How Constitutional Litigation Can Help End Exclusionary Zoning

A guest post by Ilya Somin

Here’s a guest essay by Ilya Somin of GMU’s Scalia Law School. While Ilya and I continue to disagree on war and peace, we are (nearly) of one mind on both immigration and housing. If you think the federal government has little power to deregulate housing, think again!

P.S. In other news, don’t miss my review of Corey DeAngelis’ The Parent Revolution for RealClearBooks. Highlight:

And the sad truth is that such demagoguery has worked like a charm for decades. The substantive argument for school choice is simple: Free competition delivers higher quality, lower prices, more variety, and more innovation than government monopoly. This isn’t ideology; it’s common sense and Econ 101. Milton Friedman started sharing intellectually rigorous arguments for school vouchers almost seventy years ago. But faced with platitudes about the glory of public education and the evil of privatization, intellectually rigorous arguments lost decade after decade. One tweet about a teacher demanding a “safe remote environment” while vacationing in Puerto Rico changed more minds than any lecture on economic theory or any econometric study.

Now, here’s Ilya…

---

In his excellent new book, Build, Baby, Build: The Science and Ethics of Housing Regulation , Bryan Caplan  advocates far-reaching deregulation of housing markets.  I  agree. As Bryan and other scholars have documented, eliminating exclusionary zoning and other similar restrictions on housing construction would reduce housing costs, enable more people to vote with their feet and “move to opportunity,” make the economy much more productive, and greatly enhance protection for property rights.  Bryan also writes that a Supreme Court decision ruling that exclusionary zoning is unconstitutional is “probably the best shot for radical housing deregulation.” He’s likely right on that point, too.

In “The Constitutional Case Against Exclusionary Zoning,” a forthcoming Texas Law Review article, University of Wisconsin law Professor Josh Braver and I explain how to get there. The Supreme Court can rule that all or most exclusionary zoning regulations that restrict housing construction violate the Takings Clause of the Fifth Amendment. That clause requires the government to pay “just compensation” whenever the government takes private property. As explained in our article, the original understanding of the Takings Clause includes the right to use as part of the “private property” protected. And in the Founding era, like today, housing was clearly a standard use of property.  The same goes for the period around 1868, when the Fifth Amendment and the rest of the Bill of Rights were first “incorporated” against state and local governments by the enactment of the Fourteenth Amendment (previously, the Bill of Rights only constrained the federal government). We also explain how much the same conclusion follows on the basis of leading versions of “living constitution” theory.

Braver is a progressive living constitutionalist. I am a libertarian generally sympathetic to originalism. We differ on many issues, but agree here. If we can agree on that, I hope others can too.

Not all restrictions on the right to use property violate the Takings Clause. As discussed in our article (Section II.C), the so-called “police power” exception exempts regulations that protect against significant threats to public health or safety. But, as we also explain, few restrictions on housing construction even plausibly fall within that exception. The living-constitution theories we discuss would also allow many restrictions on commercial (as opposed to residential) uses. But that, too, would not be much of an obstacle to housing construction.

In his book, Bryan suggests that a Supreme Court decision striking down exclusionary zoning would have to overturn Village of Euclid v. Ambler Realty, the Court’s 1926 ruling upholding it. I would be happy to see Euclid go. But, as described in our article, the Supreme Court could easily rule against exclusionary zoning under the Takings Clause even without overruling Euclid. That’s because, technically, Euclid didn’t consider the Takings Clause at all. It merely ruled that exclusionary zoning does not violate the Due Process Clause of the Fourteenth Amendment (which mandates that states cannot deprive people of “life, liberty, or property without due process of law”). A future court ruling could make clear that Euclid only applies to the Due Process Clause (something the Supreme Court already suggested in a 2005 decision). As explained in Part IV of our article, the Court would not need to reverse any other decisions, either, though it would have to modify or reinterpret some language in various Takings Clause precedents. In recent years, the conservative majority on the Supreme Court has shown a willingness to strengthen protection for property rights under the Takings Clause. It’s possible they might do so here, as well. One or more liberal justices might also support the idea, given the strong living-constitution considerations supporting it, and the condemnation of exclusionary zoning by many progressives, arising in part from its history as a tool for racial exclusion.

If the Supreme Court rules that exclusionary zoning regulations are takings, governments would have to pay “just compensation” to affected property owners (usually defined as the “fair market value” of the property right in question). Few if any local governments could afford to compensate all of the many thousands of property owners currently barred from building high-rise or multifamily housing on their land by single-family zoning requirements and other exclusionary rules. To avoid crushing liability, they would have to either abolish exclusionary zoning or at least severely cut back on it.

Federal constitutional litigation is far from the only way to deregulate housing, and should not be pursued to the exclusion of other strategies. In recent years, several state and local governments have enacted deregulatory legislation. Montana is a notable example. State constitutional litigation might be another useful tool. With the help of the Cato Institute, Braver and I are conducting a survey of possible state constitutional options.

YIMBY (“yes in my backyard”) reform activists should also consider the possibility of enacting deregulatory state constitutional amendments. Many state constitutions are far easier to amend than the federal Constitution (some can be amended by a simple majority-vote referendum), and property rights advocates have made good use of such amendment tools in the past.

There is also a chance that federal legislation curbing zoning might be enacted, though it would be extremely difficult to push anything major through Congress.

These other options should be pursued. But federal-court judicial review has important unique advantages. State-by-state reform efforts cannot curb exclusionary zoning nationwide, at one fell swoop. A Supreme Court Takings Clause decision can take a major step in that direction. In addition, state-based reforms are often blocked or watered down by strong “NIMBY” (“not in my backyard”) opposition, and by widespread public ignorance about the true effects of zoning restrictions. Bryan Caplan, himself a leading academic expert on voter ignorance, also recognizes this problem.

Federal judicial review can also help overcome various local government attempts to circumvent zoning reform, and forestall efforts to use state-constitutional “home rule” provisions to block it. The recent dubious California court decision striking down SB 9—a significant law limiting single-family zoning—is an example of the latter. Takings Clause litigation can put a stop to that, because the federal Constitution supersedes all state laws and constitutional provisions that contradict it.

Historically, successful constitutional reform movements have relied on a combination of litigation and political action, rather than focusing on one approach to the exclusion of others. That was true of the civil rights movement, the women’s rights movement, same-sex marriage advocates,  gun rights, and such successes as property rights advocates have had in recent years. YIMBY housing advocates would do well to learn from this history, and put the knowledge to good use.

---

Ilya Somin is Professor of Law at George Mason University, B. Kenneth Simon Chair in Constitutional Studies at the Cato Institute, and author of Free to Move: Foot Voting, Migration and Political Freedom and The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain. He is coauthor (with Josh Braver) of “The Constitutional Case Against Exclusionary Zoning,” Texas Law Review (forthcoming), on which this article draws.