Why Zoning May Boost Community Economic Development

What is zoning?

Zoning is a planning process that is widely used throughout the world, especially in highly populated areas. However, it is not fully adopted in the United States and some communities, especially in rural areas. The first zoning ordinance was in New York City in 1916, and since then, it has been a practice in virtually every U.S. city. Zoning is the practice of dividing land in a community based on type of intended use. For example, a city may choose to zone different districts that limit development of dissimilar uses.

A specific area may be zoned to only accommodate residential housing, where, three miles away, there may be an area specifically designated to commercial and business zones. Local or state governments can choose to allocate land for agricultural use, conservation sites, historical districts, downtown commercialized and urbanized centers, residential areas, and industrial areas.

Supply and demand and competition for space

It’s simple economics. As supply goes up, demand decreases. When supply decreases, demand increases.

In terms of zoning, limiting where businesses can practice and reside can boost the economy in that area. If, in a community that uses zoning practices, there’s a specific finite space that is used for commercial business only, with all other parts of the community designated for other uses, then competition for that land in the commercial business zone is heightened. The limited and finite supply of land for commercial business venues increases the demand for the space (as opposed to no zoning policies, where a business could settle anywhere in a community, depending on centripetal forces – or forces that pull economic activity together in an urban center, or centrifugal forces that push economic activity away from an urban center).

Zoning limits the amount of land available for commercial business sites. With this being said, the demand is heightened for businesses and competition to have a firm in this type of business zone increases. If businesses must pay a higher price to be in an urban center, then more successful and productive the businesses that settle there tend to be, because these are the businesses that can simply afford the higher costs of developing in an expensive urban center. These businesses also usually encourage technological innovation in order to remain relevant and productive, especially if competition is high in order to stay in that urban center.

Also, because there is competition for space, zoning helps prevent overcrowding of land by limiting the amount and sizes of structures and parcels that are built on the land. Zoning also conserves environmentally sensitive areas by reserving certain spaces in the community to not sanction development.

Mixed-use development

Zoning promotes mixed-use development, or development that serves multiple uses, such as a cafe on the first floor of a building, but then commercial offices on the second floor. Some economic benefits of mixed-use spaces are:

The attraction of diversity and “creative” people

Because urban centers tend to be more affluent when zoned for the reasons previously stated, more affluent individuals and families tend to reside in these areas because the cost of living is high due to the higher quality of life. These people also tend to value “creative” economies, such as economies that foster and encourage museums, art, music, theater, night life, expensive boutiques and shopping, high class restaurants, and other nice things that make a city great. This is often referred to as “hipsterizing” an area. After this “hip” scene is taken off, there is ample opportunity for this community or city to capitalize on tourism, and therefore boost the economy more.

Also, zoning requires and promotes diversity. With a community’s land designated for specific uses instead of a not-zoned area that doesn’t have any strict standards for commercial businesses, agriculture, housing, industry, and historical sites, diversity of land use in a community is enhanced. This attracts all different kinds of people. These people, attracted to the various kinds of industry in the community, add to the economy and have a higher quality of life.

The creative economy

Zoning helps build on quality of place. Important features of a community such as arts and culture, open and natural/green spaces, vibrant downtowns, and centers of learning can be developed and strengthened. This will make regions more competitive than ever because it will create more opportunities for ideas to have an impact.

Also, zoning helps destroy barriers to creativity, such as disconnectedness and urban sprawl, which achieve both environmental sustainability and social organization.

The big picture

Sure, the hopeful result of a creative economy with a creative population with increased tourism in an area that is zoned could seem like a long-term goal, but it is certainly realistic. Given the fact that America’s most desirable cities are often the most organized, clean, and supports entertainment like in a creative economy, it is often the case that these cities are zoned. No, it is not a coincidence. Long-term economic planning (instead of focusing in the short-term) yields positive economic development and sociocultural results. After achieving economic sustainability, a prosperous local economy often then has the population that’s interested in environmental sustainability as well as the budget to cater to environmental design and services.

Big picture? Without oversimplifying the model, zoning is a success practice. There are large-scale and local demographic, political, and economic forces at play that intersect with local zoning practices to produce desirable outcomes. Zoning is only one piece of the puzzle that can be influenced in an attempt to reach economic prosperity, but it is not the only way. The triple-bottom line of economic balance, social equity, and environmental quality can be a fundamental result of smart and progressive community planning methods.

About The Author

Katelyn is an undergraduate student at the University of New Hampshire studying Environmental Conservation & Sustainability and Community Planning. Her passions are green urban design and planning, sustainable energy, green real estate, ecotourism, and environmental policy. She hopes to obtain a Masters degree in Urban and Regional Planning.