American Nightmare. Randal O'Toole
can protect themselves from turning interior common areas into pathways for crime; without such common areas, there would be no need for gated communities. The first planned community with a common area, Llewellyn Park, is a gated community, and no one from outside the community, except guests of the residents, may visit the common areas without written permission from the community association.33
One constant in Nichols’s deed restrictions was a provision forbidding homeowners to sell to blacks and, in his early developments, Jews. Some writers have challenged the entire idea of protective covenants based on the fact that some of them included such racial restrictions.34 Although America’s racist past is shameful, covenants and deed restrictions can’t be blamed for it any more than today’s transit agencies can be blamed for the Montgomery, Alabama, bus company that was required by Jim Crow laws to order Rosa Lee Parks to sit in the back of the bus.
Racial restrictions were actually rare to nonexistent in protective covenants before 1908. Instead, developers implicitly assumed that other restrictions, such as minimum-cost requirements for homes, would effectively prevent blacks and other minorities from moving into their subdivisions.
Zoning and Land-Use Restrictions
The City of San Francisco first introduced racism into land-use rules in 1885, when it tried to restrict the mobility of Chinese by banning public laundries from most of the city. Even though the ordinance was overtly race neutral, the Supreme Court ruled that it violated the Fourteenth Amendment to the Constitution.35
In 1910, Baltimore wrote a zoning ordinance that excluded blacks from any block on which more than half the residents were white and excluded whites from blocks where half the residents were black. Baltimore’s mayor Barry Mahool, a prominent member of the Progressive Party, commented that “Blacks should be quarantined in isolated slums in order to reduce the incidents of civil disturbance, to prevent the spread of communicable disease into the nearby White neighborhoods, and to protect property values among the White majority.” Birmingham, Alabama; Richmond, Virginia; St. Louis, Missouri; and other cities wrote similar ordinances.36 When the ordinance for Louisville, Kentucky, reached the Supreme Court, the Court unanimously ruled in 1917 that such zoning rules were unconstitutional. After that ruling, southern cities practiced “expulsive zoning,” which allowed intrusive uses in black neighborhoods that were forbidden in white neighborhoods.37
The Supreme Court’s ruling against racial zoning spurred developers to add such racial restrictions to the deeds for more planned developments. In 1928, a legal scholar named Helen Monchow reviewed the deed restrictions for 84 different developments and found racial restrictions in 40 of them, none of which dated before 1908.38 Over time, the percentage probably increased until 1948, when the Supreme Court effectively invalidated such restrictions by ruling that the courts could not enforce them.39
Although deed restrictions preceded zoning by hundreds of years, such restrictions only applied to new developments. Zoning was conceived in the early 20th century as a way of providing the same stabilization of property values to existing neighborhoods. Although New York City is credited for passing the first comprehensive zoning ordinance in 1916, Los Angeles actually passed the first zoning ordinance in 1909—the difference being that the New York ordinance included height limits and setback requirements, while Los Angeles’s original ordinance only regulated use.
L.A.’s 1909 ordinance designated certain areas residential, light industrial, and heavy industrial, while it left other areas unzoned. By 1915, the city had created as many as 27 different zones. Unlike most modern ordinances, the Los Angeles rule did not include a grandfather clause, so businesses that found themselves in an area zoned residential were forced to move. A 1915 Supreme Court ruling upheld this policy as a way of dealing with nuisances.40
While deed restrictions responded to the market, zoning responded to political pressures. Many landowners anticipated that commercial and multifamily zones were more profitable than single-family residential and lobbied to have their properties zoned for the higher-value uses. Such lobbying led to systematic errors in the allocation of land to various uses.41
“By the time less than half the city [of Los Angeles] was zoned, it became obvious that three or four times as much property had been zoned for commercial use as could ever be used and that such zoning often blighted the property as owners waited for commercial development that would never come,” reports Robert Alexander, an architect who worked with L.A.’s planning agency in the 1940s. This imbalance was never corrected, and in 1989 the 82-year-old Alexander stated that the city still had too much land in commercial and multifamily zones.42
Los Angeles is not the only city to have overzoned for multifamily housing. During the 1920s, as cities were passing their first zoning ordinances, realtors used their political muscle to promote the allocation of more land to multifamily zones. For example, Portland, Oregon’s first zoning ordinance, enacted in 1920, put most of the city’s residential neighborhoods into a single-family-housing zone. Under pressure from realtors, the ordinance was referred to the voters, who narrowly defeated it. Realtors then campaigned for a new ordinance that included far more land in multifamily housing, which was passed in 1924.43 The city ended up with a surplus of multifamily housing, relative to single-family homes, that lasted at least into the 1990s.44 Similarly, in 1960, so much of Staten Island was zoned for multifamily housing that it had a capacity for 7.4 million people; its actual 1960 population was about 222,000; by 2010, it still had only about 480,000.45
Zoning conferred so much power on public officials that it soon became a major source of corruption. In 1938, Los Angeles recalled Mayor Frank Shaw from office for, among other things, “buying and selling of planning permits, spot zone changes, and variances.”46 Nearly 30 years later, a writer for Harper’s magazine was doing research on corruption in zoning. A developer told him that, thanks to a history of bribery, “We know where we stand now—$25,000 for zoning for a trailer park in this country. Why upset things by talking about it?”47
The deed restrictions of planned communities protected the middle-class residents of many of those communities from intrusions by working-class families by such means as forbidding chickens and other domestic animals other than cats and dogs; prohibiting boarders; and restricting in-home businesses, all things more commonly found in working-class homes than in middle-class homes.48 Developers who were building communities for working-class families obviously would not include such restrictions in their deeds, and working-class homebuyers could find plenty of neighborhoods that had no restrictions at all.49
Zoning changed all that. Zoning boards and planning staffs, dominated by middle-class planning advocates, didn’t hesitate to blanket entire cities with residential zones that forbade working-class practices and habits. By 1930, 981 cities and towns, including nearly 2 out of 3 of the 250 largest American cities, had passed zoning ordinances affecting a total of 46 million of the nation’s 123 million people.50 In many cases, these ordinances helped to price many working-class families out of the market for single-family homes.
“The basic purpose of suburban zoning was to keep Them where They belonged—Out,” says Rutgers planning professor Frank Popper. “If They had already gotten in, then its purpose was to confine Them to limited areas. The exact identify of Them varied a bit around the country. Blacks, Latinos, and poor people always qualified. Catholics, Jews, and Orientals were targets in many places.”51
An analysis of land values before and after Chicago passed its comprehensive zoning ordinance in 1923 found that zoning significantly increased property values, and the greatest increases were in residential areas that were zoned exclusively for residential use. Although Chicago’s commercial zone allowed either commercial or residential use, giving landowners more options, the exclusivity of the residential zone apparently made it more valuable.52
The effect of such zoning made housing more attractive to middle-class buyers and less affordable for working-class buyers. An analysis of mortgages in Paterson, New Jersey, by sociologist Helena Flam found that the share of loans to middle-class homebuyers increased from 39 percent in the early 1890s to 45 percent in the mid-1920s.53