Exclusion Harms Property Values

Cindy Tucker runs a nonprofit in Calhoun, Georgia, called Tiny House Up. She wants to build tiny houses—about 600 square feet—to help address the city’s housing shortage. But the city won’t let her because its regulations require a minimum lot size of about 11,000 square feet and houses must be at least 1,150 square feet.

The stated purpose of these types of regulations is to protect the “community’s character.” We are asked to believe that tiny houses on small lots somehow pose a threat to the values and well-being of others in the community. However, appealing to the community’s values is a thin veil for the real purpose of exclusionary zoning—excluding certain types of people.

Those who defend exclusionary zoning, such as single-family zoning, believe that multi-family housing poses a threat. They believe that “undesirables” live in that type of housing and want to exclude such people from the community. They also believe that “undesirables” live in tiny houses and want to exclude those people from the community. Land-use regulations, including minimum sizes for lots and homes, are one way to accomplish this.

One popular justification for such exclusionary regulations is that they protect property values. Though this claim is widely accepted to be true, studies have proven it to be blatantly false. For example, Kem C. Gardner Policy Institute at the University of Utah examined the impact of high-density apartments on single-family home values in suburban Salt Lake County. The study found,

Between 2010 and 2019, homes located within ½ mile of a newly constructed apartment building experienced a 10.0% average annual increase in median value, while the value of those farther away increased by 8.6%.

Similarly, an analysis of the impact of eliminating single-family zoning in Minneapolis compared home sales prices in single-family homes within three kilometers of the city border to sales prices with three kilometers outside the city border. The study found that home values within the city increased by 3 to 5 percent more than those outside the city. The study’s author notes

that this increase is to be expected, since greater development potential raises the immediate value of previously single-family properties, even though in the long-term it can encourage a broader housing supply, which can lower city-wide housing prices.

While studies such as these debunk the myth that multi-family housing harms property values, the fundamental issue is moral. Justice demands that we treat others as they deserve, not on the basis of their skin color or economic status.