Housing Expert Calls for Zoning Reform to Address Economic Segregation

• “When a wealthy community says anyone is welcome to come here so long as you can afford a single-family detached home—sometimes on a half-acre lot—that’s class exclusion.” – Richard Kahlenberg

WASHINGTON, D.C. — Housing expert and author Richard Kahlenberg joined National Housing Trust CEO Priya Jayachandran last week for a wide-ranging conversation about how exclusionary zoning laws drive both economic and racial segregation — and how reform could open the door to more equitable, affordable communities across the United States.

Kahlenberg, a senior fellow at the Progressive Policy Institute and author of Excluded: How Snob Zoning, Nimbyism, and Class Bias Build the Walls We Don’t See, argued that zoning is at the heart of America’s housing crisis. He said the same policies that once enforced racial separation have evolved into mechanisms for class exclusion — preventing working-class families from living in high-opportunity areas and deepening inequality across regions.

“Because of the Fair Housing Act, racial segregation has declined 30%. At the same time, economic segregation has doubled,” Kahlenberg said. “We used to have more economically mixed neighborhoods. Now the rich and poor are pulling apart.”

He explained that the roots of the problem lie in the country’s zoning structure. 

“Early in the 20th century, there was explicit racial zoning,” he said. “The Supreme Court struck that down, which was an advance for human freedom. But communities quickly adapted — they adopted income-based restrictions that excluded working-class and low-income people of all races.”

Those restrictions, he added, continue to this day in the form of large minimum lot sizes, bans on multi-family housing, and onerous parking or setback requirements.

“When a wealthy community says anyone is welcome to come here so long as you can afford a single-family detached home — sometimes on a half-acre lot — that’s class exclusion,” he said. “Behind that is the idea that some people are less worthy of living in a community than others.”

During the webinar, part of NHT’s Insight and Housing Series, Kahlenberg connected the housing crisis to broader questions of opportunity, especially in education. 

“At the end of the day, housing policy is education policy,” he said. “Most children attend schools assigned by where their parents can afford to live. If we could break down some of the barriers and provide more affordable housing throughout metropolitan regions, then we could begin to address some of the deep educational problems.”

Kahlenberg said he first encountered these connections while working with the Charlotte-Mecklenburg school district in North Carolina, the day after Donald Trump was elected president in 2016.

“I was feeling a little down,” he recalled, “but the school board announced it would use magnet schools to promote racial and economic diversity. I thought that was a great step forward — but most students still attend neighborhood schools. And if we really want integrated schools, we have to deal with housing policy.”

He described exclusionary zoning as “a central driver of the crisis of housing affordability and segregation,” noting that while many policymakers recognize the harm, few have been willing to confront local resistance. 

“For years, there was an academic consensus that exclusionary zoning was bad,” he said. “But there was also a political consensus that there was nothing you could do about it — that the ‘not in my backyard’ voices always win.”

Minneapolis, he said, proved that assumption wrong. In 2018, the city became the first in the nation to eliminate single-family-only zoning, allowing duplexes and triplexes citywide.

“The preliminary evidence is very positive,” he said. “Between 2017 and 2021, the city saw an 8% increase in homes compared with 3% nationally, and rents rose just 1%, compared to a 31% national increase.”

Kahlenberg credited that success to a broad coalition that included both progressives and moderates.

“Bloomberg News called Minneapolis the first city to have tamed inflation,” he said. “Housing is the biggest expense for most individuals, and when you tame rent increases, that has a big impact on the overall cost of living.”

He also cautioned that zoning reform alone is not enough.

“We need both zoning reform and rental assistance,” he said. “If we don’t increase supply through zoning reform, then rental assistance goes less far because the prices of homes and the concomitant rents keep increasing.”

Kahlenberg’s central policy proposal, the Economic Fair Housing Act, would extend the principles of the 1968 Fair Housing Act — which targets discrimination based on race, religion, and other protected classes — to include income-based exclusion.

“If a jurisdiction adopts zoning policies that discriminate by income,” he explained, “the burden would shift to the municipality to prove those rules are necessary for some reason other than exclusion.”

The proposal, he said, would give local officials the “political cover” to adopt fairer housing rules by shifting accountability to the courts. “It’s not that you’d have a million lawsuits,” Kahlenberg said. “It’s that the threat of litigation would encourage jurisdictions to make politically difficult moves to open up housing to people across a broader range of income levels.”

He noted that Representative Emanuel Cleaver has expressed interest in introducing such legislation at the federal level. 

“He said this would be consonant with Dr. King’s dream of addressing both racial and economic inequality in the area of housing,” Kahlenberg said.

The webinar also explored the limits of existing federal programs. While Kahlenberg voiced support for the Affirmatively Furthering Fair Housing (AFFH) framework first introduced under the Obama administration, he said it focuses primarily on racial integration. 

“Because of the Fair Housing Act, we’ve seen racial segregation decline,” he said. “But at the same time, we’ve seen a doubling of income segregation. We’re replacing one form of separation with another, and we need new tools to address it.”

He added that an Economic Fair Housing Act could complement AFFH by giving individuals the right to sue over income-based exclusionary zoning.

“AFFH is a federal tool that requires local governments to take proactive steps, but this would empower individual plaintiffs,” he said. “It would allow families and developers to challenge economic discrimination directly.”

Kahlenberg said the approach could also appeal to both political parties.

“I’ve worked with the American Enterprise Institute on zoning reform,” he said. “They come at it from a deregulation standpoint; I come at it from an inclusion standpoint. But if you end up with the same policy result coming from different directions, that’s the recipe for success.”

Despite this potential, Kahlenberg said political polarization has made coalition-building harder. 

“It used to be in Washington that you could agree on some issues and disagree on others,” he said. “Now people who seek common ground are seen as traitors.”

He also discussed the contrast between the bipartisan appeal of zoning reform and the rhetoric of President Donald Trump.

“He’s kind of the NIMBY-in-chief,” Kahlenberg said. “Early in his administration there was talk about deregulation and supporting zoning reform, but later he weaponized it — claiming he was protecting ‘Suburban Housewives of America’ from an ‘invasion’ of low-income people.”

Kahlenberg said his focus on class-based exclusion is not meant to replace racial justice efforts but to complement them. “I’m happy that racial segregation is getting attention — it deserves it,” he said. “But increasingly, as Robert Putnam at Harvard has said, we’re replacing racial segregation with economic segregation that really needs to be addressed with new tools.”

Asked what local governments can do beyond zoning reform, Kahlenberg pointed to inclusionary housing policies like those in Montgomery County, Maryland, where developers are required to set aside a portion of new units for low- and moderate-income families.

“The educational outcomes for those kids are extraordinary,” he said. “That’s what economic integration can achieve.”

He also defended the role of institutional investors in the housing market, arguing that the focus on private equity has sometimes been misplaced.

“It’s a little bit of a red herring,” he said. “It’s focused on the demand side rather than the supply side. Many institutional investors are building new housing and renting it out, which increases supply. I worry about legislation that could unintentionally reduce housing production.”

Throughout the conversation, Kahlenberg emphasized that housing affordability and integration must be seen as shared national goals rather than zero-sum fights. “Housing is both the source of and the solution to many of our country’s inequalities,” he said.

He closed with a note of gratitude for those working in the field. “I’m at a think tank where I have ideas and research,” he said, “but I have tremendous admiration for the people who are doing the work every day to make sure families have a roof over their heads. You’re the ones turning ideas into impact.”

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