have the most land zoned for by-right construction of 4+ units, issued 729 more permits for developments with 5+ units than all other CT counties combined. While the lack of new construction multifamily housing in smaller localities and rural areas could be due to a myriad of things, having land zoned to allow 4+ units only after a public hearing does virtually nothing to provide more housing. Such a policy is simply a covert, more politically-correct way to arrive at the same outcome—forcing CT’s low-income households out of their area and concentrating them in areas that allow by-right construction of 4+ units, thus perpetuating economic and racial segregation.

Where do we go from here? The Urban Institute’s findings do not paint an optimistic picture of housing in CT, but understanding NOU zoning provisions and systemic segregation is the first step to tangible change. Step one complete! The good news is, there are many directions we can go from here. One possibility is implementing state-level mandates for by-right construction of developments with 4+ units on more of CT’s land. Another possibility is enforcing multifamily housing production targets that are specific to each locality and their circumstances. Regardless, more legislative change and oversight is needed to ensure that localities are not circumventing the obvious need for affordable housing in their jurisdiction. Doing so will provide a greater number of residents with more options for where they can live and more opportunities to take advantage of the benefits that come with living in CT. It will also create a more economically and racially diverse state, which is something we will all benefit from.

References:

https://www.cnn.com/2017/03/28/us/urban-institute-cost-of-segregation-study/index.html

https://www.planning.org/planning/2021/winter/eliminating-racial-segregation-is-good-economic-policy/

https://housingprofiles.pschousing.org/profile/#Avon

https://www.epi.org/publication/modernsegregation/https://www.epi.org/publication/modern-segregation/

https://www.urban.org/racial-equity-analytics-lab/structural-racism-explainer-collection/causes-and-consequences-separate-and-unequal-neighborhoods

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Paige Panek, Research Associate, Partnership for Strong Communities
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