Culs de sac for safety?

"Evil cul-de-sac" flickr user rleong101

“Evil cul-de-sac” flickr user rleong101

At Cato At Liberty, Randall O’Toole provides a list of recommendations for reversing Rust Belt urban decline in response to a study on the topic from the Lincoln Land Institute. He focuses on policies to improve public service provision and deregulation, but he also makes a surprising recommendation that declining cities should “reduce crime by doing things like changing the gridded city streets that planners love into cul de sacs so that criminals have fewer escape routes.” This recommendation is surprising because it would require significant tax payer resources, a critique O’Toole holds against those from the Lincoln Land Institute. Short of building large barricades, it’s inconceivable how a city with an existing grid of streets would even go about turning its grid into culs de sac without extensive use of eminent domain and other disruptive policies.

O’Toole is correct that the grid owes its origins to authoritarian regimes and that today it’s embraced by city planners in the Smart Growth and New Urbanist schools. But while culs de sac may have originally appeared in organically developed networks of streets, today’s culs de sac promoted by traffic engineers are hardly a free market outcome. As Daniel Nairn has written, the public maintenance of what are essentially shared driveways “smacks of socialism in its most extreme form.”

Some studies have found that culs de sac experience less crime relative to nearby through streets, perhaps in part because they draw less traffic. However, it’s far from clear that a pattern of suburban streets makes a city safer than it would be would be with greater street connectivity. Some studies find that street connectivity correlates with greater social capital. O’Toole’s promotion of social engineering through culs de sac to create a localized drop in crime at the expense of a city’s residents’ social capital is not a clear win. If a pattern of culs de sac streets reduces a city’s social capital, it could increase overall crime rates.

O’Toole also makes a smart land use recommendation, suggesting that struggling Rust Belt cities can reduce regulation to foster development. He writes:

Reduce regulation, including zoning rules, so property owners can engage in urban renewal without government subsidies or top-down planning. Historic preservation ordinances may sound cool, but they are one of the biggest obstructions to private redevelopment.

It makes sense for cities like Detroit to reduce or eliminate their zoning and permitting requirements, allowing as many new businesses as possible to take advantage of the their inexpensive prices. Interestingly, this recommendation for deregulation in the Rust Belt directly contradicts his past writings on deregulatory upzoning in other cities. O’Toole’s native Portland has seen deregulation allowing denser development, and in this case he advocates preserving neighborhood character over allowing the market to drive development styles. I’m glad to see he’s changed his tune to support deregulation.

Ranking State Land Use Regulations

Yesterday, the Mercatus Center released the third edition of Freedom in the 50 States by Will Ruger and Jason Sorens. The authors break down state freedom among regulatory, fiscal, and personal categories. At the study’s website, readers can re-rank the states based on the aspects of freedom that they think are most important, including some variables related to land use and housing. The available variables include local rent control, regulatory takings restrictions, the Wharton Residential Land Use Regulatory Index, and an eminent domain index.

Using only these “Property Rights Protection” variables, Kansas ranks as the freest state, followed by Louisiana, Indiana, Missouri, and South Dakota. Texas, sometimes cited as the state without zoning, comes in at 18th. The least free state is New Jersey, with Maryland at 49th, followed by California, New York, and Hawaii. This result — states with some of the most expensive cities being the most regulated — is unsurprising.

In the places with the freest land use regulations, where a developer would be able to build walkable, mixed-use neighborhoods without going through a burdensome entitlement process, there isn’t demand for dense development. This may be one reason why the Piscataquis Village project, an effort to build a traditional city, is happening in a sparsely populated Maine county because new development of this sort is simply not permitted near any population centers.

As Stephen recently pointed out, public opinion in New York tends to see city policies as wildly pro-development:

In spite of the popular impression of New York as a builder-friendly city that’s constantly exceeding the bounds of rational development, the city’s growth over the past half-century has been anemic, and has not kept pace with the natural growth in population.

This ranking of New York near the bottom of the index demonstrates what urban economists already know — new development is not permitted to be built where rents are highest and it’s most needed in spite of perception of pro-development policies. Does anyone have development experience in some of the freest states? Does this ranking match your perception?

Update: For full disclosure I was a project manager on Freedom in the 50 States.

Irrelevant real estate trends

Earlier this week Wendell Cox wrote a piece at New Geography arguing that projections for increasing demand for multifamily housing relative to single family homes are incorrect. He was criticizing a study by Arthur Nelson that predicts increased demand for multifamily housing relative to single-family housing in California between 2010 and 2035. So far, Cox points out that this hypothesis is not being fulfilled; between 2000 and 2008 slightly over half of newly occupied housing units were single-family homes on conventional lots (larger than 1/8 acre), not indicative of a shift in preferences toward multifamily housing.

Cox emphasizes that his data is based on revealed preferences rather than forecasts or surveys which may indicate a false preference for denser housing. However, he does not acknowledge that these preferences he cites are not revealed in a free market. The mortgage interest tax deduction biases home buyers toward larger homes, the complex entitlement process for dense infill development restricts supply of denser housing, and the the zoning and parking requirements that regulate development all shape revealed consumer decisions.

Both Cox and Nelson seem to base their views of consumer preferences heavily on introspection, assuming that over time more Americans will come to share their preference for suburban or urban living respectively. And they both take the same approach of looking at the real estate trends aggregated across the entire state. This is an interesting question for academics, but not a particularly relevant area for real estate markets. Real estate is local, and state trends are not likely to apply to many cities and neighborhoods. The average home sold in California went for $309,000 at $195 per square foot last month. However this statistic is meaningless for West Hollywood residents where the  average sale price was $378 per square foot. It’s equally meaningless for Bakersfield residents where the per-square-foot price was $87. Only one of these local areas faces a housing affordability problem, which Cox emphasizes is an important concern for land use policy.

Fortunately for consumers, it’s not necessary for academics to accurately forecast changing real estate preferences. They only need for local developers and homebuilders to do so, and the profit incentive leads developers to do just this, unless policy prevents them from doing so. High housing costs indicate supply restrictions that prevent developers from meeting consumer demands. If Bakersfield city planners adopted a binding urban growth boundary, the type of policy Cox decries, we would see the cost of conventional single family homes rise. In most of the places where we see housing affordability problems such as West Hollywood, it’s not Smart Growth policies that are to blame, but rather conventional zoning that prevents increased density from bringing down housing costs.

The most notable exception to this is Portland’s Urban Growth boundary which, in conjunction with density restrictions, keeps house prices in the city at $200 per square foot compared to the state average of $135. This UGB seems to be the driving force behind the work of many anti-density “market suburbanists,” which alone is enough of a reason to oppose this policy. However, in the cities where residents pay the greatest premium for housing, it’s likely that we would see much more multifamily home construction in a freer market.

If zoning restrictions and parking requirements were relaxed in areas of the country where residents currently pay the highest premiums to live, we would in large part see more multifamily construction rather than single family. This is why, despite the cumbersome entitlement process for multifamily buildings in many cities, and the mortgage interest deduction luring consumers to larger owner-occupied homes, over half of last year’s building permits were for multifamily units in some of the country’s most expensive cities like Los Angeles, New York, and Washington, DC.

The Renewed Debate on Inclusionary Zoning

Stephen Smith and I co-wrote this post. In case you haven’t been following Stephen elsewhere, he’s also been writing at The Atlantic Cities and Bloomberg View.

 

This year, some of the first apartments and condos subject to inclusionary zoning laws in DC are hitting the market, stoking debate over development laws that the city adopted in 2007. The inclusionary zoning requirement is currently stalling the city’s West End Library renovation with Ralph Nader leading efforts to include an affordable housing aspect with the library project. Inclusionary zoning advocates often base their support on the desirability of mixed-income neighborhoods, while challengers argue that inclusionary zoning is an inefficient way to deliver housing with unintended consequences.

Heather Schwartz, who studies education and housing policies at the RAND Institute, says that one important feature of this policy tool is that it gives low-income families access to high-income neighborhoods while at the same time limiting the number of low-income residents in a neighborhood. She said, “Since IZ is a place-based strategy that tends to only apply to high-cost housing markets, it can offer access to lower-poverty places than housing vouchers and other forms of subsidized housing have historically done.”

David Alpert, editor-in-chief of Greater Greater Washington, a local urban planning blog, offers another argument in favor of inclusionary zoning, “a policy that builds support for both greater density and affordable housing,” he said in an email. “Much of the opposition to greater density involves a feeling that it is just a ‘giveaway’ to developers who make the profit and impose some collateral burden on a neighborhood, but many people are more supportive of the density if it serves an affordable housing goal.”

While inclusionary zoning proponents may see its ability to introduce just a few low-income residents to a higher income neighborhood as an asset, it does not typically meet an area’s demand for affordable housing. Montgomery County, MD, outside of Washington, DC has one of the nation’s most established inclusionary zoning problems. In over 30 years, inclusionary zoning has created fewer than 13,000 housing units in the county, which area developer AJ Jackson with EYA describes as “a drop in the bucket of housing demand.”

Jackson explains that the requirement to take a loss on some units leads developers to build only higher end housing, where they can make up the losses they take on the affordable units, making the remaining market-rate units still more expensive. Jackson suggests that the only viable solution to the problem of a lack of affordable housing is to increase allowable densities broadly. He points to several neighborhoods in DC and surrounding counties are currently zoned for commercial or light industrial uses, but that profitable residential development could succeed with zoning changes.

However, he points out the political obstacles to this type of development. He said, “For these jurisdictions, office density and jobs are great. But residents take more than they give in tax revenues,” so city officials may oppose residential development for budget purposes. An even greater obstacle may be current residents’ opposition, a well-documented setback to all sorts of DC-area projects from residential to restaurants.

The political incentives that confront politicians when they do decide to embrace more development complicate the density bonus calculus. The pro-density argument for inclusionary zoning is that the bonuses allow developers to build where they otherwise could not, but when an area is being targeted for development anyway, anti-density activists can easily anticipate bonuses when base zoning allowances are being hashed out and factor them in to their maximum tolerated building envelope. If those who oppose development in and of itself have enough clout, the “bonus” that developers can be reduced just a technicality.

For example, during the rezoning process for Manhattan’s West Chelsea neighborhood in 2005, New York City Assemblyman Richard N. Gottfried wrote in a statement that the city should follow the lead of the Hudson Yards rezoning, where the affordable housing programs were made “effectively, if not technically, mandatory,” which he attributed to “the leadership of Councilmember Christine Quinn,” now frontrunner to succeed Bloomberg as mayor.

The city did eventually take steps to increase the amount of affordable housing built by Hudson Yards developers by tweaking the “bonus” formula so that the rezoning yielded more affordable housing without more bulk than the administration’s proposal. Some below-market units were carved out of the proposed development, while others were pushed off-site – the affordable housing “will not generate additional bulk in the neighborhood through an inclusionary bonus,” as Chelsea Now wrote in 2009. The affordable apartments will be built on city-owned plots 15 blocks north, which given their location, were destined for development soon anyway.

And for those who support inclusionary zoning programs because of the extra density they can bring to neighborhoods, Assemblymember Gottfried’s suggestion for West Chelsea should be especially troublesome: “The Commission should look for places to lower the base FAR to allow the area available for affordable housing to increase.

Indeed that seems to be what happened. “Building density in the entire [West Chelsea] district has been reduced from the previous plan,” The Villager wrote the next month, “in order to provide more incentives for developers to apply for higher density under the inclusionary housing program.”

And New York City is not the only place that affordable housing groups have fought as-of-right density in the name of bonus incentive programs. Last year in California, some housing advocates were hostile to legislation, supported by developers and environmentalists, that would have forbidden municipalities in the state from requiring more than one parking space per unit in neighborhoods adjacent to frequent transit corridors.

As Lisa Payne, policy director at the Southern California Association of Nonprofit Housing, told the California Planning & Development Report in regards to their opposition to Assembly Bill 710, “We have 30 years of history with density bonus law, that recognizes the value of trading a planning concession, whether it be height, density, or parking for supplying the mix of incomes in a project. This bill would have removed that tool.” Affordable housing groups withheld their criticism of the 2012 iteration of the parking reform bill, but it has yet to pass.

While inclusionary zoning provides significant benefits to residents who are lucky enough to live in allotted affordable units, it does not provide sufficient housing units to address many cities’ housing affordability challenges, and in some cases can even breed alliances between affordable housing advocates and anti-density constituents. As Jackson explains, permitting more and denser development is the only viable path to this goal.

Selling the Rights to Greater Density

At Next American City, Mark Bergen has an interesting long-form piece on municipal infrastructure financing. He argues that the property owners who benefit from public policies, such as infrastructure investment, should be required to fund these policies. He suggests infrastructure improvements should be paid for with Tax Increment Finance or value capture (PDF). I don’t necessarily agree with his infrastructure funding prescriptions, and may take these up in a future post. What I found even more interesting, though, is his suggestion that developers should pay for zoning changes.

The basis for this proposal comes from the Georgist land tax. Because in urban settings, land’s value largely comes from the amenities surrounding it, landowners do not have the exclusive rights to this value, according to Henry George. The suggestion that developers should pay for the rights to build on the land they own is based, Mark explains, on a policy from São Paulo, called Certificates of Additional Construction Potential (CEPAC). These bonds, representing rights to build, are transferable and are publicly traded. He quotes Gregory K. Ingram of Lincoln Institute of Land Policy:

“They’re essentially selling zoning changes,” explained Ingram. Crucially, the building fees have not eaten away at developers’ profits. By some accounts, the rates of return for real estate in the districts increase.

[...]

The notes, sold by municipalities, are one of the world’s most innovative public financing techniques. Across many sections of São Paulo, if a developer hopes to build or do nearly anything with her property — adjust its uses, expand outward or upward — she must first buy a CEPAC.

On a fairness level, selling zoning changes seems wrong to me. Current zoning policies are an arbitrary starting point, so it doesn’t make sense that developers should have to pay for permission to change a policy that is limiting their rights. Additionally, the overarching objective of value capture, as Mark explains, is to facilitate progress toward Smart Growth objectives. To the extent that these objectives include affordable housing, walkability, and permitting denser development, great progress can be made toward these goals with upzoning alone without significant public investments.

On the residential side, increasing the housing supply is the only feasible path toward large numbers of affordable homes. On the commercial side, walkable neighborhoods cannot be achieved without permitting more mixed-use, dense development. From this angle,  São Paulo’s CEPAC policy would act as a tax on Smart Growth.

From a political perspective, it seems that the CEPAC policy would be subject to abuse. Those who oppose density on the conservative side would lobby for the issuance of few CEPAC bonds. Those on the progressive side who support increased public revenue for their favorite causes may also support the issuance of few bonds, requiring developers to pay high prices for the rights to build.

Despite these problems, though, as Mark points out in Brazil the program has led to increased developers’ profits indicating the program has not had these detrimental effects. I was not familiar with the program before reading Mark’s article, and I don’t know much about how CEPACs have played out politically in Brazil. However, I can imagine that paying for the rights to build would be an improvement for many U.S. developers, even though they act as a tax on density.

Currently, to achieve the zoning changes necessary for increasing density and market-rate affordable housing, developers have to spend significant resources of time and money to go through an uncertain political process. In some cities, as-of-right development is so limited that  the rule of law does not extend to urban development. Given this status quo, CEPAC bonds could benefit developers by removing some of the uncertainty surrounding zoning variances. Rather than spending money on lobbying for property rights they may never achieve, developers could simply buy these rights on the open market. This might also benefit small-business development if buying the needed bonds is cheaper than investing in a lobbying arm.

While I think many market urbanists would prefer to see more housing and walkable development allowed as-of-right, perhaps selling these rights is a second-best solution. Additionally, by compensating taxpayers for the damages to their light and air, CEPAC bonds could reduce the validity of NIMBY arguments. Is anyone more familiar with how the CEPAC program has changed land use rights in Brazil or other ways in which value capture has changed land use policy?

Rent control by any other name

Earlier this week, David Alpert wrote a piece at Greater Greater Washington on the benefits of inclusionary zoning and why economists should support it. I would counter that IZ as designed in DC is not an efficient program for providing affordable housing, and to the extent that it does provide significant numbers of price-controlled housing units, it will necessarily have many of the negative attributes of rent control.

IZ works by requiring developers to provide below-market cost units in addition to market rate housing, and providing them with “density bonuses” in exchange. The problem with this is that building more units in itself makes housing more affordable. Obviously I understand the many political obstacles to allowing more residential development, but I don’t think that introducing units that are permanently price-controlled is the appropriate price to pay for this political concession. As Walter Block writes at the Library of Economics and Liberty:

Economists are virtually unanimous in concluding that rent controls are destructive. In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing available.” Similarly, another study reported that more than 95 percent of the Canadian economists polled agreed with the statement. The agreement cuts across the usual political spectrum, ranging all the way from Nobel Prize winners Milton Friedman and Friedrich Hayek on the “right” to their fellow Nobel laureate Gunnar Mydral, an important architect of the Swedish Labor Party’s welfare state, on the “left.” Myrdal stated, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.”

Consumers and producers in the IZ market will face the same incentives that rent control creates, and the cost to developers of providing below market units will act as a tax on market rate units. Price controls on housing are of course wildly popular among those who are able to secure them. They are also popular among politicians because there is no better voter than one who owes his home to his elected official. By definition those who cannot afford to live in a city because of a housing shortage are not voters, so politicians need not consider their perspectives on IZ.

Many IZ units are owner-occupied rather than rental units. This gives it one advantage in that homeowners will have an incentive to keep up their home because they live in it. However they will not have an incentive to invest in it since they will never be able to sell it for above the IZ price. An effective IZ program will lead to the same shortages of market rate housing found under rent control, and developers will face every incentive to ensure that IZ units cost less to build than those they will be selling at market price. And a downside of tying IZ to homeownership is that this adds to one more government policy encouraging people to buy homes they may not be able to afford. The inherent risks need not be spelled out here.

In their paper Inclusionary Zoning economists Ben Powell and Edward Stringham ask, “If the government has the ability to offer subsidies or zoning exemptions that will increase the supply, then why must those policies be accompanied with a program that restricts the supply?” At present, IZ in DC probably doesn’t provide enough units to meaningfully affect market prices, but it also doesn’t help a meaningful percentage of the people who would like to live in DC but cannot afford to. The best we can hope for is that the program never manages to achieve enough “success” to bring with it all of the detrimental effects of rent control.

Whether or not IZ as implemented in DC will raise the cost of market rate units is an empirical question that is too soon to answer. I would guess that in the near term there are too few units to make a difference in the price of market rate housing, but this is also a sign the IZ is not helping a meaningful number of people find housing. In the longer term, IZ will result in more expensive and fewer market rate units in an already housing-starved city. Not a good idea in this urbanist economist’s book.

Permitting more development–much more–is the only way to provide affordable housing for those who demand it in DC. IZ has been framed as a way to bargain for this needed development, but it’s not going to provide the number of housing units needed, and it’s going to reduce affordability for many people who are unable to rent or purchase subsidized units. For those people for whom housing (and many other basic goods) are unaffordable, we can provide a combination of welfare and charity, but introducing price controls that won’t even help people at the bottom of the income distribution is the wrong path to take.

An Early Defense of Zoning

At Discovering Urbanism, Daniel Nairn offers an interesting summary of Edward Murray Bassett’s 1922 defense of zoning (available as a free e-book). Bassett faced opponents who were against a new type of land use regulation, many arguing that zoning was unconstitutional. In retrospect, some of his arguments defending zoning are comical. He asserts that zoning would never go so far as to direct aesthetics because the courts would protect us from the overreach. It would be interesting to hear what he’d have to say about a planning commission meeting today. Nairn’s entire analysis is interesting, but I was particularly intrigued by Bassett’s assertion that zoning fosters cooperation. As Nairn summarizes:

Cooperation yields overall larger return on investment for all property owners. This was Bassett’s primary concern, one that he underscored with a number of prisoners’ dilemma scenarios. For example, “In some of the larger cities a landowner in the business district is almost compelled to put up a skyscraper because if he put up a low building, his next neighbor would put up a higher one that would take advantage of his light and air.” He asserted that skyscrapers were probably not a sound investment in their own right, but they were built anyway in a virtual arms race for public goods of light, air, privacy, and scenery. Zoning was the truce that made everyone better off.

I’m not sure that I follow Bassett’s logic here. If light and air are only available on floors that are higher than the floors of the neighboring buildings, then only the top few floors of any building would typically have this asset. It’s almost as if he’s talking about a race to the highest roof deck here. Aside from the problems with how he makes this argument, it is worth a look to determine whether or not zoning takes a positive step toward cooperation in the land market. Whether or not an institution fosters cooperation is a key factor in determining its success or failure. With cooperation, trade becomes a positive sum game rather than a negative sum game. For example, property rights is an institution that clearly fosters cooperation; when they are not well-defined, as in black markets, trade is often accompanied with violence.

Restrictions on land use, whether they come from public sources (zoning, height limits) or private sources (deed restrictions, HOAs) face trade offs between providing clear expectations of future development and permitting flexibility as land’s highest-value use evolves over time. On the far end, deed restrictions make it difficult to impossible to change land use restrictions, while HOAs and BIDs can often change restrictions with super majority votes from their members. Of course HOA rules often veer toward the draconian, but they are easier to overturn than other types of regulations. HOAs and BIDs also lack the stability of government entities. Since they are not likely to be around as long as cities, the time horizon of their rules may be indeterminate in some cases.

According to Bassett, zoning represents the best of both worlds, a compromise between permanent deed restrictions and rules that can be overturned too easily. On the one hand, it allows a landowner not to worry about his neighbor “taking advantage of his light and air” by prohibiting buildings taller than what zoning permits. Bassett writes from the perspective of developers and suggests that building skyscrapers is much like an arms race. He asserts that because elevators take up square footage that cannot be leased, skyscrapers are less profitable than lower buildings. He suggests that the only reason for building skyscrapers is to prevent the next door building from casting a shadow on a wasted setback. Of course it is the case now, as then, that when developers build tall buildings is because they think the net present value is greater than that of a shorter building. Only the exceedingly rare developer who doesn’t want to make money would pick a building design for the purpose of not allowing his neighbor to take advantage of light.

Many people have made the argument that tall buildings produce externalities, but he doesn’t quite identify these externalities correctly; they do not fall on the developer who wants to prevent his neighbor from taking free light and air, but rather on the owners of shorter buildings and their tenants. Bassett’s argument is instead more reminiscent of the fallacious Marxist argument that competition among firms hurts welfare. So, in my estimation, he does not make a strong argument that zoning produces cooperation by preventing a race to the bottom, or top, as the case may be. Collusion among building owners to restrict building supply may be a form of cooperation, but it’s not the type that benefits society.

As Nairn summarizes, Bassett also support zoning because:

Zoning stabilizes building and property values, by signaling to investors what they can expect from a certain district. Markets work when people know what they are buying, and zoning creates some assurance that the product will not change fundamentally. This reason is why housing developers were among the most ardent supporters of zoning in the early stages.

For much of the history of Euclidean zoning, this may have been its most important quality. Once cities introduced comprehensive plans, it was clear what types of buildings could be built on each land parcel, providing rule of law in the land market so that buyers and sellers both knew land’s potential uses, and all buyers and sellers were equal before the law.

Today, one of the biggest problems with zoning is that this rule of law has been eroded in some major cities. Rather than introducing broad changes, such as widespread upzoning, to meet cities’ evolving needs, planners in cities such as New York and DC have taken the approach of relying on variances and Planned Unit Developments as well as requiring projects to achieve neighborhood approval. Going into the approval process, developers often don’t know whether their plan will be approved or denied, and this makes buying and selling properties highly speculative. These tools permit flexibility in land use, but at the great expense of losing the rule of law that is key to allowing market participants to form expectations for the future. Without the rule of law, planning approval processes that don’t rely on  as-of-right development are the worst of all worlds; they limit potential opportunities for trade while introducing uncertainty into the market.

Brookings Study Ties Exclusionary Zoning to Gaps in School Performance

Last week the Brookings Institute released a study by Jonathan Rothwell on the relationship between exclusionary zoning and school performance. He points out that this is the first study linking zoning to educational outcomes. The findings demonstrate that cities with stronger exclusionary zoning policies have larger differences in test scores across schools. This finding makes sense, as exclusionary zoning policies segregate households by income, and household income is strongly correlated with children’s educational outcomes.

This research is important because school district quality is a key factor in families’ decisions of where to live. I think that school quality is likely an important factor behind many NIMBY efforts too, as parents in a neighborhood may be afraid that lower-income residents moving into the school boundary will bring down the quality of education. Whether or not this is a valid concern on NIMBYs’ part, perception is all that matters.

Rothwell’s dependent variable is called the school-test score gap, or the difference between a school’s test results and the state’s test results. So his results don’t tell us whether reducing exclusionary zoning will improve individuals’ outcomes or merely bring schools’ averages more in line. Of course what we would like to see is improved absolute educational outcomes, particularly for those students with the poorest performace. Theory does suggest some reasons that more equal schools could improve absolute student results, one being that more experienced teachers typically do not work in a city’s worst-performing schools. Another is that students may do better when they are surrounded by higher-achieving classmates. Through those channel and perhaps others, reducing disparities across schools could improve low-income students’ results.

In developing the case for why it’s important for children of all income levels to attend schools with higher median test scores, Rothwell cites studies that demonstrate that “the quality of schooling is enormously important to both test scores and future economic success.” However, he also acknowledges that studies involving school lotteries, in which children are randomly assigned to higher or lower performing schools, have less clear results about the impact of schooling on education. This is a key distinction because many studies of education are plagued by the difficulty of collecting data on some of the variables that affect student success. For example, parental involvement in schooling, parents’ time spent reading with children in early childhood, and other aspects of a child’s lifestyle are difficult and expensive to measure. Understandably, then, these variables are often omitted from studies of educational outcomes, biasing the estimated impacts of the variables researchers do include. This is particularly true when studying the effects of a child going to a higher-performing school without a lottery; a parent who makes a significant effort to get his child into what he believe is a better school than the neighborhood school is likely making extra effort to help out his child’s education at home in other ways.

While Rothwell is supportive of policies such as charter schools and voucher programs that give parents the opportunity to send their children to schools outside of the one tied to their address, he seems to be even more supportive of eliminating exclusionary zoning and requiring municipalities to allow multifamily housing. While clearly I am against exclusionary zoning, I’m not convinced that this is necessarily the right policy tool for improving educational outcomes. Instead, I would suggest any policies that move away from requiring children to go to the school in their neighborhood. This connection eliminates any semblance of competition among schools and contributes to the incentives for residents to lobby against potential new neighbors. Land and education are two separate markets that government has tied together with negative (un)intended consequences.

From an educational perspective, though, one reason to support the elimination or reduction of exclusionary zoning is that this would allow more people to move to cities. Cities contribute to economic growth, and we know that children from higher income families tend to do better in school. Future studies could build on what Rothwell has contributed by looking at low-income students’ educational attainments when land use restrictions are relaxed or when school attendance is not tied to where they live.

Note: Rothwell also recently wrote a great piece in The New Republic about zoning as an extractive institution. I hope to write more about zoning from a new institutional perspective in the near future.