As local government leaders confront tightening budgets, they may consider imposing new uniform taxes, fees, and enforcement practices to collect revenue. But these changes can increase economic hardship for low- and moderate-income residents—without substantially increasing revenues—thereby worsening their already rising economic insecurity. 

In this brief, we examine eight common local policies and practices that, while often intended to be neutral or revenue-generating, are implemented in ways that disproportionately burden low- and moderate-income residents (sometimes called “regressive” policies). For each, we offer examples and evidence-based alternatives that local leaders can implement to source new revenues while reducing harm, strengthening economic mobility, and building more resilient communities.

Why This Matters

Local policies shape residents’ ability to afford basic needs, access jobs, and maintain stable housing. Regressive policies not only exacerbate inequities but can also undermine local economic resilience and long-term growth. We provide concrete policy options that city council members, county officials, agency leaders, and community advocates can pursue today as families and governments face economic precarity.

What We Found

• Flat cost structures are common but avoidable. Uniform sales taxes on essentials, flat property tax rates, fixed utility charges, and standard fines and fees require lower-income households to devote a larger share of their income to meet basic needs. Local governments can mitigate these effects through exemptions, income-based adjustments, targeted relief programs, and fairer assessment and billing practices.
• Punitive enforcement creates downstream costs. License suspensions, court debt, utility shutoffs, and aggressive nuisance ordinances often destabilize employment, housing, and family well-being—generating higher long-term public costs while producing little in sustained revenue or compliance. Jurisdictions can eliminate these poverty penalties or adopt community-based alternatives.
• Housing and transportation policy choices shape access to opportunity. Exclusionary zoning, parking mandates, and transportation systems designed primarily around highways raise household costs and limit access to jobs, schools, and services. Evidence shows that reforms such as allowing smaller housing types, reducing parking requirements, and supporting transit-oriented development can expand access while supporting local growth goals.
• Administrative and licensing barriers limit workforce participation. Excessive occupational licensing and administrative hurdles delay or prevent entry into stable employment, particularly for low-income residents and those involved in the civil and criminal justice system. Local governments can remove or scale back requirements that do not advance public health or safety, expanding access to work and consumer services.

Taken together, these findings demonstrate that regressivity is a product of policy design—one that local governments have significant authority to change.

How We Did It

We synthesize existing research and policy evaluations from the Urban Institute and other evidence-based sources to identify local policies with demonstrable disparate impacts on low-income households. Real-world examples illustrate how some jurisdictions have already redesigned their policies to reduce harm, promote upward mobility, and improve equity without compromising core policy goals.