Suburban Apartment Bans May Be Making Poorer Neighborhoods’ Rents Increase
When suburbs block apartments, rents in nearby poor neighborhoods may rise by about $27 a month, according to a new national study. Most research on exclusionary zoning has focused on costs within the communities that adopt it; this study finds the harm spills across the region, falling on low-income renters miles away.
In “The Cumulative Exposure to Exclusionary Zoning in Impoverished Neighborhoods,” Matthew Mleczko examines whether sustained exposure to restrictive local zoning is associated with rent levels and housing hardship in lower-income communities over time. They draw on two periods of zoning policy — the mid-2000s and the early 2020s — to test whether persistent zoning restrictions accumulate harm over time.
Key Takeaways:
- Rents climb: Poor neighborhoods in regions with more restrictive zoning in both time periods measured had median monthly rents roughly $54 higher than those in less restrictive regions.
- Burden spreads: Poor neighborhoods in cities with restrictive zoning for both time periods had about 2 percent more rent-burdened households than poor neighborhoods in less restrictive cities.
- Affordable stock shrinks: Regions with more restrictive zoning in both measured time periods had 2–4 percent fewer homes affordable to low-income households than those with less restrictive zoning, and the shortage was not just in poor neighborhoods but regionwide.
Mleczko scored 2,300-plus municipalities across 349 regions on a Zoning Restrictiveness Index (ZRI) — seven policy measures combined into a single weighted score — at two snapshots: 2003–2006 and 2019–2022. Places above the average in both snapshots, just one, or neither were compared against housing outcomes in nearby poor neighborhoods to test whether restrictiveness accumulates harm over time. Past zoning shapes neighborhood demographics, which then shape future zoning, so standard models understate the effect. Mleczko’s fix upweights places where zoning is surprising given their demographics and prior history, so rent differences between groups reflect zoning rather than pre-existing demographics.
Here are his findings:
- Regional restrictions appear to inflate property values, which Mleczko proposes landlords pass on to tenants. Poor neighborhoods in regions that had more restrictive zoning in both time periods had median property values roughly $32,000 higher than those in less restrictive regions. Mleczko proposes this as one channel through which regional exclusionary zoning raises rents in poor neighborhoods. When supply restrictions in wealthier parts of the metro limit construction and inflate property values across the metro, landlords who own rental property in poor neighborhoods face higher acquisition and holding costs and charge higher rents to cover them.
- Rising rents, not just low incomes, appear to be pushing renters over the affordability threshold. If higher rent burden in restrictive regions were simply explained by residents of those poor neighborhoods being poorer, we would expect the finding to disappear after controlling for neighborhood poverty rates — but it does not. Mleczko takes this as evidence that rent increases driven by regional zoning restrictions are pushing renters over the 30 percent threshold, on top of whatever income constraints they already face. Prior research cited in the paper finds that many renters face eviction due to arrears of less than $600, meaning even a 1 percent shift in who crosses the rent-burden line carries real consequences for housing stability.
- Restrictions reduce the construction of lower-cost homes across the whole metro, not just in poor neighborhoods. Regions restrictive for both time periods had 2–4 percent fewer homes affordable to very-low- and low-income households than less restrictive regions, across the entire metro housing stock. This means the shortage is a regional pattern, not just something concentrated in poor neighborhoods. Mleczko argues that exclusionary zoning limits multifamily and affordable housing construction in wealthier parts of the metro, constraining the overall supply of lower-cost homes available to below-median-income households throughout the region.
The study suggests that zoning reform is a prerequisite for other housing programs to work, since even substantially increased subsidies, such as the Low-Income Housing Tax Credit, cannot fund construction where local rules prohibit it. State and federal fair housing intervention is also warranted, Mleczko adds, because residents of poor neighborhoods have no standing to change zoning rules in other jurisdictions. This may mean that regional zoning reform could reduce rent pressure on low-income renters, who currently have no mechanism to benefit from policy changes in wealthier communities.
Photo by Yura Forrat from Pexels