You would think that if conservatives could agree about anything it would be zoning reform. Making it easier to build new housing would increase freedom (something libertarians like), increase economic growth (something businesspeople like), and help lower class Americans afford homes (something all conservatives like.)
Recently, however, a split has developed in the conservative ranks, as exemplified by a recent National Review article by Stanley Kurtz. Here he criticizes the idea of having the federal government pressure cities to make it easier to build housing:
They will lose control of their own zoning and development, they will be pressured into a kind of de facto regional-revenue redistribution, and they will even be forced to start building high-density low-income housing. The latter, of course, will require the elimination of single-family zoning. With that, the basic character of the suburbs will disappear. At the very moment when the pandemic has made people rethink the advantages of dense urban living, the choice of an alternative will be taken away.
Before getting into zoning, let me acknowledge that the specific complaint here has some merit. It’s not obvious that the federal government has any business telling local governments to reform zoning. (Is this more like schooling, where local control is best, or more like free speech and interstate commerce, where you want the federal government to guarantee certain freedoms? I don’t know.)
But Kurtz doesn’t stop with defensible complaints about the merits of federalism; he also disagrees with the claim that zoning reforms to boost density would be welfare improving. And that argument is very hard to make.
Residents often complain about new apartment complexes because it increases traffic and brings in lower income residents. But these arguments are very weak. In aggregate, greater density reduces traffic. People must drive farther in less dense suburbs. And lower income people need a place to live. Surely its better to allow them to live closer to job opportunities than to force them into slums, or even homelessness.
Nor would these proposals “destroy” the suburbs. Even the NYC metro area—which is a sort of poster child for dystopian density in the minds of many zoning fans—the vast majority of the region is devoted to low density suburbs, including much of Long Island, northern New Jersey, Westchester County and southwest Connecticut. When people hear the term ‘New York’ they think of Manhattan, but there are plenty of nice suburban communities for people who prefer that sort of living.
You might argue that removing zoning would turn American suburbs into New York City-style dystopias, but there are far to few people in America to densify more than a tiny, tiny fraction of suburbia.
And some densification is optimal. Suppose Midtown and the Upper East and West Sides of Manhattan had not been allowed to densify, because residents who liked the formerly quiet neighborhoods had used NIMBY lawsuits to hold up development. Think about how much less impressive New York City would be today.
The goal should not be to have all dense cities, or all sprawling suburbs, but a mix of the two. Zoning reform helps to allow America to develop organically, according to the wishes of the public. Each family will move to the sort of area that they prefer.
Conservatives often oppose progressive policies that are intended to help the poor. In many cases, conservatives are correct to oppose those initiatives, as government involvement in the economy often does more harm than good. But if conservatives were then to turn around and support government regulations that made it hard to build affordable apartments, even though those regulations reduced freedom and reduced economic growth, all because growth might inconvenience some affluent people who like things to always stay the same, then there are going to have to accept the fact that their motives will be questioned. (I say “some affluent people”, because I favor more density in Orange County.)
Isn’t the conservative view that higher minimum wages reduce freedom and economic growth? OK, but doesn’t zoning also reduce freedom and growth? Or is something else motivating conservative opposition to higher minimum wages?
I know why I oppose higher minimum wages, but I’m no longer confident I know why other conservatives do.
Of course many on the left oppose new low-density suburban developments. I also disagree with that view. So I’m not taking sides on the overall housing density debate, just the specific idea of relaxing zoning rules to allow greater density.
Some progressives have a vision for how people should live—densify. Some conservatives have a very different vision for how people should live—suburban sprawl. My vision is freedom.
PS. The American Conservative has an article by Charles Marohn that points to numerous federal regulations that have subsidized suburban sprawl. Stanley Kurtz mostly ignores those market distortions when he advocates a hands off approach by the federal government.
READER COMMENTS
Steve
Jul 20 2020 at 6:34pm
How do you conceptually think about existing landowners being harmed by a sudden change in zoning laws? If I bought a house in the suburbs, and then the zoning changes and they put up a high-rise apartment building across the street and drive my property value down, am I owed any compensation? Or do I just have to suck it up, sell my house for a loss, and leave? I bought my house understanding the existing rules and zoning regulations. Am I not owed anything in perpetuity if they suddenly change?
As a specific example in a different area, Colorado recently allowed all grocery stores to carry full strength wine and beer. Existing liquor stores paid for liquor licenses based on the laws at the time. I feel like – although reducing barriers to entry is a good thing – those business owners were kind of cheated out of some money via the fees they paid for a liquor license that is no longer worth as much revenue.
Does the same thing exist for homeowners re: zoning laws?
Alexander
Jul 20 2020 at 6:42pm
Good point. I would say how does this differ from most things? New tax laws can make previously lucrative investments no longer so or vice versa. Would you buy a muncipal bond if your tax rate was cut 40%?i everyone to be beholdent to people who made decisions long ago dispite these laws harming overall economic growth? I don’t see why the world should stop improving because some people sell carragies.
Lizard Man
Jul 20 2020 at 9:48pm
Property developers are only going to tear down existing buildings to put up something denser where they can make a profit. Buying lots that already have structures and that are contiguous is itself something that is quite expensive and time consuming. Then tearing down those buildings adds more cost to the project. And building taller and bigger generally costs more than building smaller structures. So developers are only going to build large, dense structures in areas with very high demand for housing, office, and retail space. So if a developer is a building a mixed use development next to your house, that is because your land is in really high demand and redevelopment of that land is profitable.
An upzoning of land that is in really high demand and upon which redevelopment is profitable is going to increase the value of that land. So while a new development may lead to a decrease in a homeowners utility, so long as their land is also upzoned it will very likely make them wealthier.
Garrett
Jul 20 2020 at 7:39pm
Another example is taxi medallions before/after Uber. Are the medallion owners owed compensation from Uber or the government?
Scott Sumner
Jul 21 2020 at 2:45pm
Absolutely not.
Thomas Hutcheson
Jul 22 2020 at 9:29am
They are not “owed” it, but if that were the way to get Uber services, pay them off and get on with it. Vilfredo Pareto would approve.
Aaron
Jul 20 2020 at 7:39pm
First of all, a sudden change in zoning does not equate to a sudden change in your neighborhood. Very few single family neighborhoods would see highrises suddenly sprout up if zoning allowed it. What’s much more likely is that some single family neighborhoods would see a slow increase in density – more single family homes on smaller lots, perhaps in a rowhouse/townhouse type configuration, or small 2-4 unit apartment buildings.
Besides, nobody is really advocating for extreme zoning changes like that except at the fringe. Realistic rezoning proposals look like what Minneapolis did – allow all residential lots to have up to four apartments (but no extra building size!).
To answer your question about compensation – I don’t see anyone as deserving compensation if one’s neighbor is permitted to do something that always should have been permitted, particularly if you’re also granted the same privileges at the same time.
robc
Jul 21 2020 at 8:03am
strongtowns.org is one of the other sites I regularly read. I first heard the founder interviewed by Russ Roberts on econtalk.
There is a lot there I disagree with, but one of the things I do agree with is the need to allow the next incremental development of land. When you do this you don’t get completely out of whack land/building ratios like in SF.
The numbers I remember, which are rough rule of thumb, is the new construction is generally done at building:land ratio of 9:1. When the ratio has decreased to 2:1 or 3:1 (due to land value increasing and building value declining) an area is ripe for gentrification, buying and building to the next increment up is profitable. Build it back to 9:1.
SF averages something like 1:3. Too many single family homes in areas that should be mid-rise condos. They can’t do the next increment up, because they have skipped over 3 generations of building. If you don’t allow incremental change, you get to a situation where you need massive change all at once.
Thomas Sewell
Jul 20 2020 at 11:19pm
It would take a very unusual circumstance (maybe zoning changing for your neighbor, but not for you somehow?) to make it so that you lost money in the situation you describe.
That’s because the skyscraper (or whatever higher density project) only gets built if it’s a more valuable use of the property than keeping it a single-family home.
And if that’s true of the neighboring property, it’s almost certainly true of your property as well. As a result, you can sell at more of a profit because of the zoning change, not at a loss.
A K
Jul 21 2020 at 7:37am
In my opinion, I don’t think anyone is owed any compensation. In the stock market, if a competing company releases a better product and the stocks you hold fall, you don’t get the opportunity to sue the competitor because they depressed the value of your stocks. An investment in a home, taxi medallion, or liquor license is similar – it’s a bet that you will be able to make money on the object over time. There is no guarantee that home value, taxi medallion prices, or liquor license costs will go up, so the prospective buyer must decide whether they need that property and whether it will become obsolete.
robc
Jul 21 2020 at 7:57am
You are owed nothing. You took your chances. When buying a property, you have to factor in the risk of the neighboring properties changing in character.
Dylan
Jul 21 2020 at 1:18pm
Aren’t zoning regulations and HOAs a response to owners wanting to insure against those risks? If I’m buying a home that I’m intending to stay in for a long period of time, I’d like some assurance that what I’m buying isn’t going to radically change during that time.
Steve
Jul 21 2020 at 2:52pm
I don’t have time to reply to everybody but thanks for all the discussion around this. I’ll go ruminate on it some more.
Maybe it was Thomas Sowell who made this argument (maybe not) but I recall that I did agree with him that if you bought a property with a view of the coast, you are not entitled to that view if someone closer to the coast decides to build higher than you. You should have bought all the property between you and the beach if that was your aim. Maybe throwing in existing zoning regulations just muddies the waters of what should be a very obvious answer to that analogy.
Scott Sumner
Jul 21 2020 at 2:47pm
You asked:
“Am I not owed anything in perpetuity if they suddenly change?”
No, all policy changes create winners and losers. If we start compensating people for policy changes then the damage to society of bad policies will be even greater.
nobody.really
Jul 20 2020 at 6:50pm
Surely zoning also permits each family to move to the sort of area that they prefer. It would also give them greater confidence that the area they prefer will REMAIN the area they prefer–and cannot be altered because the neighbor sold his property to a nuclear waste repository.
2. Libertarians love property rights, and properly so, because it helps reduce people’s uncertainty. But the English Common Law of property rights evolved along with the tort of nuisance–a tort whereby one landowner defends his right to “peaceable enjoyment” by limiting what may happen in another landowner’s land. And over time, the definition of “nuisance” changes as local land use changes. Archetypally, whether the rancher has a duty to fence in his cattle, or whether the farmer has a duty to fence out the cattle, heavily depends upon whether the majority of voters in a region are farmers or ranchers. And over time, that changes. Thus, to ACTUALLY reduce uncertainty, zoning provides more protection to all parties concerned than nuisance litigation.
I don’t mean to defend any specific zoning laws. But I am not persuaded that zoning laws IN GENERAL are such a bad thing–at least when compared with endless NIMBY litigation.
Scott Sumner
Jul 21 2020 at 2:52pm
There’s no doubt that some special interest groups benefit from zoning, just as they benefit from protectionism, minimum wage laws, and other forms of government intervention. But these regulations reduce overall wellbeing of society.
It’s a good example of the seen and the unseen. It’s easy to see a homeowner who benefits from things staying as they were, harder to see those priced out of housing.
nobody.really
Jul 21 2020 at 5:32pm
I fear I have been unclear. I’m trying to emphasize the advantage of CLEAR property law over unclear law–even when that clarity provides clear restrictions.
I invite you to visit Palm Springs, CA. The town is chopped into a checkerboard of property rights. One block will be governed by California property laws, while the next block will be governed by the property laws of the Agua Caliente Band of Cahuilla Indians. California law is more developed than this tribal law. Now, perhaps you would rejoice at the opportunity to invest vast capital in a project without so many pesky property law precedents. But this has not been the perspective of the property developers in town.
In short, it is unclear to me that zoning laws are cheaper than constant, and often unpredictable, nuisance litigation. You may want to build high-density highrises–but what will you do when a court rules, halfway into the project, that you’re wrongfully intruding upon the view, or the access to sunlight, or the tranquility, of neighboring landowners? And given these risks, what kind of return will your investors demand? And given these costs, how much will you need to charge buyers/renters of your development? It is unclear to me whether this strategy would actually produce cheaper housing. Perhaps the cheaper strategy would be to retain zoning laws, but to invest in changing the laws to explicitly permit the development of high-density highrises.
Lorenzo from Oz
Jul 23 2020 at 10:51pm
Houston is a good example of a city that seems to work fine with no zoning laws.
nobody.really
Jul 24 2020 at 3:44pm
Houston is a fascinating example of libertarian-ish land management. Large neighborhoods are built in flood plains–that is, in the areas that other cities would leave vacant so as to have a place to impound occasional storm waters. Climate change suggests that these areas will see ever more flooding–yet the city continues to permit more houses there.
The day may come when people living in low-lying areas sue people living in high-land areas for failing to impound their fair share of stormwater, and instead dumping it upon their neighbors as an externality. Then we will see how much we like libertarian-ish land management.
john hare
Jul 20 2020 at 8:19pm
I’m going to repeat something I have mentioned before. If it were legal to build and operate minimal housing effectively, homelessness could be almost eliminated in a very few years. There are several ways to build residential units so small, simple, and cheap that it would be possible to rent them to the homeless for $10.00 or so per night. No way you are going to get actual permitting for this. Nor would you be allowed to operate them in a manner appropriate to the clientele.
No government money, just risk taken by entrepreneurs. Impact fees might be the showstopper, right now they are about $10.5K per house in my rural/small town county.
TMC
Jul 20 2020 at 10:00pm
Zoning laws are voted on all the time. Having the government step in because someone doesn’t like the result of the vote is not libertarian.
Lizard Man
Jul 21 2020 at 11:09am
Upzoning properties to allow for the next increment of development, as advocated by Charles Maron, is conservative (in a Burkean sense).
But really it just seems like people arguing about which level of government gets to make the rules about zoning. It doesn’t seem clear to me that doing that at the municipal, county, or state level is more or less libertarian.
TMC
Jul 22 2020 at 12:42pm
I’d say, the more local, the more libertarian. In this case, those who live in the area effected are voting, rather than a full state where possibly only 1% of those voting live there. The other 99% imposing their will on the 1% when they don’t have to bear the cost of the change is not libertarian.
robc
Jul 23 2020 at 8:52am
But the MOST libertarian solution would be to go to an even smaller level. Zoning decisions at the lot based level would be the most libertarian solution. In other words, let the owner of the lot decide without his neighbors butting in at all.
Mark Z
Jul 20 2020 at 10:42pm
This isn’t an entirely new ‘schism;’ Joel Kotkin has been writing against housing deregulation for a long time, and gets published in the otherwise usually pro-deregulation City Journal.
I want to say it was maybe Kevin Erdmann who pointed out that if more major cities allowed for their own versions of Manhattan to be built, this would free up land for and make it more affordable to live in surrounding suburbs. When one place densifies, another de-densifies by definition. Maybe the reason for supporting zoning is similar to why some people oppose gentrification: the failure to grasp that preventing a group of people from moving into a particular neighborhood necessarily induces them to move somewhere else, or stay put, thereby causing the exact same ‘problem,’ just somewhere else. Or less charitably it could be “I want to preserve the character of my neighborhood, and I don’t care what that does to everyone else.”
Scott Sumner
Jul 21 2020 at 2:53pm
Good points.
Michael Sandifer
Jul 20 2020 at 11:47pm
I don’t know where the impression ever came from that conservatives favored freedom from zoning, if anyone had it. My impression was always that conservatives favored certain zoning rules that offered selfish benefits, with some overlap with non-conservatives and other motives involving various forms of bigotry I don’t think conservatives were ever pro-freedom or pro-business, but pro-freedom for neighborhoods and employers to discriminate against undesirable minorities. Perhaps it’s the few actual classical liberals who used to be part of the Republican coalition who used to provide cover in the minds of some for majority of bigots on the right
I’ve always found the left to be hypocritical on zoning, through some combination of pure ignorance, obvious economic selfishness, and unacknowledged bigotry. Over time, those drivenidriven primarily bysby bigotry have been sorted away from the left-wing.
My impression is that the best way to deal with this at the federal level is probably through taxation.
Mark Z
Jul 21 2020 at 3:34am
Not every errant policy position is motivated by pure evil bigotry, though I suppose knowing this this takes most of the fun out of politics. I’m curious though, what do you make of the fact that the states and cities with the most deregulated housing policies tend to be more conservative?
Lizard Man
Jul 21 2020 at 11:17am
Would you be confident that Republican dominated municipalities have more permissive rules regarding residential construction 30 years from now? Minneapolis, right before the riots, upzoned the entire city to allow for more housing everywhere. It seems to me unlikely that the suburbs are going to follow suit.
That said, the actual situation seems to me to be that both Republicans and Democrats are generally opposed to changing zoning rules to make it easier to build more housing. Both are really just opposed to change in the built form of cities and neighborhoods. However, my suspicion is that Democrats will gradually move towards zoning reform in a way that Republicans won’t, as evidenced by Minneapolis and repeated attempts by California legislators to change zoning rules in the state.
Mark Z
Jul 21 2020 at 10:38pm
Historically, I think more conservative cities have tended to have less stringent zoning. Compare cities in Texas – especially Houston – or Boise or Indianapolis with cities in California or the Northeast. Most of these cities are still mostly Democratic, but their Democrats are comparatively conservative and the voter base is less homogeneously progressive.
Speaking prospectively and in terms of party affiliation, there are already basically no major cities run by Republicans, let alone in 30 years, so I’m not sure that comparison will even be possible. I do expect that in 30 years, cities like Boise or other fast-growing cities in the south and southwest, comparatively conservative cities, will have less stringent zoning than more progressive cities in the northeast and west coast. I’d also bet that housing in cities like Houston will probably become more regulated as they become more progressive. Maybe eventually when housing gets so bad in a city that it has to be dealt with, cities finally deal with it, but it’s a big maybe. Housing in NYC is worse than almost anywhere else in the country, and anti-gentrification sentiment seems stronger than ever, as evidenced by ongoing efforts by activists to stop new developments in northern Manhattan.
Neil S
Jul 21 2020 at 1:45am
You state “It’s not obvious that the federal government has any business telling local governments to reform zoning. “, which I consider to be a rather egregious understatement.
From my perspective “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” clearly covers this case. To argue in your PS that past abuses by the federal government justify new abuses to somehow balance the scales is to put much more faith in the intentions and abilities of the government than I think is justified.
I have no problem with zoning reform, however I think (ab)using the power of the federal government to push specific policies in a paternalistic fashion is not likely to create anything you or I would recognize as zoning reform. We will merely see additional layers of complexity and regulation.
Regards,
Neil S
Michael Pettengill
Jul 21 2020 at 4:17am
Alan Goldhammer
Jul 21 2020 at 7:11am
The theory that Scott notes is great but in our area it does not translate to practice. Zoning in downtown Bethesda, MD has changed markedly over the years permitting more high rise building. Most of this is apartment or condos. Very little of it is affordable. My wife and I joke that we will likely be six feet under before the last building crane disappears from this area. Even if we sold our moderate home that is located about 1.5 miles from the building epicenter, the profit would not be enough to purchase a 2 bedroom and den condo.
I am pro development but I wonder if people with moderate incomes are being squeezed out of housing. Of course, it is always possible to move further out from downtown areas but then one need to be concerned with transportation options to get downtown. there are no easy answers.
robc
Jul 21 2020 at 9:23am
If you had a zoning free-for-all, you would have more development until it became affordable. The thing is, if one area, like Bethesda, did it, that wouldn’t be enough, you would really need the change to happen across the entire DC metro area, MD, VA, and DC.
Would need to get rid of that silly restriction of nothing being taller than the Capitol building (and looking it up, the even sillier 1910 restriction).
Scott Sumner
Jul 21 2020 at 5:53pm
You said:
“Very little of it is affordable.”
All new housing is affordable to someone. If it were not, the price would be cut until someone buys it.
New housing should generally not be affordable to the average person (in an advancing society), just as a new car should not be affordable to the average person. Rather, new construction should make older houses more affordable.
https://www.econlib.org/archives/2018/01/we_should_focus.html
Thomas Hutcheson
Jul 21 2020 at 7:28am
Densification is productive in the aggregate,but disadvantageous at the most local level. We have no mechanism to politically to use part of the aggregated benefit to buy off the local opposition.
Thomas Hutcheson
Jul 21 2020 at 7:44am
My reading is that few “conservatives” are neo liberals as we are. They would not support substituting a wage subsidy for minimum wages or replacing the wage tax that finances SS/Medicare with a VAT, or replacing business taxes with progressive taxes on personal consumption, or a revenue neutral tax on net emissions of CO2, because these would shift, or would run the risk of shifting income away from high-income people with whom they identify. The gain in economic efficiency would be dispersed among many but the pain would be concentrated.
The data that this reading does not explain is support for trade and immigration restrictions.
robc
Jul 21 2020 at 7:55am
Zoning is a violation of the 5th amendment, so it is more like free speech.
Scott Sumner
Jul 21 2020 at 5:54pm
That’s a defensible argument.
robc
Jul 22 2020 at 8:45am
I doubt we could get 5 justices to agree. If a zoning is a takings case came before SCOTUS, I would bet on 7-2 against at best.
robc
Jul 22 2020 at 9:10am
I think Marohn is probably tired of me nitpicking articles on his site, but I will point something wrong here since I see the mistake made elsewhere: The mortgage-interest deduction wasn’t “piled on”. Interest deduction has existed since the first income tax form in 1913 or whatever year it was. There weren’t many deductions on that first form, interest was one of them, as was losses due to shipwreck.
Instead, what changed was that the deduction for all other forms of interest was taken away. If we stuck with the original form, credit card interest would be deductible, auto loan interest would be deducible, as would the extra $1 you threw in with the $10 you borrowed from your uncle.
They were deductions because the interest was taxable income by the recipient.
Lots of people think as part of tax simplification we should get rid of the mortgage interest deduction. I think we should simplify by going the other way and bringing back the interest deduction.
Miguel Madeira
Jul 22 2020 at 12:26pm
“Isn’t the conservative view that higher minimum wages reduce freedom and economic growth? OK, but doesn’t zoning also reduce freedom and growth? Or is something else motivating conservative opposition to higher minimum wages?”
If we go for a “Robert Nisbet-ian” version of conservatism (defense of the autonomy of small groups against both individualism and centralization, and considering the the defense of supposed individual rights is one of the favorite tools of the central government to invade the space of small groups), makes perfectly sense to be against minimum wages and in favor of zoning (or at least in favour of local decision in zoning issues) – minimum wages is the government invading the autonomy of companies to protect the rights of some individuals; and restriction in zoning is also the central government (or at least a level of government more “central” than the neighorhood) restricting local autonomy in the name of individual rights.
robc
Jul 22 2020 at 4:03pm
But where is zoning actually done at the neighborhood level? It is usually at the city/county level.
I am a libertarian, and not an anarchist, but I am more and more thinking that government action should be at the Dunbar’s number size or less.
If zoning was decided at the level of 150 or so people, say 50-100 households max, that would be slightly less bad than the way zoning is done today.
For places like NYC, that would reduce zoning decisions to single lot size, in many cases.
nobody.really
Jul 23 2020 at 12:12pm
WHAT A FASCINATING PROPOSAL. It offers a way to put a little theoretical structure under vague ideas of subsidiarity/federalism–to find a toe-hold on a slippery slope.
I think this is the first time I’ve encountered this variation on libertarianism. To whom may I attribute it? Did Robert Nisbet invent this? Did you? (I’m happy to give credit to “robc,” if no one cares to name a different originator.)
robc
Jul 23 2020 at 8:05pm
It is me, as far as I know.
Andrew T Gardner
Aug 9 2020 at 6:13pm
Zoning (especially in wealthy suburbs) cannot be separated from the fact that public school expenditures are funded by local property taxes. Hence good school districts and high housing values are closely associated. Eliminating or reducing this linkage would make relaxed much less unpopular and likely improve educational outcomes for many students. Social security is recognized as a national concern — why is primary and secondary education considered a local concern?
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