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Does Restrictive Zoning Make U.S. Cities Less Equal?

The short answer is yes

Zoning regulations designed to limit development may be a significant driver of economic inequality in the United States, according to a growing body of research reported on by the New York Times.

Long-time residents of the country’s boom towns—like San Francisco, Boulder, New York, and Seattle—may hope to preserve their town’s character and stem the influx of new arrivals by limiting residential development through zoning. However, these measures have other less desired effects. As we recently explored in a story about the country’s most economically unequal city, restricting the supply of new homes doesn’t deter wealthy arrivals, it results in less wealthy locals getting priced out.

For more than a century, the United States’ wealthy elite and unskilled labor force lived in close geographic proximity, with people in both groups inclined to move to wealthier areas of the country. But in just the past three decades, this pattern has shifted dramatically: wealthy people are now moving to more wealthy areas while poorer people are moving to poorer areas, according to a Harvard study by Peter Ganong and Daniel Shoag.

When the country’s greatest economic centers are geographically reserved for the wealthy, the less-wealthy have fewer opportunities to narrow the income gap.

As Shoag told the New York Times, "We’ve switched from a world where everybody educated and uneducated was moving from poorer parts of the country to the richer parts of the country to a world where the higher-educated people move to San Francisco and lower educated people move to Vegas."