Exclusionary Zoning: Policy Design Lessons From the Mount Laurel Decisions

Abstract

ABSTRACT Exclusionary zoning takes many forms, but always aims to limit economic integration within certain communities. Understanding the effectiveness of programs designed to reduce exclusionary zoning yields insight for future policy design, and the program that followed the Mount Laurel decisions in New Jersey remains relatively unexplored. The program created the Council on Affordable Housing (COAH), which used an incentive-based structure to implement affordable housing requirements. Municipalities that volunteered to meet their requirement received legal protection from zoning lawsuits. They could also engage in a regional contribution agreement (RCA), which allowed them to pay another municipality to complete up to 50% of their affordable housing obligation. Using probit and multinomial logit models, I investigate two questions concerning the program’s design: (a) Did COAH’s incentive-based structure succeed in attracting those municipalities with the greatest need for affordable housing? And (b) Did RCAs exhibit a pattern of high-income municipalities sending their affordable housing obligations to low-income municipalities? I find that the program succeeded in attracting high-income municipalities to participate, but that these municipalities were also likely to use RCAs to send housing units to low-income municipalities. I argue that the program’s design undermined the Mount Laurel decision’s original intent by limiting economic integration in high-income municipalities.