It was once legal to build almost anything, everywhere. Then, in the space of a few decades, nearly every city in the Western world banned densification. What happened?
In 1890, most continental European cities allowed between five and ten storeys to be built anywhere. In the British Empire and the United States, the authorities generally imposed no height limits at all. Detailed fire safety rules had existed for centuries, but development control systems were otherwise highly permissive.
Over the following half century, these liberties disappeared in nearly all Western countries. I call this process ‘the Great Downzoning’. The Great Downzoning is the main cause of the housing shortages that afflict the great cities of the West today, with baleful consequences for health, family formation, the environment, and economic growth. One study found that loosening these restrictions in just five major American cities would increase the country’s GDP by 25 percent. The Downzoning is one of the most profound and important events in modern economic history.
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The Great Downzoning happened during a period in which anti-density views were widespread among planners, officials, and educated people generally. Most people thought that urban density was unhealthy and dysfunctional, and supported government efforts to reduce it. It is natural to assume that this was why the Downzoning happened. Although there is surprisingly little literature on the Great Downzoning, historians who do discuss it often implicitly take this view, seeing it as of a piece with other anti-density measures taken by municipal governments across the West.
While there is undoubtedly some truth in this explanation, the evidence for it is surprisingly ambiguous. The Downzoning was extremely pervasive in existing suburbs, where it tended to raise property values by prohibiting kinds of development that were seen as undesirable. But in other contexts, it proved much harder to apply anti-density rules. In some European countries, ferocious battles were fought over whether municipal authorities should restrict the density of greenfield development. Doing so tended to reduce land values, prompting fervent resistance by rural landowners, who were generally successful in thwarting the proposed reforms. In the late twentieth century, planners and governments reversed their views on density, and became notionally committed to densification as a public policy objective. But they have had very limited success in reforming rules on suburban densification.
The general pattern is that the Great Downzoning was driven by interests more than by ideology. The Downzoning happened where it served the perceived interests of property owners, and failed to happen where it did not. Ideas-driven explanations of social changes are sometimes absolutely correct. But in this case, the correct explanation seems more materialist.
This has implications for the politics of housing reform today. In some places, anti-densification rules continue to raise property values, and in these places we should expect the Downzoning to be as politically robust as it has been for the last century: it really does give property owners something they want.
But in the great cities of the West, the housing shortage that the Downzoning has created may prove to be its undoing. Anti-density rules now reduce property values in these places rather than increasing them, and there is growing evidence that property owners opt out of such rules when they have the opportunity to do so. Winning the principled argument for density will not be enough to undo the Great Downzoning, because it never rested chiefly on principled arguments in the first place. But where the Downzoning is doing the most damage, it may now be possible to build new coalitions of interests in favor of reform.
The story of the Great Downzoning
In most European cities before the nineteenth century, elites were concentrated in city centers. Suburbs were unplanned, mixed use, and generally impoverished, a home to those people and businesses that were excluded from the urban core. Their inhabitants were powerless to resist densification, and often had little reason to do so anyway. The situation for suburbs was especially bad in continental Europe, where many cities retained massive fortifications until the nineteenth century that physically cut them off from their outskirts. Paris, Rome, Vienna, Milan, Madrid, and Barcelona are all examples of this.
These walls were often customs barriers as well as defensive ones – most Continental municipalities charged customs duties on goods entering the city until the late nineteenth or early twentieth century, and Paris’s excise duty lasted until 1943. This meant that municipal governments had an incentive to discourage economic activity in suburbs, through, for example, excluding their residents from membership of economically vital guilds.
More affluent suburbs did occasionally emerge, such as those that grew up around royal palaces and hunting lodges like Hampton Court and Saint-Germain-en-Laye, or along arterial roads like the Strand in London or the Bockenheimer Landstraße in Frankfurt. But even these were often developed haphazardly and generally remained quite mixed in social and economic terms.
A key step in the emergence of modern low-density suburbia was taken when developers began developing entire suburban neighborhoods, rather than just individual houses. This first became common in eighteenth-century Britain, probably because of Britain’s relatively deep capital markets and high rate of urban growth: developing a whole neighborhood involves huge outlays on laying out streets and amenities before any revenue starts to come in, so it is facilitated by low borrowing costs and confidence in future healthy sales.
Examples of early planned neighbourhoods include the West End of London, the Georgian extensions of Bath, the Bristol suburb of Clifton, and the Edinburgh New Town. These neighborhoods were still built with relatively high densities, so they are not exactly what we think of as suburbs today. But they were lower density than the urban core, as well as being exclusively or nearly exclusively residential, and exclusively upper-middle or upper class.
Suburbia really took off internationally in the nineteenth century, when planned suburbs spread across the British Empire, the United States, Germany, Austria-Hungary, and, to a lesser extent, France. The most universal and decisive factor behind this was probably again deepening capital markets and higher rates of urban growth. Other factors – none of which applied everywhere, but all of which were important in some places – included better roads, the development of suburban railways, buses and trams, improved policing, the abolition of customs boundaries around towns, the reform of feudal land tenures, and the demolition of city walls.
At the upper end of the market, densities quickly fell to levels similar to those of modern affluent suburbs. Many of the elite suburbs of this period are still famous neighborhoods today. American examples include Llewellyn Park in New Jersey, Forest Hills on Long Island, and Riverside outside Chicago. Examples from the British Isles include Rathmines in Dublin, Bedford Park in London, and Edgbaston in Birmingham. Some continental examples are Le Vésinet outside Paris, Pasing in Munich, or Westend in Berlin, named after London’s West End as a marketing gambit. Even small towns often had a tiny ‘villa district’, maybe just a couple of streets, like the Kingsland neighborhood of Shrewsbury. Only in the poorer countries of Mediterranean Europe did planned suburbs fail to catch on.
Social decline was common, even normal, for nineteenth-century neighborhoods, and homeowners lived in constant fear of it. Right from the start, suburb developers tried to safeguard neighborhood character through imposing covenants. This episode forms a fascinating prequel to the Great Downzoning, so much so that we might think of it as a ‘First Downzoning’ or ‘Proto-Downzoning’.
A covenant is a kind of legal agreement in which the homebuyer agrees to various restrictions on what they can do to their new property. Covenants generally forbade nearly all non-residential uses, as well as forbidding subdivision into bedsits or flats. They frequently imposed minimum sales prices, and in the United States, they often excluded sale or letting to non-white people. In all countries, they often included explicit restrictions on built density. Most covenants were intended to ‘run with the land’, binding not only the initial buyer but all subsequent ones too.
Here are the rules binding homeowners in Grunewald, Berlin’s premier suburb, reading like thousands of other similar documents before and since:
a) buildings may not be constructed higher than three storeys inclusive of the ground floor; b) all buildings must be provided with [ornamented] facades on all sides; c) at most two houses may be built conjoined to each other; otherwise there must always be a gap of at least eight meters between buildings, for which exception may be made only in the case of covered walkways; d) a fenced front garden of at least four metres in depth must be retained between any building and the street.
Covenants were extremely widespread. Although rigorous quantitative studies do not exist, my impression from wide reading is that all elite planned suburbs were covenanted, along with many middle-class ones. They were used in all English-speaking countries, and similar mechanisms existed in France (servitudes in cahiers des charges), Germany (Grunddienstbarkeiten), the Low Countries (erfdienstbaarheden), and elsewhere (e.g. Italy, Spain, Scandinavia). Under Japanese law at the time, covenants were legally unenforceable, but the idea was so appealing that Meiji-era suburban developers sometimes imposed them anyway, apparently as a purely moral inducement to conformity.
Covenants became more elaborate over time, and by the early twentieth century they sometimes included provisions on such matters as where laundry could be hung and what colours joinery could be painted in.
Developers would not have imposed covenants if they had not expected them to increase the value of neighborhoods, so their pervasiveness reveals a widespread demand for development control among nineteenth-century people. But they were not very effective. One problem concerned whether courts would enforce them. To secure the development in perpetuity, covenants had to apply not only to the initial homebuyer, but to all future ones – people with whom the developer would never have any direct dealings, and who might indeed live long after the developer’s death. It was legally impossible for normal contracts to do this, so alternative mechanisms had to be employed.
Continental countries generally used the ancient concept of servitudes from Roman law, but common-law jurisdictions had to rely on the system of equity developed in the English Court of Chancery. The problem with this was that courts varied greatly in which restrictions they considered equitable, creating a system fraught with risk and unpredictability for developers and homeowners. Although there was a general tendency for covenants to become better established in law as the nineteenth century went on, there remained much uncertainty about exactly what development rights could be restricted, who had standing to enforce against infringements, and when restrictions could be discharged (voided). In fact, the law on this is still hazy today.
Another problem with covenants was that they could not be modified retroactively, meaning that any flaws or loopholes were unfixable. This could prove disastrous for covenanters. For example, as already mentioned, many covenants included minimum price thresholds. These were normally given in nominal figures, which worked fine in the nineteenth century because there was no inflation. After 1914, however, inflation took off, swiftly making the thresholds trivially easy to meet. There was no way to insert inflation-adjustment clauses retroactively, so one of the pillars of nineteenth-century covenanting effectively vanished. For example, one Edwardian covenant stipulated that no dwelling worth less than £375 be built on the plot. To achieve the same exclusionary effect in 1920, the corresponding figure would have been £1,030. Since the number could not be increased retroactively, the covenant became effectively useless.
A third problem concerned the costs of enforcement. Covenants fall under private law: breaking one is not a crime, and the state will not prosecute it. Enforcement thus requires a private lawsuit, which was and is expensive. Today, a simple case will cost at least £25,000 in Britain, while a complex one can cost £60,000. Costs in the USA are similar or higher. Historical costs of litigation varied but were notoriously high. Developers were often willing to bear these expenses as long as they still had plots elsewhere in the development to sell, but once the entire neighborhood had been sold off, they usually lost any interest in policing its built form.
In theory, the covenants would subsequently be enforced by affected neighbors under a system known as ‘reciprocal enforcement’. In practice, however, this was beleaguered by free-rider problems, with no one resident willing to bear the costs of enforcement alone. Mechanisms eventually developed for pooling enforcement costs in some places, like the famous homeowner associations in the United States. But the overall bill remained high, meaning that covenant enforcement tended to be haphazard in any but the most affluent neighborhoods.
The upshot of all this was that covenants were usually a weak kind of development control, which disintegrated upon contact with serious demand for densification. An example of this is the Berlin suburb of Friedenau, originally developed in the late nineteenth century as what the Germans called a ‘villa colony’, an elite suburb of large detached houses.
Friedenau was originally built some way from the edge of Berlin, but the urban core expanded rapidly and reached Friedenau during the 1880s. Friedenau’s restrictions proved completely ineffective and the entire neighborhood was redeveloped with large blocks of flats. Only a handful of villas endured long enough to be protected by later conservation laws, surviving today as a curious reminder of Friedenau’s original form.
The stage was set for the Great Downzoning proper, when suburban density restrictions were introduced by public authorities. This began in the final years of the nineteenth century in Germany and Austria-Hungary. The key innovation was ‘differential area zoning’, whereby different areas within a given jurisdiction were subjected to different building restrictions. This allowed for development controls to be applied to suburban areas that would keep them at suburban densities without having the absurd side effect of applying suburban density restrictions to dense city centers.
After a couple of decades of experimentation, the 1891 Frankfurt zoning code caught the imagination of municipal governments across Central Europe. It was swiftly emulated. By 1914 every German city had a zoning code, and many had gone through multiple iterations, usually with progressively lower densities. In existing elite suburbs, these zoning codes tended to effectively duplicate the content of developers’ covenants, but because they had a stronger legal basis and were enforced by the state, they were far more effective.
For example, Grunewald’s zoning designation in the first decade of the twentieth century permitted two storeys plus a roof storey and basement, banned everything except detached and semi-detached buildings, and required a four-meter setback from the street – much the same as the covenant quoted above. The zoning code remains similar today, and has successfully preserved Grunewald as Berlin’s premier villa colony.
The example of Germany and Austria was quickly followed abroad. The Netherlands introduced a kind of zoning system in 1901. Italian cities began to follow suit before the First World War. Japan began to introduce a zoning system nationally in 1919, albeit one that continued to permit fairly high densities. Poland introduced a national system in 1928. American and Canadian cities started introducing zoning systems in the 1910s, which became widespread in the course of the interwar period. Zoning provisions began to be introduced in interwar Australia and were consolidated in the 1940s.
Britain and France followed relatively late: although they introduced planning systems of a sort in 1909 and 1919, respectively, these had limited effectiveness, and robust national systems were not introduced in either country until the 1940s. In broad terms, the Great Downzoning was in place by the 1950s, though density restrictions continued to be tightened in the following decades in many countries.
There are some limitations on the spread of the Great Downzoning, which we will explore in the next section. In many ways, though,the Downzoning was remarkably thorough. Virtually every wealthy suburb that existed in 1914 retains its suburban character today. Long ago, too, the Downzoning spread beyond the homes of the elites. When Central European cities began introducing zoning in the 1890s, suburbia was still largely the preserve of their upper-middle and upper classes. Today, a great part of the working and middle classes of all Northwest European countries and of North America live in suburbs, and they too enjoy the ambiguous blessing of the Downzoning’s protection. Wherever planned residential suburbs of owner-occupiers develop, it seems, the Downzoning has ultimately followed.
An idealist explanation for the Great Downzoning
At the time of the Great Downzoning, a negative view of the cities of the nineteenth century was extremely common. Frank Lloyd Wright described the cities of his day as a ‘conspiracy against manlike freedom’, a ‘disease of the spirit’, and a ‘senseless reiteration of insignificance’. Werner Hegemann, a prominent German urbanist who later wrote the United States’s first suburban zoning code in Berkeley, described Berlin’s urban fabric as comprised of ‘Dwellings so bad that neither the stupidest devil nor the most diligent speculator could have devised anything worse’. Le Corbusier claimed that ‘The nineteenth century has made the house into a ridiculous, revolting, and dangerous thing’ and observed that ‘We are living in a dustbin … in a kind of scum choked by its own excretions.’
These views spread far beyond architectural and planning elites, to the point that a negative view of nineteenth-century urbanism became one of the standard background opinions of educated people. To give one striking example, Lord Rosebery, chairman of the London County Council and thus the closest thing that existed to a mayor of London, said:
There is no thought of pride associated in my mind with the idea of London. I am always haunted by the awfulness of London […] Sixty years ago a great Englishman, Cobbett, called it a wen. If it was a wen then, what is it now? A tumour, an elephantiasis sucking into its gorged system half the life and the blood and the bone of the rural districts.
Both professionals and laypeople tended to see lowering residential densities as part of the solution. Planners often converged on twelve dwellings per acre (30 per hectare) as a good upper limit. In Britain, the famous urbanist Raymond Unwin promoted the slogan ‘twelve houses to the acre’ as the norm for residential areas. Ebenezer Howard also advocated twelve dwellings per acre in Garden Cities of Tomorrow, perhaps the most influential planning text of modern times. The influential American planner John Nolen adopted the same figure, arguing that ‘there must be a limitation of houses to not more than twelve per gross acre’. Josef Stübben, whose textbook Der Städtebau was the standard authority on urban planning in German-speaking Europe, advocated twelve dwellings per acre in most contexts, though he allowed for somewhat higher densities in central areas.
Public policy reflected this view in a range of ways. In all countries, public transport was subsidized and price controlled with the explicit aim of fostering urban diffusion. In Britain, the 1918 Tudor Walters Committee set a standard of twelve dwellings per hectare for social housing. This benchmark remained influential for many decades, and local councils often succeeded in meeting it.
In the United States, the Federal Government began to conditionalize mortgage support on densities of 4-8 dwellings per acre, while conceding that this might rise to 12-16 dwellings per acre in central areas. The French and Belgian governments sponsored an extensive program of garden cities in the interwar period, aspiring to similarly low densities, though not always reaching them. In Germany, the Weimar government extended subsidies for single-family houses with private gardens under the 1920 Reichsheimstättengesetz (Reich Homestead Act). The Nazis continued these in their own Reichsheimstättengesetz in 1937, illustrating how the aim of urban diffusion was shared between otherwise radically different political movements.
The other instrument that planners used to achieve low densities was, of course, zoning. All contemporary written justifications for suburban low-density zoning appealedto these background anti-density views, and virtuallyany of the planning officials who worked on early zoning plans would have seen their work as justified by such considerations. So part of the explanation for the Great Downzoning is very simple: it happened because it was seen as an obvious way of achieving an uncontroversial public policy objective.
But this cannot be the whole explanation. When existing suburbs were downzoned, the new rules merely confirmed the densities that market forces had already chosen for the neighborhood. Indeed, as we shall discuss in the next section, brownfield downzoning almost certainly tended to increase land values by protecting neighborhoods from blight. In such cases, then, planners were simply going with the grain of property owners’ interests. In places where planners’ priorities and property owners’ interests were not so aligned, planners’ success was far more doubtful.
A vivid example of this is the attempt of planners to lower the density of greenfield development (new neighborhoods on previously undeveloped land). In Anglophone countries, the density of greenfield development was already fairly low by the early twentieth century, and there was not much for planners to do in lowering it further. In continental countries, however, much greenfield development still took the form of densely massed apartment blocks, which were seen by planners and officials as a shameful humanitarian disaster. Lowering these densities was widely seen as just as much of a priority as protecting existing suburbs, and in many countries it dominated public debate about zoning.
The problem was that, unlike in existing suburbs, downzoning greenfield sites generally reduced their value. Developers built dense apartment blocks because, given prevailing market conditions, that was the most valuable use of the land. Requiring them to build terraced houses or cottages instead crashed land values and annihilated the asset wealth of landowners. Planners and municipal officials thus faced a powerful special interest group, against which they had great difficulty in prevailing.
The classic illustration of this is Rome. Like most Mediterranean cities, Rome had not really developed planned low-density suburbs in the nineteenth century, but Italian planners shared the contemporary belief that public policy should promote lower densities. In 1907, a coalition of liberals and socialists won the municipal elections under the leadership of Ernesto Nathan, breaking the longstanding hold of the landowning interests over the city’s government. The coalition prepared a zoning plan that aimed at making Rome’s urban extensions into international models of good practice, by the standards of the day.
The 1909 zoning plan for Rome was radical. The red-shaded areas still allowed traditional courtyard blocks, but at lower densities than before. The green-shaded areas allowed only ‘villini’, small detached apartment buildings of no more than three storeys, covering a maximum of half of their block area. The huge areas with green outline and white infill are marked for ‘giardini’, literally ‘gardens’. Only 1/20th of the plot area in giardini areas could be built over, a density that would count as low even by modern American standards.
The affected land was mostly owned by the ‘black nobility’, the traditional Roman ruling class (black was a symbol of mourning for the Papal government that had ruled Rome before its annexation by the Kingdom of Italy). The black nobility was appalled at the loss of land value that Nathan’s downzoning had wrought, and they embarked on a long campaign to reverse it. In 1913, an alliance of Catholic and nationalist parties won the municipal elections and loosened the zoning restrictions. Then in 1923 Mussolini seized power, dissolved Rome’s municipal government, and appointed a black noble as governor. For many decades thereafter, higher densities were permitted on many Roman greenfield sites than in the urban core.
Rome’s story is particularly dramatic, but the basic pattern is typical of Southern Europe. Planners in Spain, Portugal, Italy, and Greece generally shared the standard European aspiration towards lower densities, but they had few existing planned suburbs to defend: the only possible downzoning would be on greenfield land, suppressing density in new urban areas. This would run contrary to the interests of the landowners.
In all four countries, this failed to happen, and urban densities remained stubbornly high, only falling gradually in the late twentieth century under the influence of market forces. Today, these cities may seem like rather remarkable survivals of semi-traditional urban forms, but they were generally not so understood by contemporaries: Southern European writers in the twentieth century generally saw them as obvious urbanistic failures, the product of avaricious landowners and weak, corruptible states.
The story was initially similar in Germany and France. German planners made strenuous efforts to downzone greenfield sites before the First World War, but met with fierce resistance from landowners. In general, the landowners were successful in preserving their right to build apartment blocks, although they sometimes had to include larger courtyards and front gardens. In France, the planning movement was much weaker, and made little progress against landowner and developer interests. The maximum densities permitted in Paris actually increased in 1884 and 1902.
A kind of greenfield downzoning did later happen in France and Germany, but its story is a strange one, and the anti-density views of planners played no role in it. In 1914, both countries introduced tight rent controls to protect the families of soldiers from eviction (Britain followed a year later). As so often in the history of rent control, these rules proved difficult to lift when the crisis that had occasioned them was over. Rent controls persisted in both France and Germany throughout the interwar period and long into the second half of the twentieth century. Coupled with high inflation, this meant that the real value of rents rapidly fell.
This undermined the build-to-rent sector, because the rental value of apartments was generally no longer great enough to cover their build cost. Neither country had a well-developed system for selling buildings into multiple ownership: the modern French and German equivalents of condominium ownership, copropriété and Wohnungseigentum, only developed later in the twentieth century. The remarkable effect of this was that there was generally no way to build flats profitably, resulting in the collapse of the private flat-building sector. The surviving private builders switched over to building small houses for owner occupation, beginning the vast low-density suburbs with which German and especially French cities are surrounded today.
We are confronted, then, with a striking contrast: nearly total success in downzoning existing suburbs, and nearly total failure in downzoning greenfield development. This contrast casts doubt on the idea that the downzoning was driven by the will of planning elites.
Another context in which planners struggled to lower or even cap densities was in city centers. Many American city centers declined in the decades after the Second World War due to rising crime and traffic congestion, while densification was prevented in some European centers by architectural conservation laws. But in places where neither of these factors applied, densification of city centers continued apace, reaching some of the highest floorspace densities ever attained. Many Australian and Canadian cities are particularly clear examples of this, though there are also cases elsewhere. Again, this is puzzling for the ideas-driven theory of the Great Downzoning: in places which lacked an owner- occupier lobby for restrictions on densification, planning ideology seems to have been ineffective.
What happened at the end of the twentieth century is no less problematic for the planner-driven explanation of the Great Downzoning. From the 1960s onwards, the intellectual tide began to turn in favor of density, and by the 1990s, density was wildly fashionable again.
I once worked as the research assistant to a British government commission on the built environment, in the course of which I had the unenviable task of reading every major official document on British urban policy since the 1990s. From Richard Rogers’s Towards an Urban Renaissance (1999), through the Urban Design Compendium of English Partnerships and the Housing Corporation (2000) and the Commission for Architecture and the Built Environment’s By Design: Urban Design in the Planning System (2000), to the Greater London Authority’s Defining, Measuring and Implementing Density Standards in London (2006) and the Farrell Review of Architecture and the Built Environment (2014), they were united in praising urban density. Government documents like Planning Practice Guidance Note 3 (2000), Planning Policy Statement 3 (2006), and the National Planning Policy Framework (2012) endorsed and besought it. Every planning school in Britain teaches its students the importance of density, walkability, and mixed use.
This was not just empty talk. There have been huge increases in the population of virtually every British city centre since the 1990s, enabled and fostered by a range of public programmes. In 1990, fewer than 1,000 people lived in Central Manchester. Today, around 100,000 people do. But virtually none of this increase has taken place in private suburbs.
Instead, it has been concentrated in former industrial or logistics sites, in city-centre commercial areas, or in social housing, which the authorities regularly demolish and rebuild at greater densities. Towns without much of this, like Oxford and Cambridge, have stable or even declining populations in their city centres. An effort to enable more suburban densification nationally in the 2000s aroused much controversy and was soon abandoned. A more recent attempt to allow more densification in an area of South London, widely praised by planners, led to a local political revolution and the policy’s revocation.
This is not a British peculiarity. All over the West, urban density is valued by planners and officials. Governments pursue it, and have had some success in enabling it in industrial and commercial areas and through the redevelopment of public housing. In the United States, densification is the central theme of a vast YIMBY movement. But progress on densifying owner-occupier suburbs has been extremely limited, and the vast suburbs of the nineteenth and twentieth centuries remain almost untouched. The unified opinion of the planning and policy elites has proved ineffective in the face of homeowner opposition. If the idealist theory were the whole truth, and the Downzoning was purely the creation of planners, this would be extremely strange.
A materialist explanation of the Great Downzoning
The alternative theory is that the Downzoning was driven less by elite ideas than by the way that the Downzoning served the perceived interests of homeowners. This theory fits better with the evidence.
When people buy a home, they care not only about the home itself, but about the neighborhood in which it stands. This was why nineteenth-century developers started building whole villa colonies and streetcar suburbs rather than just individual houses: by developing entire neighborhoods, they could satisfy a wider range of buyers’ preferences, giving people the neighborhood of their dreams rather than just the house.
All else being equal, many people prefer neighborhoods built at low densities. Some of the perceived advantages of low density will apply virtually anywhere, like quieter nights, greener streets, more and larger private gardens, and greater scope for social exclusivity. Other attractions are more specific to certain contexts. Where urban pollution is bad, people seek suburbs for cleaner air. Where crime is high, suburbs are often seen as a way of securing greater safety. In eras with high levels of racism and increasing racial diversity, people moved to suburbs to secure racial homogeneity.
Restrictions on densification were a way of preserving these ‘neighborhood goods’ in perpetuity. The prevalence of covenanting constitutes extremely strong evidence that suburban people wanted this. Covenants were imposed by developers, whose only interest was in maximizing sales value. They judged that the average homebuyer valued the neighborhood goods that covenants safeguarded more than they valued the development rights that covenants removed. The ubiquity of covenants shows that, under nineteenth-century market conditions, density restrictions were generally desired by suburban residents. As we have seen, however, covenants were not very effective. The fact that public zoning followed under these conditions is not greatly surprising: it gave suburban people something they demonstrably wanted, and were not able to secure without the help of public authorities.
One question we might ask about this theory is: why did the Great Downzoning happen when it did, as opposed to at some earlier point in history? The answer is simple: it happened because of the emergence of planned suburbia in the preceding century. The whole point of planned suburbs was that they provided neighborhood goods like exclusivity and amenity: this was what made the large upfront costs of developing a neighborhood worthwhile. The impoverished peripheries of medieval and early modern cities may have had some of these goods by accident – presumably they were greener than medieval city centers, for example – but they would not have had many of them, because they had no way of excluding noxious land uses and ‘undesirable’ people. Many were regarded as dangerous and blighted places, where nobody would live if they had any alternative. Until the nineteenth century, suburban people frequently did not stand to lose much from densification.
The inhabitants of planned suburbia had some obvious political advantages over their predecessors, too. They were relatively affluent, which was an advantage for lobbying purposes in 1890-1950 as in all times and places. They were also extremely homogeneous, in the sense that most neighborhoods were planned for exclusively residential use by people of a given social class. This meant that their interests were likely to be aligned, and they could form a united front to campaign for their community’s interests.
One other feature of planned suburbs deserves mention, which is home ownership. In nearly all countries, planned residential suburbs were predominantly sold into owner occupation. If you are renting a property and its neighborhood declines in amenity, your economic loss is low: neither your income nor your asset value is affected, and if you move to another neighborhood with better amenity, your only economic loss is the cost of relocation. If you are a homeowner, the loss of neighborhood values destroys your wealth, as embodied in your property value. So you are much more invested in these neighborhood values, and probably more likely to fight for them.
A second question is why the Downzoning began in Central Europe, rather than in, say, England, where suburbia had existed for much longer. I offer three possibilities.
One possible explanation is varying state capacity, together with varying tolerance of state intervention. The princely states in Germany had been relatively activist in city planning throughout the early modern period: a number of German cities had planned street networks, and the authorities sometimes even micromanaged details of facades, as in Potsdam. In Berlin, the authorities enforced a minimum height limit because they felt that low-rise buildings gave the royal capital a ridiculously countrified appearance.
In the nineteenth century, the German state became much more activist than the French or Anglophone ones in a whole range of areas, pioneering mandatory health insurance, old age pensions, universal compulsory education, and a range of labor regulations. It is plausible that this attitude to government made zoning a more natural intervention for Germans than it was elsewhere.
Another factor was that pressure for densification was greater. As we have seen, Central European cities at the end of the nineteenth century had a strikingly clear distinction between a dense urban core and low-density villa colonies. When the expanding dense core reached a villa colony, the villa colony was faced with total transformation.
No other country had quite such a neat dichotomy. France did not have elite suburbs to the same extent, while Italy and Spain hardly had them at all. Anglophone cities had few purpose-built flats until the late nineteenth century, even in the urban core, and the ‘mansion blocks’ and ‘co-ops’ that then started to emerge tended to be targeted at the middle classes rather than the poor, alleviating one motive for exclusion. Perhaps, then, the German villa colonies were exposed to a form of densification that was particularly alarming to their residents. The late introduction of density controls in Britain and France may also be explained in this way: as we have seen, rent controls stymied flat building in the interwar period, thus relieving the political demand for restrictions on densification.
A third factor is that private sector density controls were probably varyingly effective in different countries. In Britain, most suburbs were developed under the unique ‘Great Estates’ system. Instead of selling homes outright, they sold extremely long leases of eighty or a hundred years, after which the properties reverted to the original landowner, called a ‘Great Estate’. The Great Estates thus retained an interest in safeguarding neighborhood goods in order to preserve the reversionary value of the properties. They thus acted as a form of quasi-government, enforcing against covenant breaches much more effectively than neighbors usually would. Some even provided local public services like parks and sanitation. As noted above, some other countries eventually developed systems somewhat analogous to this, like American homeowner associations. But in Britain they existed right from the start, and were ubiquitous. It is plausible that this contributed to the relatively lower demand for public density controls in Britain, in spite of Britain’s precocious suburbanization.
The Great Upzoning?
One element of the preceding argument may have puzzled some readers. I have argued that density controls were originally imposed because they increased property values, suggesting that allowing densification is net value destroying. But many housing reformers, including me, have argued that granting additional development rights to streets or neighborhoods increases their value, for the obvious reason that the additional floorspace is worth a lot. This has been confirmed by recent examples. For example, residents of the London neighborhood South Tottenham recently persuaded their local councils to let them double the height of their houses. All properties in the neighborhood enjoyed an immediate boost in value once the council agreed.
In South Korea, some neighborhoods are allowed to vote for much larger increases in development rights. This generates abundant value uplift, as a result of which residents of such neighborhoods nearly always vote in favor. In Israel, apartment dwellers can vote to upzone their building: this has proved so popular that half of the country’s new housing supply is now generated this way. How can such cases be reconciled with the argument I have given here?
The answer lies in how the housing market has changed since the nineteenth century. Over the last century, in large part because of the Downzoning, housing shortages have emerged in many major cities, in the sense that floorspace there sells for much more than it costs to build. This means that the development rights lost through density controls have become steadily more valuable. At a certain point, their summed value became greater than that of the neighborhood values for which they had been sacrificed. It was at this point that they became value-destroying.
It is also at this point that opportunities for innovative reforms like the one in South Tottenham start to emerge, because existing residents would now be net economic beneficiaries of allowing greater densities. The Downzoning was originally extremely desirable to residents, because the neighborhood goods it secured were more valuable than the floorspace it precluded. In places where that is no longer true, we should be cautiously optimistic about the prospects of reform. This is the reasoning behind proposals like street votes, which would allow individual streets or blocks to vote by qualified majority to upzone themselves to higher densities.
It is important to stress, though, that this is not true everywhere. Although housing shortages exist in nearly all Western countries, they do not exist in all parts of those countries. In fact, they are heavily concentrated in a small number of major cities. In most of the United States, sales prices are generally not far above the physical costs of construction: only in a handful of the major cities, like New York and San Francisco, are they consistently substantially higher.
In Britain, the housing shortage is heavily concentrated in the South East, with prices fairly near build costs in much of the rest of the country. In France, a large divergence has emerged only in Paris and certain areas popular with wealthy holidaymakers. Similar results are evident elsewhere in continental Europe, Australia, and Canada. In much of the West – probably the majority of its urban area – market conditions are not fundamentally altered since the nineteenth century, and density controls probably still maximize property value.
The fact that something maximizes property value need not make it morally good. Property value is determined by preparedness to pay. It may be maximized by preserving the view from a billionaire’s spare bedroom rather than by providing housing for a thousand destitute people, or by fulfilling the exclusionary preferences of snobs and racists. This means that there may be strong arguments for zoning reform even in places where its net effect on the value of individual neighborhoods would be negative.
Politically, however, reforms that reduce particular people’s property values are likely to be much more difficult. For more than a century, there has been an overwhelming tendency for residential suburbia to secure protections for itself against densification. We saw in the last section that this is hardly surprising: it is almost as though this neighborhood type had been designed to generate exactly this political outcome. The history of the Downzoning suggests it is very hard to triumph against the united interests of suburban homeowners.
The political upshot of this history, then, is that reform efforts should be focused. Making the principled case for density is useful, but unlikely to be sufficient: principled argument did not make the Downzoning, and it probably won’t unmake it either. Instead, campaigners should consider ways in which the changing structure of homeowners’ interests can be mobilized in the cause of reform. The examples of South Tottenham, Seoul, and Tel Aviv suggest that homeowners may be vigorous in pursuit of upzoning when they realize how much they stand to benefit from it. There is no reason why this could not be replicated elsewhere. Across the major cities of the West, homeowners are sitting unwittingly on one of the greatest mines of potential wealth in the history of the world. Once they notice, their actions may amaze us all.