How Zoning Separated America — and Why Development Is Putting It Back Together
Before 1916, no American city had a comprehensive zoning code.
That's hard to picture now. Walk through any older neighborhood in a mid-sized American city — one that predates the postwar suburban expansion — and you can still see traces of what that looked like. A two-story commercial building with apartments above. A small neighborhood church flanked by houses on both sides. A former workshop building now repurposed as condos. The grain of the street is fine, mixed, and walkable.
That wasn't accidental. It was the default condition of cities before anyone decided to regulate what went where.
The First Zoning Code
New York City adopted the first comprehensive zoning ordinance in the United States in 1916. The immediate trigger was the Equitable Building, completed in lower Manhattan the year before — a 38-story tower that cast enormous shadows over surrounding streets and properties. Neighboring landowners and businesses were furious.
The 1916 code addressed that by restricting building heights and requiring setbacks. It also separated certain industrial uses from residential neighborhoods. The logic was sound. Nobody wanted a rendering plant next to a schoolhouse.
But the idea kept expanding. Over the following decades, other cities adopted zoning codes of their own, and the definitions of "incompatible uses" grew broader and broader. By the postwar era, the prevailing model — formalized in the Standard Zoning Enabling Act and adopted by most states — required strict separation of uses. Residential zones contained only housing. Commercial zones contained only retail and office. Industrial zones were somewhere else entirely.
Euclidean zoning, as it came to be called, became the law of American land.
What We Lost
The suburbs that followed were, in many ways, remarkable achievements. Millions of families got affordable housing, outdoor space, good schools, and safety from industrial hazards. The postwar suburban expansion was a genuine improvement in living conditions for a large portion of the population.
But the strict separation of uses created problems that took decades to fully surface.
When housing and retail and offices can't coexist, people drive everywhere. The average American household today makes around 3.6 vehicle trips per day — not because we love driving, but because the built environment requires it. The corner store that supplied daily necessities, the lunch spot within walking distance, the neighborhood pharmacy — these things require mixed use to exist. Separate everything, and you make walking impractical by design.
There were economic costs too. Neighborhoods that are only residential generate no daytime economic activity. The vitality that comes from a mix — workers, residents, shoppers, all on the same street at different times of day — doesn't exist when everyone is segregated by use and transit isn't robust enough to compensate.
And there were social costs. Jane Jacobs wrote about this with extraordinary clarity in "The Death and Life of Great American Cities" (1961), arguing that mixed-use, fine-grained urban environments were what made cities safe, economically resilient, and worth living in. She was largely ignored for a generation. Then the evidence started accumulating.
The Pendulum Swings
In the 1980s, a movement emerged called New Urbanism. Architects and planners including Andrés Duany and Elizabeth Plater-Zyberk argued for a return to mixed-use, walkable, human-scale development — neighborhoods designed around people rather than cars.
Their early projects were controversial. Critics called them nostalgic, impractical. But something became apparent over time: people liked them. Property values in New Urbanist-influenced developments tended to be strong. Residents stayed longer. Streets felt safer.
Cities began to notice. Portland adopted policies encouraging mixed-use corridors. Minneapolis made major zoning reforms allowing more diverse housing types across the city. Cities from Sacramento to Richmond have moved toward eliminating single-family-only zoning. Mixed-use development — retail or commercial at grade, residential or office above — has gone from being a niche preference to a mainstream planning objective.
For developers, this represents a meaningful shift.
What It Means for Development Today
Mixed-use development is harder to execute than single-use. The financing is more complex — residential lenders and commercial lenders operate differently, and combining uses under one roof means combining their requirements. The design and construction challenges are real. Coordinating the interests of residential tenants above retail tenants below takes ongoing management.
But the market signals are increasingly clear. The neighborhoods with the strongest long-term demand are mixed-use neighborhoods. The cities making it easiest to build mixed use are seeing development interest follow. And as younger households in particular express strong preferences for walkable, amenity-rich environments, the calculus for developers who understand both the history and the trajectory becomes more straightforward.
At Atrium, we approach development with a long view. That means reading not just where the market is, but where planning and policy are going — and building accordingly. The pendulum has been swinging back toward mixed use for forty years. It hasn't stopped.
Understanding why it swung away in the first place is part of knowing how to build for what comes next.
Atrium Management Company provides multifamily and single-family property management, commercial brokerage, and real estate development services. Learn more here.
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