The fundamental conundrum underlying many of our key urban problems is the conflict between broadly shared regional interests and impacts in local communities. While we generally all share an interest in housing affordability, and therefore it makes sense that we ought to support an expansion of housing supply in our region, it becomes a different matter entirely when it means more housing in our neighborhood. 

That’s exactly the issue plaguing the implementation of New York’s new mandatory inclusionary zoning law. The program–a cornerstone of Mayor Bill de Blasio’s housing affordability policy–requires developers which receive up-zoning permission to set aside a portion of units in newly constructed buildings for low and moderate income families. While the city-wide policy easily gained a majority of the City Council, the individual up-zoning approvals that would activate the “mandatory” portions of the law have run into difficulties. In the first two projects forwarded under the law–in Manhattan and Queens— strong neighborhood opposition has prompted the local city councilor to withdraw support for the needed zone change–effectively torpedoing the project.

This is a classic example of the a prisoner’s dilemma.  Everyone would be better off if each neighborhood allowed some new development (the added supply city wide would dampen rent increases), but individually the neighbors of new projects would rather than new buildings go up elsewhere. As long as the development approval is highly localized, this will be a persistent problem.

One of the most broadly popular ideas about urban planning today is that decisions should be made locally. After all, who knows better what a neighborhood needs than the people who live there? And what better way to squash any would-be Robert Moses than by empowering the people whose homes he would claim for some new megaproject?

The move to greater local democracy since the disastrously inhumane urban renewal period of the 20th century was undoubtedly necessary. But it has also created new problems that some officials, activists, and residents have been slow to acknowledge.

To begin with, it’s worth noting that “local” is a concept without a solid definition. When people object to policies coming out of Washington, DC, they often say that power needs to be brought back to the states. When they disagree with state policy, they’ll often discover a strong attachment to their region—say, downstate Illinois rather than Chicago. When they dislike something happening in their region, they reinforce the importance of their own particular municipality. And when their city government makes a decision they don’t like, they’ll appeal to the power of their neighborhood—which itself may expand or shrink its boundaries based on the issue.

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Image courtesy of the American Independent Business Alliance.


In other words, there’s no given geographic level at which people magically all agree with each other about what the “right” thing is. Instead, “local” politics tends to be about strategically choosing an arena in which there’s a strong enough coalition in favor of whatever policy you want.

Which, to be clear, is a totally legitimate way to go about democracy. But while the popular image of local power might be a diverse and representative group of families planning a new school or beating back an invasive and unwanted project from City Hall, localism also has a darker side. Much of the move to local planning since World War Two has taken the form of suburban municipalities created largely as a way to segregate their residents from “undesirable” people—generally blacks and the low-income. In fact, places with more fragmented governments (that is, places that are governed more “locally”) also tend to be more segregated. Partly as a consequence, they also have worse outcomes for people at the losing end of that segregation—so that, for example, health disparities between whites and blacks are significantly worse in metropolitan areas with more local governments per capita.

One of the greatest victories of this kind of exclusionary localism came in 1974, when a federal judge ruled that white parents who had moved beyond the Detroit city limits were exempt from any mandatory school desegregation programs, because to bus children across school district lines would be an affront to local control of education. But anyone who listened to the white parents in Nikole Hannah-Jones’ This American Life documentary excoriate their suburban St. Louis government for allowing non-local—and, of course, black—students to attend “their” schools just two years ago knows that this justification for local control is alive and well.

But localism doesn’t just give outlet to some of America’s less savory impulses. It can also pit municipalities or neighborhoods against each other, encouraging people who might be okay with, say, a moderate amount of affordable housing to advocate for having none at all.

To understand why, it’s useful to think of “the prisoner’s dilemma,” a kind of thought experiment that explains why people behave in ways that don’t lead to their own ideal outcome. (We should note that we didn’t come up with the idea to liken neighborhood development to a prisoner’s dilemma. Here’s an excellent interview with David Schleicher, a professor at Yale Law, making a very similar point.)

Imagine two middle-class neighborhoods, A and B. Each can choose a bundle of policies that are either “inclusionary” (allowing multi-family and subsidized housing, providing services attractive to the low-income, and so on) or “exclusionary” (allowing only large, expensive single family homes, eliminating social services, and so on). The residents of both places would like to be inclusive, as long as their neighborhood will remain predominantly middle class.

If both neighborhoods choose “inclusionary” policies, they’ll each become mixed-income, but mostly middle-class, communities. But if only one chooses “inclusionary” policies and the other chooses “exclusionary,” the “inclusionary” community will become disproportionately low-income, because it’s the only attractive, welcoming place for people who need affordable housing and social services.

In this situation, residents of both neighborhoods will be extremely wary of being the first to choose “inclusionary” policies, because unless the other neighborhood also chooses “inclusionary” policies very soon afterwards, their community will become disproportionately low-income. Any doubt about the other neighborhood’s commitment to choosing “inclusionary” policies—doubt that is more than justified, given the current state of American urban policy—will push them to choose “exclusionary” ones for their own community.

The fundamental problem here is that local communities don’t have the power to get other communities to commit to doing the “right thing”: only higher levels of government can do that. Importantly, though, creating this commitment doesn’t have to be any less democratic than smaller-scale decision-making: elected officials in a city hall or state capitol can work with their constituents to craft a policy that ensures all communities reflect the best values of their residents. This might look like a statewide law that requires every municipality to have a certain percentage of its housing designated as “affordable,” or a citywide plan that allows people from different neighborhoods to commit together to certain distributions of accessible housing and social services. Or, taking an international view, it might look like a state- or provincial-level government setting limits on the kind of zoning that municipalities can choose, restricting their ability to outlaw working-class and low-income housing types.

Unfortunately, there are precious few examples of higher units of government imposing rules that break this prisoner’s dilemma for cities. Massachusetts’ “anti-snob zoning” law, which allows affordable housing developers to ignore local exclusionary zoning in places where more than 90 percent of existing housing is considered unaffordable, is one. Another is in Oregon, where communities are required to zone land for a range of housing types, including apartments.

Research suggests that these kinds of laws can significantly improve the housing affordability landscape. Given the growing economic divides between our communities, we would do well to give them a second look.

Editor’s note: We’ve updated this post from a version we first published in September 2015.