Old Town Road traces a choppy, swerving path that marks the southern edge of Trumbull, Connecticut. It is shaded by maples and oaks that frame the sensible New England homes of an affluent suburb. Across the double yellow lines of Old Town Road are similar homes in the city of Bridgeport, one of the poorest places in Connecticut.

Last July, Trumbull’s Planning and Zoning Commission approved a zoning change to allow a 202-unit apartment complex to replace a vacant office building a few blocks away from Old Town Road. Key to getting approval was that the apartment building was designed with only one- and two-bedroom units; the developer estimates that only 16 school-age children will live among the 202 new units.1 For Trumbull’s residents, eager to maintain their school district’s third-in-the-state ranking,2 a larger influx of potentially poor students might have been a deal-breaker.

According to Zillow’s estimate, the three-bedroom house at 1230 Old Town Road could sell for $287,000. Across the street in Bridgeport, a very similar home at 1257 Old Town Road is worth only $214,000. The Zillow interface helpfully informs the prospective buyer that any children living at 1230 Old Town Road have the right to attend Frenchtown Elementary School, rated 9 out of 10 by GreatSchools. Children on the south side of the street attend the Cross School, which rates a 2,3 and is part of the worst municipal school district in the state, according to the state’s own ranking.4

Honestly, the north side of the street is a bargain. A family can invest just $73,000 extra in purchasing a house, and receive thirteen years of the best education Connecticut has to offer for each of their children. For a family with three kids, that amounts to $1,871 a year for excellent education—and one can sell the house and recoup the investment when the kids graduate. Given the local educational disparities, and the broader trends in the United States, the Planning and Zoning Commission’s decision is a pleasant surprise.

The Voters

The socioeconomic evolution of the United States in the twenty-first century will be heavily determined by the power of two local institutions: the zoning board and the school board. This prediction is not nearly as bold as it might seem; the two boards have heavily determined our evolution for the past forty years, and no one is about to challenge them.

Since the upheavals of the 1970s, a muscular upper middle class has emerged as the economy’s primum mobile, the ideological core of both political parties, and the decisive voice in educational and land-use policy. This class has been widely discussed. They are Chris Arnade’s “Front-Row Kids,” Robert Reich’s “Symbolic Analysts,” Charles Murray’s “Belmont,” and Richard Reeves’s “Dream Hoarders.” Venkatesh Rao says they are “above the API.” Robert Putnam (in Our Kids) refers to them as “affluent,” “upper-class,” or even “rich.” They include (but exceed) Richard Florida’s “Creative Class” and David Brooks’s “Bohemian Bourgeois.”5 They live on the north side of Old Town Road. (The truly elite—the most successful businesspeople and politicians—are largely drawn from the upper middle class and share its values, if not its interests.)

With no coordination, no class awareness, and no unity on the controversies of national policy, upper-middle-class suburbanites have nonetheless governed their suburban localities in near lockstep around the country. Using whatever tools are available, upper-middle-class citizens have pursued high property values and high-quality schools. Although those goals are eminently reasonable, they have unintentionally become the wedge that is separating the upper middle class from the rest of the country.

The Zoning Board

The San Jose Metropolitan Statistical Area (MSA) was first called “Silicon Valley” in 1971.6 That year, the microprocessor was invented in Mountain View by a team at Intel. An area of rapidly growing suburbs with a high-tech, market-oriented knowledge industry, it was home to 0.55 percent of Americans by the middle of the decade. Computers became essential business equipment, then essential personal accessories. The Valley boomed. It was home not only to the most exciting industry of its era, but also to the venture capital markets that funded its growth. There was money and, with it, the demand for all the services that grow around a successful core. But the boom took place just as voters in California were giving their zoning boards strong anti-growth mandates.

Forty years and trillions of dollars later, the San Jose MSA is still home to just over 0.6 percent of Americans. Its population share peaked in 1989.

This lack of growth is unprecedented. When Houston financed and refined the original Texas oil boom, it added 0.44 percentage points to its share of the national population.7 Detroit was the global headquarters of the high-tech industry of its day and grew from 1.4 to 2.3 percent of the U.S. population over forty years. Metropolitan Washington, D.C., a boomtown built around the growth of the federal government, tripled its 1930 population share by 1970.

This hoarded prosperity is not merely a local problem. Chang-Tai Hsieh and Enrico Moretti estimate that if the Bay Area and metropolitan New York City had merely average levels of land use regulation, total U.S. income would be 9 percent higher.8 Kyle Herkenhoff, Lee Ohanian, and Ed Prescott use a different approach but arrive at a similar conclusion: if regulation levels had been held at 1980 levels, total income would be 9 percent higher today.9 A third paper is a little less optimistic: Andrii Parkhomenko estimates that the gross domestic product hit from the post-1980 increase in zoning is “only” 2 percent.10

All these papers are based on the comparisons between regions. But the policy battles typically play out within regions, in slow-motion arms races of town versus town. Interregional migration may be the main macroeconomic channel through which zoning impacts growth, but intraregional migration is the main source of movers—and “not-in-my-backyard” (NIMBY) anxiety—on a local level.

As it is usually implemented, land-use regulation consists of a forest of rules about the size, purpose, and environmental impact of any new construction or extension of a property. Strictly speaking, “zoning” codes were originally about “use”—the SimCity-style color codes that contravene millennia of urbanism by segregating homes from shops and jobs. It is common, though, to use “zoning” as a shorthand for all building restrictions.

Crucially, zoning codes are not typically followed. The code defines what may be built “by right” in a given spot. The rules are frequently ratcheted so tightly that few of the existing buildings in a place would qualify under the modern code. In Manhattan, 40 percent of all structures could not be built today, due to the city’s restrictions on height, density, and commercial-to-residential ratios.11 In the dense, diverse city of Somerville, Massachusetts, just 22 residential buildings meet the current zoning code. Not 22 percent—22 buildings.12

Disneyland-inspiring Main Streets and charming old neighborhoods are mostly regulatory anachronisms as well. Mount Rainier, Maryland, and the Kenwick neighborhood of Lexington, Kentucky, would no longer conform to the zoning laws that prevail there.13 The Norman Rockwell homes in the Village of Trumansburg, New York, could not be built today without a zoning variance.14

In Mansfield, Massachusetts, minimum lot sizes have gradually been ratcheted up to well beyond what most existing homes have. In the parts of town with developable land, minimums are set at sixty thousand square feet. Closer to the town center and state-subsidized commuter rail station, the minimum lot size was recently ratcheted up to forty thousand square feet—about an acre—on the slim chance that a developer could find that much vacant land not set aside in one of the town’s several conservation areas.15

Construction proceeds by means of discretionary “variances”—ad hoc deviations from the established code that give permission to a specific property owner for a specific project. Variances are often packaged with quid pro quo shakedowns. The pliability of the zoning board can depend on the political donations of the developer, the attitudes of neighbors, or any of the arbitrary moods and biases that move petty tyrants to mercy or wrath.

Zoning boards should not have this unaccountable power. But they cannot be blamed for the antidevelopment mood that pervades their communities. Accusations of corruption arise not when they turn down a proposed project (usually in accord with local feeling) but, rather, when they permit one that is unpopular.

The political mechanics of anti-growth land use decisions differ from place to place. In Texas, where private property rights are strong, neither municipalities nor neighbors have much recourse to prevent greenfield development. However, developments as large as The Woodlands, a suburb of Houston, operate as de facto municipalities. In The Woodlands, community association covenants impose deed restrictions that limit redevelopment. Even so, residents of the area are attracted to the idea of incorporating themselves as a city, with arguments in favor including the attractiveness of finding new tools to limit growth.16

On the West Coast, the California Environmental Quality Act (CEQA) allows anyone at all to anonymously file environmental concerns about a potential project, putting the burden on a builder to prove that a project is not an environmental threat. The lawyering and delays cut into the bottom line of potential construction—private or public, with the result that much less is done.17 In Lakeside, CEQA was used by local businesses without a fig leaf of environmental concern to try to prevent a big-box competitor from entering the market.18 In northern California, CEQA is being used to prevent the state from restarting service on a defunct passenger railroad line.19

In New England, Puritan-era town meetings offer extensive power to concerned neighbors to have their voices heard in local decision-making. California also has a strong direct-democracy tradition. The effectiveness of growth prevention in both these systems underscores the fact that increased democracy will not untie the two-board knot.

To perform an end-run around suburban politics, Massachusetts passed a law to give developers the right to build densely if at least 25 percent of the new units are offered at below-market, “affordable” rates. Faced with such a development—which is clearly legal by Chapter 40B of state law—the Town of Ludlow futilely retained counsel in hopes that they could somehow stop the influx of poorer residents.20

Economists have relied on the “homevoter hypothesis” to explain the enthusiasm for anti-growth movements among neighbors.21 To oversimplify a nuanced body of work by William Fischel, homeowners see new developments as an increase in the supply curve that will lower the equilibrium prices of their own homes.

The homevoter hypothesis effectively explains why homeowners favor the existence of antidevelopment zoning laws. But it does not explain the energy with which NIMBYists oppose new construction—after all, no single development makes a palpable shift in the total housing supply in a large city. The ideal policy, from an individual landowner’s perspective, is to have his own land free to develop while everyone else’s is tightly restricted.

Yet evidence from markets as diverse as Massachusetts22 and Florida23 suggests that residential land-use restrictions are in fact stricter than the home-value maximizing point—at least those homeowners who have large lots would benefit from less strict zoning. The gains from pro-development zoning are most obvious in the case of a small municipality, in a high-price metropolitan area. Without greatly altering the regional supply curve, local landowners could reap large profits from cashing in on their land. But observation suggests that areas comprised of small municipalities (the Bay Area and New England, for example) have some of the country’s strictest rules. Likewise, the political play around individual developments usually attracts fierce opposition from local neighbors, not from regional groups.

Intuitively, it seems reasonable to believe that the benefits of development flow principally to those making the relevant transactions, and that the costs are diffused across the neighborhood. The economic study of public choice finds that in cases of diffuse costs and concentrated benefits (or diffuse benefits and concentrated costs), the concentrated side usually wins. Therefore, diffuse regional supply and demand concerns are hard to square with the vigor of NIMBYism.

An important refinement of the homevoter hypothesis is the indirect influence on home values through school quality. Here, there are three key facts: (1) local school areas and school districts are much smaller than regional housing markets; (2) school quality is capitalized into home prices; and (3) peer effects in school are significant and intuitively recognized.

The first fact can help account for localized opposition to developments which are too small to affect metropolitan housing prices appreciably, but large enough to add a handful of children to the public school. Local opposition on school-related grounds is both more rational and more emotionally charged than opposition founded on broader supply-curve concerns.

The second explains why those who do not attend the local school care about its quality. The third explains why lower-income neighbors—especially those whose income and education can be guessed at from their outward appearance—receive a cool welcome. When a developer proposes to build homes or apartments that would be marketed toward a large group of such outsiders, NIMBYists go to DEFCON 0.

There are other reasonable hypotheses to explain NIMBYism. In the era of excruciatingly slow construction projects, the nuisance of a local construction site may reasonably explain some opposition. Local congestion concerns are also a candidate for NIMBYism; however, the same NIMBY groups often oppose infrastructure improvements on the grounds that they would enable greater growth.

NIMBY efforts are invariably justified as opposing changes to the “character” of a locality. Local character is a valuable virtue, but the justification is wearing thin. Is the preservation of local character really a plausible excuse to exclude construction of buildings similar to what is already extant? Does the permitting of big-box stores on a bypass road, while clamping down on density or commercial activity in established neighborhoods, maintain the character of a locality or eviscerate it? One need not theorize; the evidence is there, in every suburban county.

In some cases, local character really is a good reason to oppose new construction. For example, Jane Jacobs wrote about “cataclysmic money”—huge private or civic investments that razed entire blocks for single-use monoliths.24 Neighbors have good reason to oppose highways or stadiums that will realign the entire purpose of an area. The same logic does not hold, however, when new investment will marginally increase population or permit businesses hoping to serve and employ locals.

The case for preserving local character should focus on the patterns of daily life and community in the locality, not on the outward appearances of buildings, and certainly not on the outward appearances of the newcomers. What is most worrying is that America is running out of places where dynamism is part of the local character, and our national character—mobile, dynamic, self-reinventing—is suffering.

To the extent that protection of local schools is an important aspect of the antidevelopment impulse in late American life, we should expect zoning to become more stringent, not less. Homeowners are attentive and sophisticated enough to understand the quality and trajectory of local schools, and they know how much more they paid to live in their particular suburb than they would have, had they chosen a neighborhood with a slightly different “character.”

The School Board

School district lines do not typically show up as political subdivisions on colorful maps. Yet their boards impotently attempt to steer what, for most citizens, is the most consequential interaction between government and the individual. “Consequential” because of the dominance of education in defining social interactions in America today. “Impotent” because so little of the value of education is within the current scope of administrators’ decisions.

The case that education is massively important in American life hardly needs to be made. Charles Murray shows that educational attainment is a powerful predictor of divorce, disability status, marital childbearing, and other social indicators.25

Not all of the returns to education are causal—far from it. The reward for being college educated is being the kind of person who is college educated. And, as parents are keenly aware, it is difficult to become the kind of person who attends college without previously attending decent primary and secondary schools and socializing with the college bound.

Despite constituting a supermajority of American adults, those without college degrees have almost vanished from the country’s major institutions. Noncollege graduates are rarely considered for entry-level positions in the business world, let alone for management positions. The last president to lack a college degree was Harry S. Truman. The last senator was Mark Begich. Just 5 percent of the People’s House lacks a college degree.26

Still, American colleges are quite good, and our universities swamp global ranking lists. The experience of college education in the United States is much more egalitarian and individualized than in continental Europe, where small class sizes are rare and professors live in unapproachable (although often impecunious) splendor. In rich parts of the developing world, an American or at least an American-style education is a highly sought-after status symbol.

Primary and secondary education in the United States is much less impressive. Pearson’s Learning Curve ranks the American education system fourteenth out of forty countries.27 The Program for International Student Assessment, which tests school-age children, ranked the United States thirty-eighth in the world.28 The relative rankings of the United States and northern Europe reflect our embrace of competition. In the United States higher education is highly competitive, and K–12 education largely takes place within local monopolies. In Northern Europe, many countries allow extensive choice among public schools but have nationalized university systems with little variation or competition.

Returning to the United States, a greater problem than the middling level of public schooling quality is the variance and inequality in service across communities.

The various attempts at reform of public education in the United States are well beyond the scope of this article. But they have in common one salient feature: good suburban schools have not been touched. Those schools—the ones in places like Trumbull, Connecticut—are defended not just by teachers’ unions and bureaucrats but by the majority of parents.

Those parents have purchased a valuable right. Inseparable from their mortgage are the attendant school district rights. They bought an even-numbered house on Old Town Road, not an odd-numbered one, and a reform that opened their school to odd-numbered-house kids would hurt both their pocketbook and, they fear, their children’s prospects.

In a revealing study of New York City parents, a new working paper shows that parents use peer characteristics—the obvious one being race—as their primary guide in choosing a high school under the school system’s city-wide high school lottery.29 The authors note that the parents are not economically irrational: the schools with high-achieving peers also add significant value.

Academic research confirms that there are substantial peer effects at various levels of education. Even the random assignment to teams for a single week in the freshman year of college has lasting effects;30 how much more the peer effects of one’s entire precollegiate education?31 As anyone who has been a teenager knows, the available peers influence not just how one learns but how one behaves. Parents everywhere are afraid that a bad influence will lead their children astray; upper-middle-class parents are in a position to do something about it.

Thus we do not, in the suburbs, have a system of public schools. We have private, government-run schools. A public good is something available to all—non-excludable and non-rival in consumption, like clean air or a radio broadcast. But access to local school is eminently excludable: those who do not buy or rent a home in the right area cannot access it. And it is at least somewhat rivalrous in consumption, since crowding and peer effects play such a large role, at least in the perception of educational quality.

The hedge that protects these private investments is zoning. Without strict land-use policies, parents would be able to vote with their feet for better schools—crowding into districts that are doing a good job, penalizing those that are not. To accommodate the new housing demand, landowners would subdivide their lots, build multifamily housing, or replace cottages with family-sized homes. This process still happens in exurban areas where land is cheap and lightly regulated.

Clearly, there are costs as well as benefits to a vote-with-your-feet system of educational competition. The “winning” towns have to reckon with increased volume and add infrastructure. The losing towns face the downward spiral of home value decline, tax increases, and vacancies that plagued inner cities in the 1970s and ’80s.

As Hayek might have said, someone put this fence here for good reason. And yet, the two-board knot is cutting deeply into the finances of middle-class families and the opportunities of children who aspire to be middle class.

Modern attempts to offer more parents a say in their children’s education have been based on breaking out of the district-school model. Mostly pursued in struggling school districts, charter schools have tackled some of the toughest educational challenges, trying to create the kind of people who get college degrees, without the benefit of effortlessly college-bound peers.

Studied with a rigor far beyond what went into the creation of our existing school or land-use systems, charters have had their greatest success in improving parent satisfaction. Some charter models have proven records of success in quantifiable outcomes;32 others have merely copied the curricula and cadences of the traditional public schools.33 A less-noticed benefit is that competition from charters has perked up some traditional schools.34

Where charter schools have had notably less success is finding purchase in the suburbs, especially those with excellent school systems. Suburban parents with good schools are not hungry for change, nor are philanthropists interested in fixing their problems. What is more, defenders of the school district recognize that school choice—especially if it were to cross the district borders—would be a threat to their investment. Local school district employees are vigorous defenders of the status quo, and without a strong pro-choice movement of dissatisfied parents, their opposition is often sufficient to squash entry.

As a result, Montgomery County, Maryland, a wealthy and diverse suburban area of about a million residents, has no charter schools. Statewide, thirty-five of Maryland’s fifty-one charter schools are in Baltimore; ten more are in working-class Prince George’s County.35 Montclair, New Jersey, has shot down charter school proposals half a dozen times, claiming recently that a French immersion school proposed by two residents was a poor fit for their diverse, affluent community.36

The newest and most aggressive form of public school choice is taking place at the state level, far enough removed from individual school districts to make some headway. Education Savings Accounts (ESAs), adopted in six states so far, rebate schooling funds directly to parents, with the requirement that all of it be spent on education, either currently or by saving for college. Early in 2017, Arizona expanded the eligibility for ESAs to make them universal, although aggregate participation is tightly capped. But advocates for the status quo are fighting back by putting the program to a statewide referendum before it becomes an established option among middle-class families. Even if the referendum fails to repeal the law, the cap on participation would forfend major competitive pressure on existing models of education. Failure in the referendum would be a resounding warning shot across the bows of ambitious reformers elsewhere in the nation.

Without including suburban children, the school choice movement is destined to remain a fringe, reformist option. The logic of peer effects and suburban nonparticipation dictates that schools of choice will remain a mission to the children of poorer families. Charter schools are often accused of “creaming” the public schools, taking away those with the most motivated parents. This does not, empirically, appear to be the case.37 The bigger selectivity issue is that entering a charter, at present, usually implies surrounding oneself with peers from families whose parents did not go to college.

Perhaps the majority of suburban students and parents have no need or desire for school choice. But their opting out—and the possible defeat of universal school choice plans like Arizona’s—will deprive those who do need options of a small cadre of peers with college-educated parents and high social capital. Even if Arizona-style plans succeed, the power of the present equilibrium militates against a major change. Schools of choice are likely to remain a fire escape for the underserved and mismatched without becoming a new dominant service model.

The Future

Universally available, school choice would probably be a net benefit for most of the American K–12 system. It would make schools more like colleges: competitive, service-focused, and obsessed with ranking. Predicting the consequences of an entirely new educational equilibrium on the low end of the educational market is harder. Would a choice-based paradigm lead to even more refined segregation? Or would it enable transformational schools to enter any educational market, using brand power to communicate quality to parents of every socioeconomic status?

We will never find out. The current paradigm is not going anywhere. For every upper-middle-class parent whose child is frustrated with his current academic options, there are a dozen more who are happy with the schools and thrilled with their homes’ values. Full-blown educational choice would erase the meaning of Old Town Road, and equalize home values across those two yellow lines.

The two most stable organizing principles of the political economy of the American family in the twenty-first century are that educational access is purchased with one’s home, and that established suburbs do not change their character.

The two-board knot holds in place the shape of our cities, the lengths of our commutes, the structure of our racial politics, our geography of red and blue, and our new class resentments. Great shifts in American life, as the urbanization of the early 1900s or the postwar suburbanization, will not take place without the participation of the upper middle class, and they will not participate in the unwinding of a paradigm in which they are comfortable.

The school board protects the zoning board from pressure to change, because there is no majority in favor of opening up a high-quality school system to lots of new entrants. The zoning board protects the school board from pressure to change, because radical educational reform is a risk to the suburban home values that constitute so much middle-class wealth.

Reformers must make little plans. Big plans would stir men’s blood to oppose them and see to it that they are not realized. The two-board knot is a living thing, asserting itself with ever-growing insistency.38

This article originally appeared in American Affairs Volume I, Number 4 (Winter 2017): 3–18.

Notes