August 27, 2023 Reading Time: 3 minutes

As an academic who has devoted an entire career to the study of markets with an emphasis on real property, I have reached a point where I am asked to offer insights on a variety of issues at both the local and national level. In recent years, rising home prices and rental rates have focused many of these discussions on the topic of housing affordability. Often reporters will close a session with the question “how do we fix the housing affordability problem?” In addition to simply offering my personal thoughts, I have a tendency (like many long serving faculty) to point reporters to data sources or other readings on the topic. Until I picked up a copy of M. Nolan Gray’s Arbitrary Lines: How Zoning Broke the American City and How to Fix It, I did not have a “go to” recommendation on the topic. This book has the potential to at least get the reader thinking about housing markets and potential solutions to affordability and other housing related issues in a somewhat different light.

Gray has worked as a planner in New York City and is currently completing a Ph.D. in city planning at UCLA. He employs insights gained from his planning experience as well as his academic training to deliver a book that is simultaneously thought provoking and entertaining.

Part I of Gray’s book provides the reader with a bit of historical background on zoning. It is important to note that the information he provides is never included in mainstream real estate texts where zoning is often presented as a given with which all market participants must contend. He begins in 1916 with the first zoning ordinances in Berkley, California and New York City, noting the important roles that exclusionary goals and segregation played in the early development of zoning. Gray closes this portion of the book with an explanation of how zoning works or, at least, how it is supposed to work. In theory, zoning allows local governments to regulate land use in ways that minimize the impact of potential negative externalities generated by certain property types.

Gray outlines the shortcomings of zoning and the costs that society incurs as a result of these issues in Part II. He begins this section with the contribution of zoning to the housing affordability crisis explaining the impact of such common elements as minimum lot size and parking requirements on the cost of housing. He also notes the way the zoning approval process contributes to the cost of new development in terms of both time and uncertainty. Gray then focuses on how reduced housing affordability negatively impacts the growth of cities imposing opportunity cost on society as would-be innovators and entrepreneurs avoid the country’s most productive areas due to their excessive cost. He follows this with a discussion of how affluent areas have employed zoning to perpetuate segregation. In the final chapter of this section Gray examines the negative environmental consequences of zoning explaining how limiting density and segregating land uses results in excessive dependence on automobiles and, ultimately, urban sprawl.

Having built a good case against zoning in the previous parts of the book, Gray uses Part III to make the case that the evidence provided by our 100-plus years of experience with zoning is sufficient to motivate change. He begins by introducing the reader to what he refers to as “low-hanging fruit of local zoning reform,” noting that limiting local control is a likely key to success. Gray also makes the case for abolishing zoning and points the reader to Houston, Texas for the classic American example of the unzoned city. He closes this section of the book by focusing the reader’s attention on the real problem: that most people incorrectly assume zoning will address, externalities. Gray’s argument that concentrating on the mitigation of nuisances holds great promise in terms of setting the field of planning on a more productive course than the one followed in the recent decades. 

This is a very timely book that has the potential to prompt much needed discussion regarding the future of zoning. While most cities in the United States continue to constrain themselves with zoning as we have come to know it, Gray points out that there are some notable exceptions where zoning has been reformed or removed and the early results are promising. Unfortunately, as he also notes there will be resistance to changes in the use of zoning. Most individuals in the United States who have studied zoning in any depth had it presented to them as a given set of constraints where the only option available to property owners who would like to challenge the zoning of their property is to go through a costly time-consuming public process with no guarantee of a favorable outcome. It will likely take a great deal of time to change this mindset but Gray’s book can be a good first step in that direction.

H. Shelton Weeks

Dr. H. Shelton Weeks is a member of the inaugural faculty of Florida Gulf Coast University. He teaches in the areas of corporate finance, investments and real estate. His research focuses on pedagogical issues, corporate governance, and real estate. Dr. Weeks has extensive industry experience in valuation of real property with an emphasis on senior living projects. He is a member of the American Real Estate Society.

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