The Connection Between Minimum Lot Sizes and Segregation

Cities across America are grappling with housing affordability, with housing supply not meeting demand. Today’s housing shortages, though, are also rooted in decades of past decisions privileging land for low-density development. Unlike other countries, the limits on land use in America are still decided by thousands of different suburban jurisdictions nationwide. My research recovers when in history the restrictions were made and estimates causal effects of what drove adoption across the nation.

No matter when your local city started to suburbanize, suburbs adopted the zoning power to limit land use in similar ways. Each would pass a zoning ordinance, then limit the density of residential homes through minimum lot sizes that require that every housing unit occupy a set minimum acreage. The minimum lot size is a widespread regulation today, but my work uncovers that most were first adopted as a postwar phenomenon, from 1940 to 1970. To do this, I compare older and newer homes built in each suburb and check when homes started to exhibit bunching on lot sizes. The units built after minimum lot sizes take effect have “jagged” lot size distributions, with many properties’ lots at specific numbers and few lots with slightly higher or lower sizes.

Of all the ways American society transformed after World War II, a key trend was the Great Migration of 4 million Black Americans from the South to the North. Was the rise in exclusionary zoning through lot size restrictions over those same decades a coincidence, or were they a reaction by suburbanites to the changing racial composition of American cities? I use causal inference techniques in economics and data across 250 American metro areas to estimate a sizable effect of Black migration on lot size outcomes, but effects on cities to which 8 million Southern white migrants moved the most. Together, the results imply that today’s land use restrictions were conceived during a prejudiced past. The restrictions were adopted in reaction to race rather than exclusion based only on income, as some economists have argued.

Despite the major advances for Black Americans during the Civil Rights era, I conclude that not limiting local discretion on land use blunted further efforts to racially integrate American society. I find that early efforts right after the war by some states to ban racial segregation in public schools caused earlier minimum lot sizes that were more restrictive on development. The Fair Housing Act of 1968 wound its way to passage even while local governments internalized the tools of exclusionary zoning. Urban land, planned by local actors, did not meet regional needs but met the demand of white suburbanites willing to pay more to live in segregated places.

Tianfang (Tom) Cui received his PhD in Applied Economics at Wharton. His research covers topics in public and urban economics, with a focus on measuring the policies that matter in augmenting housing supply and delivering more housing affordability.