commercial zones allowed either residential or commercial use; and industrial zones allowed any use at all. Ambler Realty, which owned the 68 acres, wanted its land to be zoned industrial.
The district court agreed with Ambler Realty and ruled that zoning was unconstitutional. Six members of the Supreme Court, however, were sympathetic to the economic argument for zoning. “The development of detached house sections is greatly retarded by the coming of apartment houses,” wrote Justice George Sutherland for the majority in 1926, “which has sometimes resulted in destroying the entire section for private house purposes; that, in such sections, very often the apartment house is a mere parasite, constructed in order to take advantage of the open spaces and attractive surroundings created by the residential character of the district.” These apartments bring “disturbing noises” and traffic, while they deprive “children of the privilege of quiet and open spaces for play . . . until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed.” As a result, “apartment houses, which in a different environment would be not only entirely unobjectionable but highly desirable, come very near to being nuisances,” and thus are subject to the police power of the state.54
The Growth of Multifamily Housing
In 1992, a California land-use attorney named Kenneth Baar argued that the Euclid decision was the culmination of a “national movement to halt the spread of multifamily housing.” The implication was that, thanks to this movement, many urban areas had “inadequate production of multifamily housing.”55 In fact, the reverse is likely to be true: as previously noted, many cities actually overzoned for multifamily, while areas outside city limits tended to be unzoned through the 1960s, leaving plenty of land for multifamily housing if the market demanded it.
Moreover, though the 1920s were prosperous and saw far more housing starts than any previous decade in American history, the real growth over the decade in many cities was in multifamily housing. In the nation’s 255 largest cities, the number of single-family homes built in 1928 was just 4.7 percent greater than in 1921, but the number of duplexes was 10.5 percent greater, and the number of multifamily houses (three units or more) was 281 percent greater. At the beginning of the decade, multifamily housing accounted for less than 20 percent of new dwellings; by the end, it was over half.56
An economist named Coleman Woodbury, who would later become a distinguished housing scholar at the University of Wisconsin, wondered why multifamily housing had suddenly become so popular. One possibility was that tastes had changed and some people discovered that they preferred to live in multifamily housing. So in 1931, Woodbury surveyed more than 900 homeowners and nearly 800 apartment renters asking, among other things, if they would rather be renters or owners. Only 14 percent of homeowners said they wanted to become renters, while 53 percent of renters said they wanted to become homeowners.57
Another possibility was that high-quality urban transit had enticed people to live in higher densities so they could have access to that transit. Comparing transit improvements with the growth of multifamily housing, Woodbury found a weak correlation—but one that largely disappeared when he excluded the nation’s three largest (and most transit-intensive) cities, New York, Chicago, and Philadelphia.58
Woodbury did find that wealthier cities seemed to have more multifamily construction, which he took to mean that apartments were attracting well-to-do families.59 But it is also possible that the apartment boom was stimulated by low-income families in those cities who were priced out of the market for single-family homes. This possibility is supported by Woodbury’s finding that cities with higher property taxes tended to have more multifamily construction, with the most construction in the poorest neighborhoods of those cities. He also found a “slight degree of association” between high residential land values and multifamily construction.60
Woodbury found the strongest correlation between zoning and multifamily construction. “Zoning in almost all cities has, to some extent, stabilized land values. This steadying of values and the assurance of the character of a district on which it is based, according to this line of reasoning, should enhance the desirability of home ownership and act to increase the building of single-family houses.” This stabilization suggests “that zoned cities probably have experienced the apartment house growth in less degree than unzoned cities,” Woodbury hypothesized. “In fact, the opposite conclusions are clearly indicated,” he found. The 88 cities that had no zoning saw less than an 8 percent increase in apartments, while the 167 cities with zoning saw more than a 33 percent increase in multifamily housing.61 Cities that had passed new, stricter building codes also saw more multifamily construction.62
Sixty years after Woodbury’s research, housing historian Gail Radford offered one more explanation for the increase in multifamily construction during the 1920s: mortgage bonds. These bonds were similar to the bonds that played a major role in the 2008 financial crisis, but in the 1920s they were limited to commercial developments, including multifamily housing. Before the introduction of such bonds into the real-estate market in the early 20th century, builders of large housing projects had to finance those projects with short-term, high-interest loans. Only after construction was complete could they get longer-term, lower-interest loans, and then only for about half a building’s net worth. Bonds made it possible to get more money up front at lower interest rates, Radford suggests, and thus precipitated a multifamily construction boom.63
Radford’s argument is superficially persuasive, but it doesn’t explain two things. First is timing: Though mortgage bonds were first issued around 1900, only $500 million of such bonds had been issued by 1920. Yet during the 1920s, another $5.5 billion were sold.64 Why did they become popular during the 1920s? Second is geography: Radford’s analysis looked exclusively at Chicago, one of the cities where zoning had increased land and construction costs. Mortgage bonds were available to developers in any city, yet they were most heavily used in the 1920s in cities with zoning.
More easily available credit for multifamily construction may have played a role in the 1920s apartment boom. But the main story was that middle-class planners and zoning boards, using the deed restrictions of developers like J. C. Nichols as models, enacted their biases and preferences for what housing should be like into city zoning ordinances. This action boosted the value of land zoned for single-family residential, especially in cities like Los Angeles and Portland, Oregon, that had overzoned for multifamily at the expense of single-family, effectively pricing working-class families out of the market for single-family homes. Developers then built multifamily housing for working-class and lower-income families.
In 1931, attorney Edward Bassett, known as the “Father of Zoning” for his role in writing New York City’s original zoning ordinance, accused city planners of going well beyond the original purposes of zoning, which he said were to preserve “public health, safety, morals, and general welfare” and to “not be discriminatory.” He noted that some cities “simply transferred private restrictions relating to cost, peaked roofs, and style of architecture into a zoning ordinance.” Others had zoned schools, hospitals, and churches out of single-family areas and forced them into multifamily zones, effectively making these services inaccessible to many residents of single-family neighborhoods. Such exclusions were “unreasonable,” Bassett said, because they were “not based on the public health, safety, morals, and general welfare, but upon a desire to employ this new device of zoning to make exclusive districts more exclusive.”65
At the other extreme from Bassett (at least in 1931), an architect named Charles Cheney argued that zoning boards should have absolute authority over the aesthetic character and architectural design of all new buildings. He estimated that 90 percent of new buildings, whose dollar value was about three-fourths of all new construction, were “so ugly, so badly planned, so inappropriately located, or on such narrow or inconvenient streets as to be a liability instead of an asset.” He arrived at this amount from estimates of the number of buildings constructed without the
