Matt Yglesias has a post that discusses the history of zoning laws. He cites a study by Christopher Silver that shows how zoning was introduced as a way of preventing minorities from moving into white areas. Then he has this to say:
The reason I’ve found myself recommending Silver’s piece is that the people I am trying to convince are generally ideologically motivated college-educated professionals. They instinctively dislike libertarian arguments and would hesitate to identify themselves as “pro-business.” They conceive of urban land use politics as pitting activists or regulators against developers and are disinclined to side with the developers.
The “Racial Origins” story is, I think, a good way to try to create a permission structure for progressives to embrace a deregulatory cause. But the lever here is not mass opinion, but the internecine fights of the progressive nonprofit world.
Free market policies are generally in the best interest of society. Unfortunately, terms like ‘neoliberalism‘ now have such a bad connotation that the policies need to be disguised in some way in order to make them palatable to the left. As soon as someone points to the racial justice aspect of zoning reform, however, the right turns against the idea:
One problem here is that elite politics exist on both sides. . . .
Certainly on the housing front, the problem with Sameerah (one of the aforementioned YIMBY state legislators) framing his deregulatory proposal in racial justice terms is it got him denounced by a Daily Caller writer. Similarly, when Biden included an effort to reduce housing regulation in his American Jobs Plan, he got denounced by Stanley Kurtz in National Review. In both cases, you have right-of-center housing specialists saying that the Democratic proposal is directionally correct. Ed Glaeser, a Republican economist, critiqued Biden’s housing proposal on the sensible grounds that it’s not as strong as it should be.
The problem is that the very same racial angles that help zoning reformers win intra-progressive arguments have the opposite impact on the right. I wish congressional Republicans would listen to Glaeser or my friends at the Mercatus Institute. But Tucker Carlson has come out swinging against zoning reform.
During the 2020 campaign, Trump warned that zoning reform (once a Republican idea) would lead to undesirable people moving into nice suburban neighborhoods.
This is where we end up when both sides of the political spectrum adopt identity politics. In this case I agree with the left. But I fear that presenting the zoning issue as one of racial justice will make it politically toxic.
I wish I had a solution. Martin Luther King’s vision of a colorblind society seems to be ever further in the distance.
READER COMMENTS
Thomas Lee Hutcheson
Apr 24 2021 at 7:36am
It happened earlier with the GOP turning against other growth-promoting policies like taxing net CO2 emissions, low structural deficits, freer trade and immigration, when it became useful useful for their identify politics.
Andrew_FL
Apr 24 2021 at 12:56pm
Taxes do not promote growth
Mark Barbieri
Apr 24 2021 at 5:14pm
They don’t, but if the choice is between a carbon tax vs a myriad of different regulations, targeted taxes, and subsidies designed ostensibly to reduce carbon emissions, the simple carbon tax may be the more pro-growth choice.
Floccina
Apr 30 2021 at 2:26pm
We have an extremely inefficient hidden CO2 tax already, replacing it with an explicit CO2 tax would be an improvement.
Thomas Lee Hutcheson
Apr 25 2021 at 6:59am
It the reduction in CO2 in the atmosphere that produces the growth not the tax on net emissions itself.
A tax that reduces the structural deficit, unless it has a very high deadweight loss, increases growth by increasing investment. A progressive consumption tax would be ideal.
Alan Goldhammer
Apr 24 2021 at 8:27am
I’ve been listening to a podcast on election fraud in North Carolina which is quite good. It is from the ‘Serial’ production team. This week’s episode had an interesting take on zoning in one of the towns in the county. Only the white area of town was zoned for business so the black residents could not start business in their own part of the town and of course they were excluded from the white area. Zoning problems are not just restricted to housing.
David W
Apr 24 2021 at 9:57am
Yglesias is an optimist. Pointing out the racist origins of gun control had no effect on the debate. I don’t see why zoning would be any different.
Thomas Lee Hutcheson
Apr 25 2021 at 7:01am
The issue is not the origin, but the current effect of a policy
MarkLouis
Apr 24 2021 at 10:14am
It’s disappointing the Fed has not taken a leadership role here. They have an important message to send: productivity is they key to prosperity and our largest low-productivity sector is housing. If you want to run large fiscal programs while keeping inflationary pressure subdued, fix zoning. Instead, we will get lots of hand-waving and talk of transient phenomenon.
MarkW
Apr 24 2021 at 10:26am
Yglesias says:
Wages are higher in some cities (Boston) than in others (Houston) and that is partially offset by the fact that housing is more expensive in the high-wage cities.
I still say that the higher wages are caused in large part by higher costs of living (including housing). That is, the wage premium in Boston vs Houston is largely a bribe to get people to live there. One of the things that’s not clear to me in the calculations is if are they making the assumption that salaries in expensive cities would remain at existing higher levels if building restrictions were removed, housing supplies increased, and prices declined. If so, I think the potential GDP benefits are largely a mirage. If the overall cost of living was the same in San Francisco as in Indianapolis, the median salary for a plumber or dental hygienist would be the same too (or perhaps lower in SF since some people would accept lower salaries in order to enjoy California amenities).
Philo
Apr 24 2021 at 11:02am
You are right that the various parts of the economy are interconnected, and one change (eliminate zoning) will induce myriad changes elsewhere, which can be hard to foresee. But freeing up land use is like magically removing rocks from a harbor; whatever the ensuing details, it figures to be good on the whole.
MarkW
Apr 24 2021 at 11:52am
You are right that the various parts of the economy are interconnected, and one change (eliminate zoning) will induce myriad changes elsewhere
I’m arguing something much more specific. Let me try a a thought experiment.
In scenario #1, there’s a region with extremely rich soils and those who farm there enjoy high yields and high incomes. But there’s a problem — a dense thicket of regulations prevents most of the potential acreage in the region from being tilled. Then, the regulations are swept away, more people come in to run farms, and they enjoy high yields and incomes just like the original farmers. Local GDP booms.
In scenario #2, there’s region where millionaires and billionaires love to congregate (let’s call this hypothetical place ‘Aspen’). But there’s a problem. The wealthy need servants to clean their mansions, look after their children, cook their food, and so on. But the millionaires and billionaires have bought up all the available land for their ranches, and their servants (some of the best paid cooks, baby sitters, and cleaners in the country!) have to live far away in housing that is cramped and expensive. Some can’t find housing at all and live in cars and tents. Then, a new tunnel is finished that opens up large new areas for the cooks and cleaners to live in nice, inexpensive housing with short commutes. New immigrants rush to the region to enjoy the combination of high wages and pleasant living…only to find wages have dropped to levels no better than the places they left. Measured local GDP actually declines (since the wealthy don’t need any more servants than before but now can pay them much less).
I’m arguing that the calculations of great GDP boosts are based on using scenario #1 as a model while San Francisco and other expensive coastal cities are actually cases of scenario #2 (‘Aspen’ writ large). Solve the housing / cost of living problems and the dreams of riches will vanish.
robc
Apr 24 2021 at 12:47pm
That is (yet another) flaw in GDP.
My recommendation is to use a better metric. I think GDP-PPP would do the trick ( the GDP part is still flawed).
Thomas Lee Hutcheson
Apr 25 2021 at 7:07am
In both scenarios we get higher aggregate incomes; we do not need the unrealistic assumption that marginal products do not fall as new immigrants arrive. But part of the argument of removing restriction to more immigration to high cost cities is the (untested) belief that there remains unexploited economies of agglomeration.
KevinDC
Apr 24 2021 at 11:35am
This question is examined in Enrico Moretti’s book The New Geography of Jobs, and it actually doesn’t work out the way you’re predicting. In high productivity areas, people in service sector jobs earn more than people in equivalent jobs in low productivity areas, but in an amount over and above the increased cost of living. So the gains are real, not nominal. The cost of living in Seattle can be 50% higher than in Walla Walla, but a plumber in Seattle will make twice as much as a plumber in Walla Walla. (Not the real numbers or cities or professions here, I’m just using those as illustrations of what the data show.)
MarkW
Apr 24 2021 at 12:37pm
That seems inconsistent with California having the highest cost-of-living-adjusted poverty rate in the nation. Also, just randomly I checked median software engineer salaries in Boston ($79K) vs Indianapolis ($68K) and the comparative cost of living. Given the enormous cost-of-living differences (Boston is 93% higher), I find it hard to believe that the $79K/yr engineers in Boston live better than their $68K/yr counterparts in Indianapolis.
Matthias
Apr 24 2021 at 9:52pm
Software employment is still expanding rapidly. And an individual software developer’s compensation goes up to multiples of her starting salary over her carrier.
The upshot is that composition effects are huge in this sector.
So it’s hard to directly compare median salaries like that.
The median-paid engineer in San Francisco is not just having a well paid job, but also a ticket to further riches.
(Then there’s also startup employment to consider, which usually looks lower on the nominal total compensation, but sometimes results in stock option riches.)
Anecdotally (from working in the industry), the salaries are much higher in Silicon Valley than elsewhere, for comparative seniority.
Scott Sumner
Apr 24 2021 at 1:33pm
You are assuming a zero sum game. More housing makes almost everyone better off. Think in terms of output, not prices.
MarkW
Apr 25 2021 at 8:02am
You are assuming a zero sum game.
I don’t think so. Why is housing in San Francisco expensive? Because demand exceeds supply due to building restrictions. And why are ‘bio-bot’ rental fees (aka wages) expensive? Because demand also exceeds supply since bio-bots require special complementary storage units that are particularly expensive due to supply restrictions. If it weren’t for the storage unit requirement, bio-bots would be as plentiful and cheap as anywhere else. Expand the supply of storage units to reduce prices and the bio-bot rental fees will decline in tandem. Seems straightforward enough.
Which isn’t to say that expanding housing supply isn’t a good idea — it surely is, and I agree it would produce economic benefits. But in calculating those benefits, I’m arguing that we shouldn’t base the calculations on current artificial shortage-induced price levels.
At the same time though, companies seem to be figuring out how to send the work out to bio-bots stored in other regions rather than to wait for solutions to the local storage unit problem. So when (if!) local shortages are finally addressed, it may not matter nearly as much as expected. Or, rather, the problem may already be well on it’s way to being solved more by a decline in demand than an increase in supply.
In my view, a world in which work is mobile and workers are able to choose freely where to to live doing it (both nationally and internationally) would be a more just, congenial place than the traditional model where workers have to uproot and try to shoehorn themselves into a few already overcrowded areas (and into a few countries with mostly closed borders). So I’m rooting harder for the ‘work from anywhere’ solution than I am for the ‘zoning reform’ solution (and the probability of success now seems considerably higher too).
Scott Sumner
Apr 25 2021 at 12:19pm
But almost everywhere needs zoning reforms.
MarkW
Apr 26 2021 at 8:16am
But some areas obviously much more than others. And the thing that existing zoning regulations mostly prevent is higher density. But if workers can live anywhere and rarely or never have to commute to a fixed location who really needs more density?
And when we find that existing cities are bumping up against their limits, why not just make new ones? Or rather keep growing smaller cities into much larger ones. In my own lifetime, a whole host of smaller cities have grown dramatically (Seattle, Denver, Las Vegas, Austin, Charlotte, Orlando, etc) and we’ve certainly not run out of new candidates. Why not be satisfied with that?
Given new work patterns, it seems to me that the urgency of trying to fit more people into a central core will continue to diminish, and I don’t see any reason to prefer more growth in our few largest cities vs the continued emergence of secondary cities (which has been happening organically for decades without having to push through any difficult reforms).
Scott Sumner
Apr 26 2021 at 3:25pm
I’d rather rely on the market, rather than on what you think people “need”. The market suggests that more density in some areas would be very valuable.
MarkW
Apr 26 2021 at 4:37pm
The market suggests that more density in some areas would be very valuable.
Considerably less so than a year and a half ago, but sure, I’d rather see building restrictions eased and let market forces work. But politically, these kinds of reforms have proven to be somewhere between extremely difficult and impossible. And in the meantime, over there off to the side, the population of metro Phoenix has grown by a factor of 7x in my lifetime (and Las Vegas even more than that). While Manhattan office and apartment rental rates have been cratering, the Phoenix housing market has been red-hot. And there the limiting factor seems not to be zoning or other regulations issues, but shortages of building supplies. Now maybe all of this is a temporary effect of the pandemic and everything will revert to form in 2022, but I doubt it. We’ll see soon enough (much sooner, I expect, than we’ll see comprehensive zoning reforms in most places).
TMC
Apr 24 2021 at 11:25am
The ‘undesirables’ in this case are liberals. The argument in the op-ed was to have the federal government stay out of zoning, imposing outsiders’ wills. Seems consistent with Trump’s larger message, and with libertarianism in general.
Personally, I am YIMBY, and vote that way when able to, but also see the other side. So, there’s a democratic way to fix this. Allow the residents there to vote to change the zoning laws. That mechanism is in place right now. Having the feds get your by forcing your views on them when you can’t win the vote feels a tad authoritarian.
Scott Sumner
Apr 24 2021 at 1:35pm
Zoning laws themselves are authoritarian, forcing the community’s preferences on individual homeowners. It’s hard to imagine a less libertarian policy than zoning.
TMC
Apr 24 2021 at 3:33pm
If added after the individual bought the property, then yes, if not, then no.
Libertarians recognize the right of an individual to enter into contract, which included the zoning when they bought the property.
Unfortunately, how you use your land affects the value of mine if we’re close. Just the way it is. Zoning keeps like minded people close so I don’t devalue your property, and you don’t devalue mine. We even get to change the rules if we like.
A lot of YIMBY is by others who want to tell the property owners how to use their land. I’m happy with any change that allows you to use your property more to your liking, as long as it doesn’t affect mine too much. Same in reverse. And I was aware of all of this when I bought my property.
Scott Sumner
Apr 26 2021 at 3:31pm
If I buy property in a town where pot is illegal, that doesn’t make that drug prohibition a libertarian policy.
You said:
“A lot of YIMBY is by others who want to tell the property owners how to use their land. ”
Just the reverse; it’s the NIMBYs that want to tell property owners what they can do with their property.
J Mann
Apr 26 2021 at 9:50am
There’s an argument for letting different jurisdictions try different things. If Texas wants no zoning and New Mexico wants zoning, then at some cost, people can move to the jurisdiction they prefer.
A national zoning policy might me less libertarian than local zoning, even if it forces many policies to be more locally libertarian than they otherwise would be.
(I’m also doubtful that a national zoning policy will be super libertarian. My guess is that it will optimize for the choices that the party in power values, which are not typically liberty.)
Scott Sumner
Apr 26 2021 at 3:28pm
Don’t confuse the issue of whether local zoning should be allowed, with the issue of whether or not it is desirable. And should local governments have the option of banning porn? How about drugs? How about political speech?
Michael Rulle
Apr 24 2021 at 11:38am
What Trump was against was not free market deregulation, he was against just new types of zoning laws——In June 2019, he signed an executive order to have Ben Carson lead up an effort to eliminate zoning laws for multi-family housing. Yes, it may have been all fake—or maybe it was not. (I thought Trump was for the bad blog.)
As far as Carlson is concerned , that does not surprise me. A fake.
Those who prefer free markets in land use have tried everything under the Sun for decades, so these new clever ideas are just the latest attempt. They will never work, and it will never change. NIMBY is stronger than YIMBY. Why? It’s obvious—-pols get paid to grant favors——-free markets skip over pols.
But you know that.
Scott Sumner
Apr 24 2021 at 1:37pm
You are right that in 2019 the Trump administration was opposed to zoning laws that inhibited housing construction, but the policy changed in 2020.
Mark Z
Apr 24 2021 at 12:51pm
Deploying genetic fallacies even in defense a good policy is still dangerous imo, as it encourages poor reasoning. Even many good policies may have been defended (or even originated) for racist or otherwise dubious reasons.
It would be more fruitful in the long run (if less conducive to immediate intra-tribal harmony) to just try to convince them that markets are good.
Peter Gordon
Apr 24 2021 at 2:42pm
There is no good reason for the pre-emptive zoning of vacant land. Usually, this is blanket single-family zoning. The best planning would for private developers to suggest plans for new islands of (private) planning in any and all unzoned areas.
Michael Sandifer
Apr 25 2021 at 3:25pm
I think there’s a bit of naivete here, in a couple of ways.
First, while progressives approaching zoning issues from the racial disparate impact angle may spur more conservative resistance, conservatives haven’t exactly gone out of their way to attack such problems in the past. In fact, I doubt conservatives ever cared much about zoning. It was their libertarian/classical liberal allies who cared, who were always a small minority in the Republican Party.
True, that southern states have less zoning in many ways, on average, but then they used to have Jim Crow. They took a much more transparent approach, under conservative Democrats.
This is similar to the fraud within the progressive movement, which seems to clearly recognize that having a homeless population, for example, is a policy choice, yet have rarely taken any serious steps to address the problem.
The second way in which this very good post seems naive is that racism and other bigotry is never going away, unless human nature changes. There will never be a color-blind society, unless we engineer it out of our genome.
Michael Sandifer
Apr 25 2021 at 7:17pm
Also, I’m skeptical that many Democrats who own property in heavily zoned areas will vote against their economic interests, but I hope I’m wrong.
Michael Rulle
Apr 26 2021 at 9:51am
Michael—I live in one of the most Republican towns in the Northeast. In a heavily Democratic state. One thing is for sure, whether Dem or GOP, at least as far as local zoning rules are concerned——people always vote for their economic self interest—-I have seen it up close and personal. Occasionally, someone with excess power can accomplish restrictions which have no impact on anyone except the power person’s self interest and the person they are resisting——but that too is because it does not impact the welfare of majority.
Zoning is a way of life. Think about it. Imagine if you live on a nice country road with 10 acre zoning. And someone wants to take his 100 acre “plot” and build 33 houses on it—-or better yet—sell it to Walmart. This will lower housing values—-good for buyers and bad for owners.
‘But 40 years ago, owners wanted development and they got it. Now that new owners are here, they want less of it—in my town they want none.
Yet, it appears true, that free zoning markets result in desired outcomes—-I always use Houston as an example. Maybe it’s because it started that way before it grew.
Weir
Apr 26 2021 at 6:21am
Right now there are Democrats saying that homeless people have no right to pitch their tents in front of government buildings, only in front of someone’s business. Right now there are Democrats saying that looting isn’t violence, and I’m not aware of any prominent Democrat calling for a trial in the case of the Capitol Police officer who killed an unarmed woman.
But right now if a Democrat is willing to take a race-neutral anti-stabbing position, for example, and say outright that nobody of any complexion should be stabbed to death while a cop watches on from a distance, then there are a lot of voters out there who are anti-stabbing and anti-violence in general and open to a good-faith effort from Democrats who want to distance themselves from the violent rhetoric of Maxine Waters or Chuck “reap the whirlwind” Schumer.
The nationalist ideologues who insist on dividing stabbing victims into “white stabbing victims” and “black stabbing victims” are over-represented in the academy, in politics, in Hollywood, in sport and the media, but there are plenty of voters who are eager to hear a Democrat reject the ideologues and just say flatly that stabbing is wrong no matter the victim’s race. And most voters aren’t rich enough to afford a property in Topanga Canyon, so they’re concerned when they see Democrats make excuses for arson and looting and murder.
The trade-off means repudiating Jen Psaki, for example, and turning away from the race-baiting that Biden has been pursuing so vocally in his false claims about Georgia’s voting laws, and his racially divisive falsehoods in particular. The idea that the reforms in Georgia are worse than Jim Crow, and by implication that Delaware’s laws are not just “Jim Crow on steroids” but even worse than that, this isn’t reassuring to voters who think “defund the police” has been a disaster so far and that the Democratic Party is intent on “racial justice” at the cost of black lives.
The majority of black voters disagree with Biden’s claim that Jim Crow was less cruel than the idea of having to show some ID at a polling booth, so if Biden could stop pretending that most black voters are white supremacists he’d have a lot more room to build support for his better policies. Somehow he seems to feel that what he gains from race-baiting is more than he would lose by not calling most Americans, black and white, irredeemable racists. It’s baffling that he’s decided that race-baiting is the way forward.
BS
Apr 26 2021 at 1:44pm
So, an example of Arnold Kling’s Three Languages of Politics model, and the need to frame arguments differently to persuade people on each axis.
Philo
May 1 2021 at 7:30pm
And to prevent one group from hearing what you are saying to another group.
Floccina
Apr 30 2021 at 1:45pm
I sometimes have this weird thought that when it comes to racial issues in the USA that it would almost be better to make the rules direct and honest to achieve the racial goal than to do what we do.
That it would have been less bad to have had rules like some places in the south did, that blacks can live on this side of this line and whites on that side, rather than muck up the whole housing market to get that result. That maybe Harvard let it be known that they will accept enough blacks to get 13.5% black no matter the scores. That blacks get $x for reparations rather than minority set-asides. That a white police officer killing will automatically be charged with murder if the killed person is black. Blacks students be funded $x more per student than white students. etc. Instead we mess things up and still do not get the desired results. Maybe we could adjust to such concrete rules better.
Philo
May 1 2021 at 7:33pm
You are comparing the nth-best situation with the mth-best, with n and m *very* large numbers.
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