How To Reinvent Zoning To Rid Housing Of Racial Inequity

The term "equity's" has got its work cut out for it.

We wrote recently about it here.

Equity. It's one of the English language's magical words, like now, as never before, with a minimum of three meanings, each evolving at the heart of business, society, and culture. In an ESG-focused business and investment environment -- stemming in large part from the seizure of agency of stakeholders that include talent, customers, business partners, investors, local officials, etc. -- equity meaningfully drives value towards the commons, a wider universe of owners.

We believe that. It's not a fuzzy B.S. word. It's not a euphemism, masking a political agenda. It's, in essence, a mathematical characterization of value, spread across stakeholders.

Some disagree. Like Wall Street Journal commentator Daniel Henninger, who argues that equity is nothing more than political narrative.

“Equity” is wealth redistribution, or soft socialism, repackaged as happy talk.

Rather, the mathematical and economic meaning of the term, and its core sense of the notion of value, can truly become a measure of progress, and a proof-case that housing is a solution that measurably expands value to include more of society that needs it.

Equity is at the center of this analysis, from Brookings Institution non-resident senior fellow Lance Freeman, "Build race equity into rezoning decisions."

The opportunity-area to apply equity as a measurable increase in economic value, Freeman writes, lies within a recognition of an unacceptable by-product of current zoning rules, laws, and practices. Freeman notes that these practices have been handed down through a few generations in ways that ham-handedly veil prejudicial, exclusionary, and self-perpetuating societal imbalance – locking out equity.

Americans still reside in neighborhoods significantly divided by race. and to a lesser extent class.

In a fast-forward history of the evolution of zoning, Freeman looks at land-use rules' emergence in Europe in the 1800s, and some darker iterations of their application in North America – blatant in the early days, and more nuanced in recent times, but nonetheless, biased.

Since the early 20th century, zoning has continued to be a tool used to separate the poor, who are disproportionately people of color from certain neighborhoods. This can be done, for example, by allowing only single-family homes or homes on large lots, both of which will exclude more affordable housing.

In an effort to reframe the challenge of structurally racist and classist zoning practices – camouflaged, more or less successfully, in present-day use – Freeman proposes stakeholders at the local zoning policy and real estate development level to bake in economic equity impact assessments as projects map through approvals. Environmental Impact Statements, a headache that has evolved into an opportunity to prove out positive and constructive effects of potential projects, stand as an example for how to retool zoning and land-use processes and practices for more just and equitable decision-making.

Freeman writes:

Major land use changes could also require a racial equity analysis. The scope of such analyses could include how the costs and benefits of such an action are distributed across racial/ethnic groups, the risks of displacement disaggregated by race/ethnic group, and how the proposed development would relate to current residential segregation patterns.

As an example, imagine a low-density neighborhood that is rezoned to allow increased density. The neighborhood is predominantly white in a fairly segregated city. The rezoning is part of a proposed development that will include new market rate units. An EIS would require the developer to show how the new development will impact the environment, considering impacts on sensitive land uses, air quality and the like. A racial equity analysis would look at the likely racial composition of the new development, whether or not displacement was likely to occur, and if so in a racially disparate manner. The analysis would also take into consideration how the anticipated demographic composition of the new development would influence existing residential segregation patterns.

Zoning and equity. They're really inseparable. They're housing's most urgent, broken challenges of the 2020s and the 2030s and beyond. And, like environmental impacts, they're deep, deep wells of enormous business opportunity.

Time will tell. Capital investment, political will, business innovation, and the transparency and immediacy of information appear to be macro forces pushing humans toward expansion rather than diminution of equity.

Which pressures will win out?

Equity is not narrative. It's business. Don't let the term get hijacked and held for ransom by those who'd rather dig their heels in and keep things as they are.

Join the conversation