Housing Affordability Institute’s Legal Precedents outlines influential, precedent-setting court decisions at the state and federal levels and illustrates their impact on housing and development.

Village of Euclid v. Ambler Realty Co.


Village of Euclid v. Ambler Realty Co., 272 US 365 (1926), was a 1926 decision by the Supreme Court of the United States establishing that zoning controls are an acceptable police power of governments.

In 1922, the Village Council of Euclid, Ohio-a Cincinnati suburb-established a comprehensive zoning plan. This plan outlined land use in each of the six zones established by the council, as well as places limits on lot sizes, land use and building height. Ambler Realty Company, which owned 68 acres of land in Euclid, sued the village alleging that the establishment of zoning controls reduced the land value.  


In Euclid, the Court established that municipalities have the authority to adopt and enforce a comprehensive zoning plan.  In the majority opinion written by Justice Sutherland, the Court stated:

The matter of zoning has received much attention at the hands of commissions and experts, and the results of their investigations have been set forth in comprehensive reports. These reports, which bear every evidence of painstaking consideration, concur in the view that the segregation of residential, business, and industrial buildings will make it easier to provide fire apparatus suitable for the character and intensity of the development in each section; that it will increase the safety and security of home life; greatly tend to prevent street accidents, especially to children, by reducing the traffic and resulting confusion in residential sections; decrease noise and other conditions which produce or intensify nervous disorders; preserve a more favorable environment in which to rear children, etc.”

Justice Sutherland, Village of Euclid v. Ambler Realty Co., 272 US 365 (1926)

Impact On Housing

At the time, zoning was a new concept. Following the Euclid decision, zoning became more prevalent across the United States. With the notable exception of Houston, Texas, nearly all new homes built in the United States are done under varying degrees of local zoning controls.

Guided land use purpose and the concepts of lot size, building height, width and setbacks all stemmed from Euclid. This case paved the way for fiscal impact zoning in the years following the Second World War.