For most of American history, cities grew along a familiar pattern. Once a suburban community grew large enough, the neighboring big city would loosen its borders and swallow it up through annexation. Then in the 1950s, the developers of Lakewood, California—sometimes described as the “Levittown of the West Coast”—invented a new “municipal technology” to avoid this fate.
By contracting out vital municipal services like police, fire and sanitation to the county or private entities, the 17,500-home subdivision just outside of Long Beach was able to incorporate as a city at a significantly lower population than it otherwise would have needed. Copycat contract cities became hugely popular in the ensuing decades, forming concentric circles around old urban centers and providing suburban homeowners with the solace that, safely within their incorporated entities, they would be protected from what might euphemistically be called big-city ills.
Contract cities aren’t the first thing that come to mind for most people when they think of the affordable housing crisis that many American cities now face—these suburban communities tend not to have many homeless people or renters at risk of eviction. But in desirable regions like coastal California, contract cities have played a huge role in exacerbating housing problems outside their borders. For over half a century, they’ve been all too successful at implementing their founding mandates: preserving their physical and demographic character, and delivering consistently rising home values to homeowners.
“One of the main reasons it worked was that these cities effectively opted out of paying for expensive social services by zoning out poorer people,” New York Times economics reporter Conor Dougherty writes in Golden Gates: Fighting for Housing in America .