Memo to Funders: Fight Exclusionary Zoning to Make Headway Against Inequality

Hell, yes, the rent is too damn high, higher than ever in fact. The reasons why are myriad: a shortage of rental properties, millions of families de-homed in the financial crash, and tightened lending restrictions during the process of financial recovery. The building sector is still recovering from the crash as well, so new housing starts are well below levels from before the Great Recession. Meanwhile, family income, when adjusted for inflation, is below what it was in 1989.

All that adds up to families hemorrhaging money for housing, and not getting much in return. Seventy-five percent of extremely low-income families now spend more than 50 percent of their income on housing, and affordable housing is incredibly scarce in middle- and high-income communities, which often have the best public schools. 

One result is that families of color are often trapped in poor neighborhoods with substandard schools, and racial segregation in K-12 is as bad as ever in many places. In fact, right now, New York State—with its high housing costs and stratified communities—has the most segregated schools in the entire country. 

A big reason for a scarcity of affordable housing, and more integrated U.S. communities, is exclusionary zoning laws, which block high-density housing in largely affluent white suburbs, keeping out people of color and low-income people in general. Just look at any ritzy burb around any top city and you'll know what I'm talking about. You think developers can come into places like Scarsdale, NY, or Newton, MA, and easily build apartment complexes where rents might be within striking distance for single moms who want a better life for their kids? Forget about it. There are, literally, often laws against that, as Lisa Prevost recently documented in her book Snob Zones: Fear, Prejudice, and Real Estate

But if we could wave a wand and remove those laws, we'd see big changes in residential patterns as more urban families dispersed to suburbs in search of better schools. In turn, that mobility would make it easier to address persistent poverty and educational disadvantage—issues for which the United States has made depressingly little progress over recent decades. 

Funders and advocates could push harder to fight exclusionary zoning, so why don't they?

Of course, there are many national organizations supported by foundations that engage in advocacy concerning affordable housing. There is the National Housing Law Project that has been advocating for low-income tenants and residents of federally-assisted housing nationally for over 45 years. There is the National Law Center on Homelessness and Poverty, which deals with issues of criminalization of the homeless, but again, does not have a general focus on exclusionary zoning. And organizations like the Bill and Melinda Gates Foundation farm out their legislative housing advocacy to groups like Building Changes and The Washington Youth and Family Fund, but the focus is affordable housing, and not exclusionary zoning in particular. 

Meanwhile, education funders focus almost exclusively on schools, teachers, and students—even though racial segregation, and by implication the housing patterns that drive it, has long been known to be damaging to children, not just educationally but psychologically. That was the logic behind Brown v. Board of Education, remember? How much can philanthropy really hope to boost student achievement if it's sidestepping a key systemic inequity that holds kids back? 

Let's start with the housing funders. You would think that any foundation that wants to impact affordable housing would be focused on exclusionary zoning, but you would be wrong. A recent exchange with Alexis Perlmutter, who manages communication for Funders Together to End Homelessness, indicated that no funders within its network are focused on challenging exclusionary zoning rules. The coalition does focus on other efforts that support housing trust funds in states, which is another key for funding affordable housing.

Related - Which Funders Are Battling Today's Forms of Segregation?

There are only two grants we know of that were made in the past five years specifically to address exclusionary zoning. One is a New Jersey fund's grant to Fair Share Housing which we discussed here, and the other is a 2013 grant from the Ford Foundation to the Anti-Discrimination Center of New York for $95,000. Other grants surely get at the problem indirectly—for example, by supporting work to strengthen enforcement of the Fair Housing Act, a linchpin of federal efforts to reduce residential segregation. 

Still, it remains striking how few funders have ever clearly targeted exclusionary zoning. Why don't foundations want to touch this issue? Perhaps for some of the same reasons that politicians don't: It means going toe-to-toe with a powerful upper middle class, many of whom like their towns just as they are. Think of suburban communities as private clubs where members pay hefty dues in the form of property taxes to underwrite good schools. Quite apart from issues of race and class, do the members of these clubs really want to let in apartment dwellers with school-age kids who can get all benefits at a fraction of the dues? Of course not. 

The other issue, of course, is that every leafy town in the country is quick to mobilize against "growth" and none of them want apartment complexes or the traffic they bring. You can guess where liberals come down on this one, making it harder to build any kind of potent coalition to challenge exclusionary zoning. 

Ultimately, the lobby for the property owners in affluent communities is still much stronger than the lobby for those kept outside these virtually gated communities.

So now that we've covered the problem, let's talk about solutions and the role of philanthropy. One organization that is tackling the housing affordability crisis with a legal focus on exclusionary zoning is the Equitable Housing Institute (EHI). Established as a 501(c)(3) in 2008 and headed by Thomas Loftus, this organization holds one of the keys that funders need to pay attention to if they want to advance the goal of more integrated communities and schools. 

"With housing, we're really just getting going with correcting a pattern of local government exclusion," said Mr. Loftus in a recent interview. Loftus started the Equitable Housing Institute after retiring from the federal government, where he had worked for 26 years as an advisor to members of the U. S. Occupational Safety and Health Review Commission on cases in litigation.

Mr. Loftus started EHI out of a personal avocation to do something about equal access to housing. His work through EHI often involves crunching the data for municipalities and showing them that new housing, including affordable housing, is not a drag on local budgets when all relevant taxes and other government revenues are considered. Loftus described a prevailing attitude in many local and state governments that commercial development is good for revenue, and housing is bad for revenue.

"Localities tend to favor commercial projects which are seen as producing more net revenues," he said, but this assumption is faulty and can be challenged by data and research. "The idea that new housing drains local budgets, it's just ain't so, and there are authorities going back 50, 60 years that have studied and come to that conclusion."

Loftus has been instrumental in Western Fairfax, where they have recently added affordable housing. Of the housing units added after EHI got involved, at least 1,900—and perhaps as many as 2,778—will be affordable to low- and moderate-income people, under the plans and Fairfax County’s Workforce Housing Policy.

With the Smart Growth approach to developing metro areas, particularly along commuter lines, Loftus sees an opportunity to help communities recognize that affordable housing and a range of options for housing are both important factors that should be built into the plan.

One critical way to work on this is to challenge exclusionary zoning policies. "Statutes are key in this, and they've got to be specific and have some teeth, and compensate the people who have to correct local government abuses."

It's time for funders to wake up and realize that residential stratification, with the legal regime that supports it, is a key driver of inequality, particularly in education, and get more serious about addressing this problem. That goes for housing funders, but also education funders, who will otherwise find their efforts stymied. An organization like the Laura and John Arnold Foundation talks a good game about making "systemic changes" to improve education. Well, this area is a great candidate for its money. Kellogg is super-focused on race these days. It could step in here in a big way. A conservative or libertarian funder could champion this cause in the name of freer markets. 

And one obvious candidate for funding? Thomas Loftus and the Equitable Housing Institute. With the organization's detailed research on housing law, and its ability to help municipalities take a hard look at their assumptions and priorities, EHI has an important role to play in the fight for fair housing.