Affordable Housing and Social Engineering in New Jersey

Timothy B. Lee -- Writer with Ars Technica

A few weeks ago I wrote a post questioning conservative antipathy toward the New Jersey Supreme Court's famous Mount Laurel decision. That's a decision that held that exclusionary zoning schemes that make it effectively impossible to build low-income housing in a particular municipality violate the New Jersey constitution. Mike Proto, a spokesman for the conservative activist group Americans for Prosperity, emailed me the following response:

Forcing high density, low income housing into every town in New Jersey is hardly the epitome of a free market. Quite to the contrary, it is social engineering and central planning run amok and everything conservatives rightly oppose. This isn't about property rights, per se. It's about a renegade, activist court imposing its policy preferences against the plain language in the state constitution. Citizens are free to live where they please so long as they are successful enough to do so. And New Jersey communities, through a democratic process, ought to have the right to determine the destiny and character of those communities. Mt. Laurel has stripped this away.

This paragraph exhibits an impressive degree of cognitive dissonance. On the one hand, Proto says, the Mount Laurel decision is "social engineering and central planning run amok." On the other hand, New Jersey communities "have the right to determine the destiny and character of those communities," by which he appears to mean enacting laws that effectively exclude those who are not "successful enough" for the community's tastes.

It's true that many New Jersey towns have enacted zoning regimes whose apparent purpose is to determine the "character" of their communities by excluding those who are not "successful enough." It seems to me that free-market conservatives ought to be opposed to these schemes, which violate property rights and are, in fact, "social engineering and central planning run amok."

Admittedly, the New Jersey Supreme Court's Mount Laurel decisions were not, by any stretch of the imagination, a resounding endorsement of unfettered property rights. Rather than striking down exclusionary zoning altogether, the court ruled that towns had an obligation to ensure their zoning schemes made room for a minimum amount of low-income housing. There are a number of ways towns can comply with this constitutional obligation. One option is general housing deregulation. Another is more focused "inclusionary zoning" schemes that mandated certain new development projects include a low-rent units. Towns have the option to directly subsidize the construction of affordable housing units. And the Mount Laurel case also established a "builder's remedy," which allows any developer who believes a town's zoning is too restrictive can sue for the right to build more densely than the local zoning rules allow.

Most towns went with the inclusionary zoning and subsidy options because that approach gives them maximum control over how many units of affordable housing get built. It's true that inclusionary zoning is a kind of central planning, but no more so than than the exclusionary schemes they've replaced. And the blame for these schemes rests primarily with the towns that chose to enact them rather than adopting a more free-market housing policy.

Towns realize that a free market would produce significantly more low-income housing than their current zoning schemes allow. In other words, when Proto says the New Jersey Supreme Court is "forcing high density, low income housing" into New Jersey towns, what he means is that market forces would be providing more high density housing if the law allowed it. The court is simply nudging towns toward allowing builders to meet market demand.

In short, the Mount Laurel decisions were a step toward a freer market for housing in New Jersey. Personally, I would have preferred a more ambitious ruling that struck down exclusionary zoning ordinances as violations of property rights. Such a ruling would have been both more effective at reducing housing costs and would have required less micro-management by the courts. But rather than joining forces with left-of-center affordable housing groups to promote a general deregulation of the housing market, conservatives in New Jersey have found themselves on the pro-regulatory side of the debate, championing the right of towns to enact exclusionary zoning regimes. Apparently "social engineering and central planning" isn't so bad when it's enacted in wealthy suburbs.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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