In a recent study for the Mercatus Center at George Mason University, economist Steven Horwitz points out that restrictive zoning laws impede social mobility by making it difficult or impossible for the working class and poor to establish home-based small businesses:
Unfortunately, the pleas of both left and right-wing analysts alike have largely fallen on deaf ears. Ironically, despite the harm they inflict on the poor and disadvantaged, the nation’s most liberal cities also tend to have the most restrictive zoning laws. Cynics might argue that this is because the residents of these areas are actually “limousine liberals” who only pretend to care about the poor, but in reality support whatever policies put more money in their own pockets. In my view, the main culprit is not malevolence on the part of liberal voters but political and economic ignorance. The problem is not that voters are indifferent to the plight of the poor, but that most of them simply don’t realize that restrictive zoning exacerbates it.
Restrictive zoning policies also persist in part because they advantage politically well-connected developers who are often the only ones who can get construction permits in such an environment. If building new housing requires going through a byzantine permit process, the politically connected will have obvious advantages over newcomers who lack such clout. To be a success developer in a city like that requires getting in bed with the political class. As Donald Trump put it, “[l]ike all developers, my father and I contributed money to [then-New York Mayor] Beame, and to other politicians. The simple fact is that contributing money to politicians is very standard and accepted for a New York City developer.” Those with less political influence than the Trumps of the world often find it difficult to get building permits. The implicit alliance between well-meaning, but ignorant voters and politically connected developers is a classic “baptist-bootlegger” coalition, in which harmful policies are perpetuated by a combination of idealists and unscrupulous interest groups.
The harm caused by zoning is partially mitigated by the opportunity to vote with your feet for jurisdictions with better policies, including many in the south and southwest. Even so, restrictive zoning is a massive burden on the poor and working class, and deprives many of what would otherwise be their best housing and employment opportunities.