top of page

How Zoning Laws Are Inherently and Systematically Racist Barriers to Generational Wealth Building

Zoning laws. You've probably heard of them. They regulate different areas of cities by creating rules that specify what you can and cannot build in those zones. In most R-1 zones, only single family homes can be built. If you want to build a manufacturing warehouse, you'd likely have to do it in an Industrial zoned area. But how did these rules come about and why?

Like a lot of our history in this country, it's pretty messed up. To put it frankly, zoning laws were originally created to prevent non-white people from moving into white neighborhoods. Let me expand on that, since that's a pretty hefty statement. Let's go back to the early 1900s when the first zoning laws were ever introduced to American neighborhoods.

Initially, in 1910, "zoning laws" were introduced with no regard to property classification, and solely race. Baltimore was the first city to do this, "in 1910 [Baltimore] adopted an ordinance prohibiting African Americas from buying homes on blocks where whites were a majority and vice versa" writes Richard Rothstein in his book The Color of Law: A Forgotten History of How Our Government Segregated America. Several cities and states followed suit, and others adopted different versions of this type of racial zoning. Some cities had to get crafty, because in 1917, the Supreme Court ruled that specific type of racial zoning was unconstitutional.

Enter St. Louis, Missouri.

In 1919, St. Louis adopted a new type of zoning ordinance, one that did not touch on race specifically, but deliberately accomplished the same effect of segregating neighborhoods by race. "If a neighborhood was covered with single-family houses with deeds that prohibited African American occupancy, this was taken into consideration at plan commission meetings and made it almost certain that the neighborhood would be zoned 'first-residential'" Rothstein writes. This created new "single-family zoning" that barred the construction of anything that wasn't a single-family home in that zone, preventing the construction of more affordable housing and creating a barrier for non-white people to enter into middle or upper class neighborhoods. A barrier not only of price but in the early to mid 1900s, it was fully legal to write a covenant into the deed of your home that it could not ever be sold to an African American.

Additionally, St. Louis. designated land that was adjacent to African American populations as "industrial development", so that any new factories, warehouses, or any other industrial buildings were to be built next to non-white neighborhoods, driving down property values in those areas. By allowing polluting, industry, liquor stores, junkyards, nightclubs, and prostitution houses to open in black neighborhoods and not white ones, the government directly contributed to the declination of non-white neighborhoods, preventing the opportunities of building generational wealth to escape those neighborhoods.

These zoning laws also created an issue for the ability to secure government backed loans, like FHA loans. Since houses in non-white residential districts were considered higher risk, the government wouldn't issue loans to people trying to buy them. The houses in these districts required more upkeep, they were prone to more hazards around them, and the habitants of these homes often didn't have the funds to do necessary repairs. This was not an issue for the "first-residential" single-family districts, however. So while white people went on gaining equity, selling their homes to each other to build generational wealth, non-white people were left in the dust as the country progressed around them.

I use St. Louis as an example, but cities all across the U.S. adopted their own versions of these laws, and today they are a norm of our society. Lets take a look at a town in our own backyard of the Hudson Valley, Bedford. A town with tons of beautiful houses on large parcels of land, where the median house price is over $1 million, and also a town that is overwhelmingly white, 91.3% to be exact (source). If we look at the Bedford zoning map, which I will post below, we see that the vast majority of the town of Bedford is covered in "4-A" Zoning districts, and then followed by "2-A" districts. What is a "4-A" zoning district in Bedford? They are properties that, per town code, must have a minimum of 4 acres of land, and cannot have a building that covers more than 3% of those 4+ acres. (source) So, that means for a property of 4 acres (174,240 square feet), your ground coverage for your house can only be a maximum of 5,227 square feet. That's leaves 3.9 acres of land that cannot be used for additional housing. When over 75% of a town's land can only be used for single family homes on over 4 acres of land each, that has a direct effect on who can and can't live there.

But it goes further than that. Where in the current zoning laws of Bedford allows for the creation of affordable housing? Well, there are a few spots! There's a DH (Diversified Housing District) zone that encompasses a miniscule area of one singular condominium development, the cheapest of which in the last 2 years that was over 2 bedrooms sold for $410,000, with the median being closer to $600,000. "The purpose of the DH District shall be to provide increased housing opportunities in the Town of Bedford for an economically diverse population who, because of reasons of cost, are presently excluded from purchasing residences in the Town of Bedford. It is the intent of the Town to provide the lowest cost housing possible in this district". (source) While a $600,000 condo may be affordable to some, it is not for the majority of low income people.

Also, in accordance with law, it states that 10% of any new single-family development must be designated as affordable housing and 20% of any multi-family development must do the same. Great news!


In Bedford's town code, it states that "an applicant for a single-family residential subdivision located in a residential zoning district with at least a two-acre or more minimum lot requirement and with five or more units may make application to the Planning Board for discharge of such applicant's obligation to construct an AAFFH unit. or units, by the payment of a fee-in-lieu of construction to the "Town of Bedford Housing Trust Fund" to be used only for the purchase and/or development of affordable housing at other suitable locations within the Town." (source) Basically, anyone developing in that "4-A" or "2-A" zone where all the pretty, expensive, and white houses are can apply to have the affordable housing requirement waived. They can just pay into the "Town of Bedford Housing Trust Fund" of which I can find no information online. These are the exact kind of zoning restrictions that prevent the building of generational wealth for minority races by barring them from entry to the areas in towns where the true wealth lies.

There are some actual steps that the town has taken to create affordable housing, often in the form of affordable rentals or designating a select few single family homes as permanent affordable housing. However, I do not believe these steps go far enough to address the root of this problem.

Zoning laws were created to be racial barriers, and today in towns all across the country, they still have the same effect. Across the U.S., roughly 75% of all city lands are zoned for single-family housing only. (source) Restrictions like these, shown in my example in Bedford, lessen the amount of land available for new affordable housing and pushes development into high density only areas which decreases home values, further preventing the ability of people in those areas from ever making it out of those situations forced upon them.

In my opinion, zoning laws should not exist, or should be widely reconstructed to be more friendly to creating new housing in non-densely populated areas. Governments are not the only ones to blame, although they are the root of the problems. Whenever a new development for affordable or multi-family housing is pitched in an area of (typically majority white) single-family homes, the residents often offer huge pushback, many times with success to shoot down the opportunity.

The laws that were created over 100 years ago to keep white and black families separate are still in effect today. They may not use the same language, but the effect remains the same. It is our duty as Americans to strive for equal opportunity for everyone, and that means scrutinizing systematic parts of our society that are active roadblocks for certain communities.

Thanks for listening,

Anthony Ruperto

Licensed Real Estate Salesperson

The Ally Team at J Philip Real Estate

522 N State Road, Suite 100,

Briarcliff Manor, NY 10510

46 views1 comment

1 Comment

J Philip Faranda
J Philip Faranda
Feb 27, 2022

Excellent piece Tony. The Color of Law should be required reading for everyone in the housing industry.

bottom of page