Invisible Businessman: Undermining Black Enterprise with Land Use Rules

Abstract

This Article is an attempt to better understand and address the feeble rate of self-employment in African-American neighborhoods. My animating thesis is that black business lags, at least in part, because commentators have overlooked a key constraint on African-American entrepreneurship: land use regulation. In both the legal academy and in the halls of government, scholars have failed to understand how land use rules restrict commercial development in minority communities. More specifically, the literature has never acknowledged that zoning - the process of dividing an entire municipality into districts and designating permitted uses for each area - sharply limits the formation and expansion of entrepreneurship in black neighborhoods. Drawing on both sociological and empirical evidence, this paper begins by providing a brief recap of the importance of entrepreneurship in black places. The Article then contends that land use fees, municipal zoning board decisions, and the general insistence on separating residential from commercial uses all impress unique and disproportionate harms on African-American merchants, making it difficult to find affordable business space in suitable locations. The final section of the manuscript lays out a policy proposal that could spark a revival of inner-city entrepreneurship. I argue, in short, that transferring government-owned abandoned buildings to fledgling entrepreneurs would provide black merchants the space they need, without raising the ire of local homeowners.

Keywords: zoning, land-use, business, vacant buildings, entrepreneurship, property

JEL Classification: K11, K20