Zoning is the means by which urban planners determine which kinds of construction are allowed in a given area of the city. In the context of a city-builder game, a zone is a region which can be painted on the map where growable buildings of a type compatible with the given zone will appear when there's sufficient demand.
Zoning in city-builder games (even European games) is very heavily influenced by the zoning systems used in most of 20th century North America, and it is difficult if not impossible to disentangle the history of zoning in 20th century North America with the history of race in 20th century North America. The Supreme Court ruled explicit segregation in zoning violated the Fourteenth Amendment in 1917, but of course this was the nadir of American race relations, and cities simply learned how to achieve the same effects without actually using the magic words. Even after the Fair Housing Act was passed in 1968, zoning continues to be used to keep wealthy (and mostly white) neighborhoods wealthy (and mostly white), by - for example - mandating single-family homes on large lots to keep housing costs high and the "rabble" away. Every portion of this article should be read through that lens.
Types of zoning
Use-based zoning is any kind of zoning plan in which the primary factor in whether a building is permitted in a particular area is what it's used for. Typically, the three most important types of land use from an urban planning perspective are residential (land used for people to live on), commercial (land used for trade in goods and services), and industrial (land used to produce new goods). (Office areas are conceptually commercial but, from a gameplay perspective, function at least partly like industrial, since their primary purpose is to provide employment.) Use-based zoning presupposes that the primary reason for zoning is to keep these three areas at least somewhat segregated.
In the US (and in city-builders), a given zone is generally understood to be exclusive, allowing only buildings of a given type. This is not universal; in Germany and France, for example, areas are zoned for their predominant use, not their exclusive use. A "residential" zone in such a system would allow some proportion of commercial buildings.
Euclidean zoning, also called single-use zoning, is a type of use-based zoning that overwhelmingly dominated North American urban planning for most of the 20th century. It is named after the 1926 Euclid v. Amber Supreme Court case, which established that municipal governments had the right to limit land uses within their borders.
Under this system, a piece of land may be used for exactly one purpose, and these areas are strictly segregated. These purposes are usually more specific and more limiting than just "residential/commercial/industrial" - Jacksonville has nineteen different kinds of residential zone alone, differentiated by allowable density, minimum lot size, whether rowhouses or Accessory Dwelling Units are permitted, etc.
Euclidean zoning causes "a surprisingly broad range of problems," as one author put it. Most notably, it goes hand in hand with car-centric design by its nature. In a Euclidean-zoned city, homes, workplaces, and shopping centers aren't allowed to be within walking distance of each other. Sprawl is more or less an inherent feature of this model, which causes environmental degradation and increased infrastructure costs per unit of economic activity. Euclidean zoning makes it impossible to revitalize decaying urban centers as the economics of cities change over time. And it promotes - and was partially invented to promote - racial and economic segregation. Making zones smaller and mixing them more closely helps with these issues, but doesn't prevent them. Although people have been raising these issues since Jane Jacobs wrote The Death and Life of Great American Cities in 1961, the movement away from Euclidean zoning has been slow to the point of unnoticeable in most of the United States.
Mixed-use zoning is a form of use-based zoning, but unlike Euclidean zoning it does not presuppose a total segregation of the three primary land uses. This was the default concept of the city until the early 20th century, and remained the default in Europe even as North America embraced the Euclidean model. Most modern planners, even in the US, are returning to mixed-use development. Mixed-use development does not require mixed-use zoning - any zoning system other than Euclidean zoning allows for mixed-use - but mixed-use zoning explicitly sets aside some areas of the city for mixed-use, while other systems merely fail to prevent it.
In its most common form, mixed-use construction allows residential and commercial properties to be built in the same area. This can take many forms; in low-density areas, it may mean that neighborhood-scale commercial buildings are interspersed into residential areas, in medium-density areas it may allow for homeowners to operate commercial businesses on the first floor of their homes, and in high-density areas it may mean multi-story residential units with commercial uses on the ground floor, or towers that mix residential, office, and hotel uses. (Interestingly, while no SimCity game has allowed for mixed-use development, SimTower was all about building a mixed-use tower of the latter type.) Mixed residential-industrial or commercial-industrial is much less common, due to the noise and pollution inherent to serious industrial activity, but there are some areas where residential buildings (especially when they've been converted from abandoned industrial buildings) are permitted to operate light industrial studios and workshops.
Mixed-use, by its nature, reduces traffic at the source; it makes it possible for people to live, work, and shop in the same neighborhood, or even in the same building. It makes cities more compact and walkable, and it increases economic activity per unit area. It is an important tool for urban downtowns in particular, which find it almost impossible to thrive under Euclidean zoning. It doesn't prevent car-centric design, but it is the only form of use-based zoning that doesn't effectively require it.
Form-based zoning is zoning based not on what a building is used for but on how it looks. The earliest modern citywide zoning code, New York's 1916 Zoning Resolution, was primarily about the shapes of buildings rather than their functions - it was intended to ensure that the skyscrapers which were becoming so popular among New York architects didn't blot out all light from the street. This is why so many iconic skyscrapers in New York, like the Empire State, get narrower as they rise. Form-based and use-based zoning aren't mutually exclusive, and in fact virtually every use-based zoning plan also incorporates some simple form-based features: you're never going to be able to build a 50 story building in an area zoned for light residential even if you're going to be the only person living there. The form-based features typically seen in a conventional use-based zoning plan include limitations on height, setbacks from the street, floor-to-area ratio, and parking minimums.
However, there is an increasing movement to create strict form-based plans without use-based limitations. In other words, they presuppose not that people in a residential area don't want to live next door to commercial businesses, but that they don't want to live next door to a big box store. These stricter form-based plans focus on defining the architectural character of a neighborhood without micromanaging land use to create welcoming and walkable neighborhoods which are mixed-use by default, without losing a neighborhood's unique character. This approach, like explicitly zoned mixed-use development, reduces traffic and sprawl at the source. Form-based plans are designed to integrate the private zoned space with the public space, like the transportation network, so that the municipality can shape both together and harmonize them.
Other zoning models
Performance zoning doesn't limit either the uses of a property or its form, but rather sets out a series of basic expectations for how a building acts. By requiring very specific metrics be met, performance zoning aims to offer developers freedom while ensuring that the needs of existing residents are met. This creates a very flexible planning model, but that same flexibility makes it unpredictable and hard to enforce, and this model has mostly fallen from favor since its heyday in the 90s.
Incentive zoning is a way for municipalities to encourage certain kinds of use or form without explicitly mandating them. For example, a city's zoning code may limit residential buildings in a certain zone to 20 stories, but allow buildings to be 25 stories if they contain some percentage of affordable housing. Unlike spot zoning, which is an exception made to the zoning code on a case-by-case basis (and which obviously opens up massive avenues for corruption), incentive zoning is built into the zoning code beforehand.
Floating zones are a special kind of zone where the performance, form, and use conditions have been put forward, but the zone itself isn't drawn into the city's zoning map until a developer application is approved.
Overlay zones are secondary zones applied on top of existing zones that limit certain kinds of development in those areas. For example, a residential zone may have a "historic district" overlay zone applied on top of it, which prevents development that's not in keeping with the historic character.
Alternatives to zoning
Segregation of land use has existed as long as cities have; pretty much as soon as people started doing noxious and unpleasant things like tanning leather, someone in power said "don't you dare do that next to my house." However, centralized municipal zoning is only a hundred years old and isn't universal. In the United Kingdom, zoning is not used. Instead, every new development, and any change in use of an existing property, must be specifically approved by the local planning commission.
Perhaps the most fascinating example is Houston, which is far and away the largest city in the US to not have any zoning ordinance. Despite this, Houston is nonetheless quite typical of North American cities (especially Sun Belt cities) who did most of their growing in the 20th century. Virtually all of those cities, whether they had tight Euclidean zoning plans or, like Houston, no zoning at all, exhibit the same kind of car-centric sprawl and racial and economic segregation. Houston's high parking minimums and large minimum residential lot sizes have historically discouraged dense, mixed-use, or mixed-income development even without any legal barriers, and the city has an abysmal Walk Score of 48. This underscores the fact that merely avoiding Euclidean zoning doesn't automatically lead to good development. (Still, it is worth noting that Houston's Walk Score is actually the best of any Texan city over 100,000 people - perhaps because of the handful of mostly wealthy inner ring neighborhoods with a good mix of residential and commercial property, many of which have scores in the mid-80s.)
In other city-builders
In the original SimCity, the player could place three kinds of zone in 3x3 squares: residential, commercial, and industrial. SimCity 2000 added the ability to paint zones more precisely and differentiated low-density and high-density residential zones. The most recent contemporary city-builder, Cities: Skylines, could (with the DLC released as of early 2020) be argued to have as many as 19 different zones, thanks to its districting mechanic:
- low density residential
- high density residential
- low density self-sufficient residential
- high density self-sufficient residential
- low density commercial
- high density commercial
- low density leisure
- high density leisure
- low density tourist services
- high density tourist services
- low density organic and local produce
- high density organic and local produce
- oil extraction
- ore extraction
- IT office
(District-based policies like "Old Town" might also be considered overlay zones, and district-based tax breaks might be considered incentive zoning, thus making the total possible number of zones an uncountably large number. District policies do not affect the look of the buildings, only how they behave.)
In every case, though, zoning is use-based and specifically Euclidean; to my knowledge, there are no city-builder games that permit mixed-use development.
In Charm Cities
Charm Cities will give players the option to use a collection of standard zones, but will also add in a more powerful zone customization tool, which will allow users to develop their own unique zoning system and reuse them later. With the customization tool, players will be able to create anything from a rigidly defined zone where only very specific types of growables may appear to a totally unregulated zone where any growable at all can be built. These custom zones may be defined by use, by form, or by any combination of the two. Mixed use zoning will also be not just possible but encouraged, with a mixed residential-commercial zone included as one of the standards and more elaborate mixed zones able to be created with the zone customization tool.