Bloomington’s Zoning History Offers a Lesson for Today

By Chris Sturbaum

Bloomingtonians often tout the city’s exceptional commitment to progressive values and social justice – so much so that we often forget where we are and how recently those values evolved here. We’re in southern Indiana, and like most of the surrounding municipalities, even Bloomington has a long, shady history with respect to racism and land use.

That history needs to be a part of our local memory, including uncomfortable issues involving the activities of the Ku Klux Klan here. Segregation by city ordinance had been ruled unconstitutional in 1917 and the city’s zoning of 1942 followed the law. But racial exclusions were common features of covenants in privately developed subdivisions from the 1910s to 1948, the year when the Supreme Court ruled that these too were unconstitutional.

Advocates for the city’s new proposals to remake Bloomington’s zoning map and land use practices have argued that single family zoning, which they term “exclusionary,” is historically a tool of deeply rooted institutional racism. Certainly, segregation is a recurring theme in Bloomington’s history, but its connection to land use and zoning requires more objective examination.

Profit in Student Rentals

Our current land use story really starts with the Democrats’ getting power for the first time in Bloomington in the early progressive “hippie” era of the ‘60s. When the Democrats took power here, rental houses were deliberately packed with students, which was being allowed through routine spot-zoning changes. Student housing was the most profitable housing use, and owner-occupied houses were rapidly being converted to student rentals, depleting the affordable stock of houses for ownership. On the west side, under-maintained houses were being rented into the ground with demolition as their ultimate end. There was no rental code, so safety was a serious issue.

A well-meant zoning change by the newly elected Democrat majority, led by Mayor Frank McCloskey, created an occupancy limit of five. This seemed equitable and a progressive idea at the time. But this did not even begin to alleviate the problem. It actually stimulated investment and resulted in 20 more years of unintended rental conversions and negative impacts on the core neighborhoods’ livability.

Local government didn’t really grasp the dynamics of a college town with residents living alongside an expanding university uninterested in housing its students. But investors understood all too well what this meant. As previously single family homes were filled with students, people continued to sell out to investors and left the neighborhoods as they were rapidly becoming over-occupied. Parking became impossible and noise quickly became an issue.

In response to citizen input, a new comprehensive plan under Mayor Tomi Allison, resulted in the downzoning of 1993. This is when the single family zoning we live with today was enacted. It gradually re-stabilized the neighborhoods, while keeping all multiplexes and multifamily rentals in place through grandfathering. This resulted in reinvestment in the neighborhoods by homeowners who, over the last 25 years, helped make these core neighborhoods some of the best places to live in Bloomington – not just for families but for diverse households.

There was no zoning at all in Bloomington until 1924, so the early neighborhoods evolved as traditional walkable neighborhoods, of the kind that had been built for centuries. The core neighborhoods remain nearly 50% rental citywide; on the west side, some neighborhoods are more than two-thirds rental. Many of these rentals are in the aged houses, which makes them naturally affordable. Most of Bloomington’s Section 8 housing is on the west side, in these neighborhoods. Many multiplexes remain from the earlier zoning and the balance has been working for nearly 30 years.

Hundred-year-old houses need care, and most have been well maintained under the current zoning. These are some of the city’s densest neighborhoods, but the current density is livable, parkable and appropriate for this mix of ownership and rental housing.

Unintended Consequences

This is the history that needs to be told…how well-intentioned changes to zoning can have large unintended consequences that last a generation or more, and how college towns have different dynamics from those of other cities with respect to the influence of rental properties on the overall housing market.

Local citizens lucky or industrious enough to have the means have found that homeownership is the only affordable way to live in Bloomington. That also is a story that must be told, as we consider Bloomington’s newest proposal to invite local investors, corporate real estate investment firms and their rental developer partners to remake the last remaining neighborhoods where working class people still have a realistic shot at homeownership. This would be déjà vu all over again.

Practically everyone (except the highly privileged) rents for years before they buy a home, if they get the chance. This newly proposed upzoning change will threaten the dwindling inventory of available single family houses in the core neighborhoods. When today’s renters look to buy their homes, they will find that they are bidding against investors for a disappearing stock of available homes. The upzoning will work directly against them.

Bloomington’s recent Housing Study identified west side neighborhoods as “highly unaffordable” – not because the houses there are particularly expensive, but because average incomes in these neighborhoods are among the city’s lowest, meaning many households (including a majority of renters) are paying more than 30% of their incomes on their housing.

If the west side neighborhoods are upzoned, where will homeowners who can no longer afford their houses because of increased assessments and thus increased taxes – or renters who are evicted as older, cheaper rental homes are replaced by new market-rate rentals – find housing? 

How does upzoning protect those who are already disadvantaged? And how does it help them gain access to “desirable” neighborhoods where the rents will be higher and the share of potential ownership opportunities will dwindle? 

If we really want to make reparations for historical segregation, we should create a modern program of more substantial down payment assistance for those who have been traditionally shut out of the homeownership path.

Why turn single family homes into rentals when there is such a shortage of these houses for homeowners (as the city’s Housing Study clearly states)? When there are so many options to create new rental housing without subtracting from the old houses that can become beloved homes, what is the math here and who does it benefit? (It is interesting that these decisions are being proposed almost exclusively by City Council and administration representatives who are already Bloomington homeowners themselves.)

Turning even more citizens into renters has been called the New Feudalism, where ownership of property will once again be held by a small number of elite landowners, and ownership for the workers will be an increasingly scarce option.

This is not Bloomington’s only option. It’s certainly not our best choice.

Adding new rental units without subtracting single family ownership units gives you more housing options, for now and the future. There are plenty of other places in Bloomington where new, dense rental housing could be built without eliminating a precious option for future prospective homeowners.

Survey research finds that 84% of those aged 18 to 34 who are currently renting say that they intend to buy a home even if they cannot currently afford to do so (Kotkin, “The New Class Conflict“).

Let’s add new and much needed rental housing where government can actually leverage truly affordable housing without jeopardizing existing naturally occurring affordable rental housing and local homeownership, both a rare and irreplaceable local commodity.

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