As the Housing Crisis Deepens, Zoning Laws Are in the Crosshairs

In December 2018, Minneapolis made news when it abolished single-family zoning. That began a nationwide conversation about the use of zoning laws to restrict growth and density at a time when housing affordability was worsening and homelessness was increasing.

One of our broker associates, Chuck Brown, attended the National Association of Realtors convention last November in San Francisco. I had attended the same convention there several years ago. I hadn’t noticed many homeless people on the streets back then, but Chuck reported that it was way out of control now, with the streets overcrowded with homeless people.

You, like me, have probably followed the coverage of homelessness in Denver, with that city passing an urban camping ban, which was ruled unconstitutional by a lower court but is still being enforced pending an appeal by the city. It could go all the way to the Supreme Court.

The conversation over zoning created by Minneapolis 13 months ago is growing louder. That’s because the history of zoning is one of intentional discrimination. In researching this topic, I read a Fast Company posting on the history of zoning in San Francisco.. After the 1906 earthquake, the Chinese population there was targeted by zoning changes designed to promote and protect white enclaves. This was long before there were federal laws making discrimination based on race or national origin illegal.

That Fast Company article included the following detail regarding the role of the mortgage industry: “In 1934, as part of President Roosevelt’s New Deal, the Federal Housing Administration (FHA) was established to insure private mortgages. The FHA’s underwriting handbook included guidelines that pushed cities to create racially segregated neighborhoods and encouraged banks to avoid areas with ‘inharmonious racial groups,’ essentially meaning any neighborhood that wasn’t exclusively white.”

Another New Deal program to help homeowners threatened with foreclosure to refinance their home with low-interest long-term mortgages, provided lenders with “safety maps” which used red shading for risky areas which were under “threat of infiltration of foreign-born, negro, or lower grade population.”  This is the origin of the term “redlining,” and the practice wasn’t outlawed until the Fair Housing Act of 1968.

Last week I attended a meeting of the Group Living Advisory Committee in Denver’s municipal building, where they are discussing a zoning amendment which would dramatically increase the number of unrelated persons who can live in a single family home. You can expect this proposal to arise in suburban jurisdictions, too, even if they don’t follow Minneapolis in getting rid of single-family zoning altogether.

I’ll be reporting again as this conversation evolves. Don’t shoot me. I’m just the messenger.