The Irony of Inclusionary Zoning

Abstract

Between 1973 and 1980, the average sale price of a single-family house in the five-county Los Angeles area rose from $40,700 to $115,000, or by 183%. This increase not only was twice the rate of increase in the Consumer Price Index for Southern California during the same period (92%), but also far outstripped the coincident increase in house prices in the nation as a whole (117%). In 1973, the average Los Angeles area house price was only 17% above the national average; by 1980, the gap had widened to 52%. In the San Diego and San Francisco metropolitan areas during the identical 1973 to 1980 period, the rate of house price inflation was slightly greater than in Los Angeles. There is growing evidence that the recent boom in California real estate prices is attributable in significant part to legal events of the 1970's. Several state enactments in the early part of the decade armed California environmentalists with powerful legal techniques for slowing or stopping new development. Moreover, a series of decisions by the California Supreme Court stripped away many previously perceived constitutional constraints on local land-use policies. These judicial decisions enabled the cities and counties of California to levy heavier taxes on new development and, by making local officials less fearful that their zoning restrictions would be declared unconstitutional, contributed to tighter and tighter local controls on the supply of housing.