Market Urbanism http://marketurbanism.com Liberalizing cities | From the bottom up Wed, 17 Apr 2019 19:28:58 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.10 https://i2.wp.com/marketurbanism.com/wp-content/uploads/2017/05/cropped-Market-Urbanism-icon.png?fit=32%2C32 Market Urbanism http://marketurbanism.com 32 32 3505127 High-Rises and Street Life http://marketurbanism.com/2019/04/17/high-rises-and-streetlife/ http://marketurbanism.com/2019/04/17/high-rises-and-streetlife/#respond Wed, 17 Apr 2019 19:28:41 +0000 http://marketurbanism.com/?p=11011 One common argument against tall buildings is that they reduce street life, because the most expensive high-rises have gyms and other amenities that cause people to stay inside the buildings rather than using the street.  Because Manhattan has plenty of high-rises and plenty of street life, I have always thought this was a dumb argument. […]

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One common argument against tall buildings is that they reduce street life, because the most expensive high-rises have gyms and other amenities that cause people to stay inside the buildings rather than using the street.  Because Manhattan has plenty of high-rises and plenty of street life, I have always thought this was a dumb argument.

But until recently I’ve never thought of any way to prove or disprove the argument empirically- until now.  It seems to me that if high-rises were bad for street life, places with expensive high-rises would have lower Walkscores than other neighborhoods; I reason that if high-rise residents stayed inside rather than going outside, they would be surrounded by fewer businesses than low-rise neighborhoods.

So do high-rises generally have lower Walkscores? Not in dense areas; for example, 432 Park Avenue, one of Manhattan’s most expensive buildings, has a Walkscore of 98.  Similarly, Boston’s Millenium Tower, a 60-story residential skyscraper, has a Walkscore of 96.

 

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What Should I Read to Understand Zoning? http://marketurbanism.com/2019/04/16/what-should-i-read-to-understand-zoning/ http://marketurbanism.com/2019/04/16/what-should-i-read-to-understand-zoning/#respond Tue, 16 Apr 2019 13:00:28 +0000 http://marketurbanism.com/?p=10991 We are blessed and cursed to live in times in which most smart people are expected to have an opinion on zoning. Blessed, in that zoning is arguably the single most important institution shaping where we live, how we move around, and who we meet. Cursed, in that zoning is notoriously obtuse, with zoning ordinances […]

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A stack of books

We are blessed and cursed to live in times in which most smart people are expected to have an opinion on zoning. Blessed, in that zoning is arguably the single most important institution shaping where we live, how we move around, and who we meet. Cursed, in that zoning is notoriously obtuse, with zoning ordinances often cloaked in jargon, hidden away in PDFs, and completely different city-to-city.

Given this unusual state of affairs, I’m often asked, “What should I read to understand zoning?” To answer this question, I have put together a list of books for the zoning-curious. These have been broken out into three buckets:

  1. “Introductory” texts largely lay out the general challenges facing cities, with—at most—high-level discussions of zoning. Most people casually interested in cities can stop here.
  2. “Intermediate” texts address zoning specifically, explaining how it works at a general level. These texts are best for people who know a thing or two about cities but would like to learn more about zoning specifically.
  3. “Advanced” texts represent the outer frontier of zoning knowledge. While possibly too difficult or too deep into the weeds to be of interest to most lay observers, these texts should be treated as essential among professional planners, urban economists, and urban designers.

Before I start, a few obligatory qualifications: First, this not an exhaustive list. There were many great books that I left out in order to keep this list focused. Maybe you feel very strongly that I shouldn’t have left a particular book out. That’s great! Share it in the comments below. Second, while these books will give you a framework for interpreting zoning, they’re no substitute for understanding the way zoning works in your specific city. The only way to get that knowledge is to follow your local planning journalists, attend local planning meetings, and dive into your local zoning ordinance.

With all that said, let’s jump right in:

Introductory

The Death and Life of Great American Cities by Jane Jacobs. If you read only one book on this list in your life, it should be this one. Arguably the most important urban planning book of the twentieth century, Death and Life critiques the theory and practice of planning in a way that’s simultaneously engaging and exhaustive. Of particular interest to those curious about the intersection of zoning and urban design.

Triumph of the City by Edward Glaeser. Why do people keep flocking to cities in the age of the internet? Why are cities so much more productive than suburbs or small towns? Triumph of the City answers questions like these while easing readers into the field of urban economics. It’s fun, current, and accessible. Of particular interest to those curious about the intersection of zoning and the economy.

Green Metropolis by David Owen. Big, dense cities are good for the environment and environmentalists should fight against rules that keep them from getting bigger and denser. It speaks to Owen’s accomplishment that this once controversial thesis is now common knowledge. Green Metropolis will help you understand how we got here. Of particular interest to those curious about the intersection of zoning and environmentalism.

Intermediate

Zoned In the USA by Sonia A. Hirt. This is normally the first book I recommend to otherwise well-read urbanists who would like to learn more about zoning. Hirt’s Zoned In the USA has a little bit of everything, explaining how zoning works, where it came from, how it interacts with housing, and how it works in other countries. For those interested in going deeper down the rabbit hole, it also serves as a comprehensive literature review for the field.

The Zoning Game by Richard F. Babcock. Understanding zoning isn’t just a matter of understanding what’s in the codes or on the map—it’s also a matter of understanding how it works in practice. For that kind of institutional and procedural knowledge, Babcock’s The Zoning Game is unquestionably the go-to text. This will go a long way toward helping you understand specific zoning fights happening in your community. And for what it’s worth, it’s also pretty funny.

The Color of Law by Richard Rothstein. Released in 2017, Rothstein’s book is a highly accessible survey of the ways that zoning—alongside policies like federal housing finance—helped to segregate U.S. cities. The Color of Law will introduce you to important zoning concepts like single-family zoning, take you through some early zoning early history, and paint a big picture of housing policy, all in a way that’s immediately relevant to politics today. Of particular interest to those curious about the intersection of zoning and race.

Advanced

Order without Design by Alain Bertaud. If Death and Life is the first book I suggest to new urbanists, Order without Design is the first book I suggest to professional urbanists. Drawing on over 50 years of experience working as an international planner, Bertaud’s work fludily weaves together the theory and practice of land-use regulation. It’s also packed with charts, maps, and diagrams illustrating most of the key concepts.

Zoned American by Seymour I. Toll. There are a handful of histories of zoning. But for my money, Toll’s Zoned American is the best. Toll manages to capture the social context, political calculations, and legal challenges that gave rise to New York City’s 1916 zoning ordinance, which in turn evolved into a model for the nation as a whole. It helps that Toll’s elegant prose reads like the opposite of a zoning ordinance.

Zoning Rules! by William A. Fischel. This is, to put it bluntly, is the bible when it comes to the economics of land-use regulation. Drawing on his extensive CV, Fischel deals with anything and everything having to do with zoning, including advanced concepts like the homevoter hypothesis, how Coase theorem informs land-use fights, and the institutional reforms that could rein in excessive regulations. As with Zoned in the USA, Zoning Rules! doubles as a world-class literature review.

Land Use Without Zoning by Bernard H. Siegan. Best known for his landmark essay on how land-use regulation works in zoning-free Houston, Land Use Without Zoning is Siegan’s book-length treatment of this and other subjects. To date, it’s the perhaps the most thoroughgoing critique of zoning as an institution, with lots of time spent on alternative systems of land-use regulation.

Honorable Mentions

Snob Zones by Lisa Prevost. A great exploration of exclusionary zoning in New England, told through stories of actual zoning fights.

The Rent Is Too Damn High by Matthew Yglesias. Full disclosure: I still haven’t read this. (I know, I’m sorry!) But it seems to have turned a heck of a lot of people on to the intersection of housing affordability and land-use regulation.

The Zoning of America: Euclid v. Ambler by Michael Allan Wolf. A brisk history of the landmark Supreme Court case that legalized zoning. Of particular interest to those curious about the intersection of zoning and law.

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Homeownership and the Warren Housing Bill http://marketurbanism.com/2019/04/14/homeownership-and-the-warren-housing-bill/ http://marketurbanism.com/2019/04/14/homeownership-and-the-warren-housing-bill/#respond Mon, 15 Apr 2019 00:04:09 +0000 http://marketurbanism.com/?p=10978 Elizabeth Warren’s housing bill has received a lot of love from those who favor of land use liberalization. Like Cory Booker’s housing bill, the Warren bill would seek to encourage state and local land use reform using federal grants as an incentive. Warren’s bill would significantly increase funding for the Housing Trust Fund and provide […]

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Elizabeth Warren’s housing bill has received a lot of love from those who favor of land use liberalization. Like Cory Booker’s housing bill, the Warren bill would seek to encourage state and local land use reform using federal grants as an incentive. Warren’s bill would significantly increase funding for the Housing Trust Fund and provide a small increase in allocations for public housing maintenance. However, Warren’s bill also includes new subsidies to homeownership and policies that could reduce the production of new renter-occupied housing relative to owner-occupied housing.

There’s a trade off in housing policy between promoting homeownership as a wealth-building tool and promoting affordability that politicians, including Warren, have failed to confront.

Rather than promoting housing affordability by rolling back policies that subsidize homeowners at the expense of renters, Warren’s bill seeks to reduce exclusionary, suburban zoning at the same time it introduces new policies to incentivize homeownership.

First, Warren’s bill would require most foreclosed homes to be sold to new owner-occupants, rather than to landlords who would rent them out. The intention of the bill is to prevent institutional investors from profiting from foreclosures, but this approach has a strong anti-renter bias. When changes in economic conditions, demographics, or preferences lead to an increase in the proportion of Americans who want to rent rather than own, this policy would stand in the way of homes being adapted to meet new needs.

Second, the bill would provide down payment assistance to first-time homebuyers who live in, or were displaced from, historically redlined neighborhoods. All levels of government have played horrific roles in excluding minorities from white neighborhoods and subsidizing wealth-building through home equity for white households alone. The victims of these policies deserve to be compensated for this unfairness. The Justice Department and the Department of Housing and Urban Development have reached a number of settlements with banks that have discriminated against minority borrowers, but the federal government has not offered settlements to the victims of their long history of racist housing policy.

Rather than attempting to increase the number of minority households that can now benefit from unfair government subsidies to homeownership, these subsidies should be repealed entirely, and damages for the victims of housing policy discrimination should not be tied to home buying. The Warren approach offers nothing to households that decide to rent instead of buy.

Lastly, one way that localities could qualify for grants under the Warren bill is by implementing rent stabilization or rent control. These policies benefit the renters who are able to take advantage of them, but they also encourage the conversion of rental housing to owner-occupied housing, and inadvertently reduce the supply of rental units available to lower income households. One study of the effect of rent control on housing in San Francisco found that rent controlled buildings were eight percentage points more likely to be converted from rental buildings to condos relative to similar market-rate rental buildings. Moreover, rent control reduces the pipeline of aging buildings that can profitably be converted to inexpensive rental units. This has historically been the primary source of affordable housing for working Americans.

Rather than creating new policies that support owner-occupied housing, pro-affordability legislation should repeal current subsidies to homeownership. The federal government provides huge subsidies to homeowners through tax policy. Following a substantial reduction to the mortgage interest deduction in the Tax Cuts and Jobs Act, the deduction still costs $37 billion annually. Additionally, investing in an owner-occupied home is privileged relative to other investments because single people can sell their homes with up to $250,000 in untaxed capital gains, or up to $500,000 for married couples. More than 70 percent of mortgages are either issued by the Federal Housing Authority or are insured by a government-sponsored entity, increasing access to mortgage credit relative to what a private market would provide. These privileges encourage people to store their wealth in the homes that they live in, in turn increasing their incentives to protect and inflate their homes’ value, and, perversely, to oppose new development close to where they live.

Economist William Fischel coined the term “homevoters” to refer to homeowners because of their tendency to vote with a single-issue focus for policies that reduce the risk of home prices falling and increase home values in their jurisdiction. Federal incentives that benefit homeowners translate to increased support for land use regulations at the local level that reduce housing supply, prop up home values, and reduce housing affordability for anyone who doesn’t already own.

Additionally, federal policies to support homeownership have an anti-density and anti-urban bias. As economists Ed Glaeser and Jesse Shapiro write, “There are few facts in urban economics as reliable as the fact that people in multi-family units overwhelmingly rent and people in single-family units overwhelmingly own.” As of 2017, only 18 percent of single-family homes are renter-occupied. All multifamily typologies, from duplexes to large multifamily buildings, are majority renter-occupied by wide margins. By focusing on homeownership, Warren diverts market-rate construction from more affordable units to exclusive, detached homes. Warren has made clear she doesn’t want to reduce house price appreciation as a wealth-building tool. Her bill states:

A home is not only a place to live, but also an asset that may appreciate, help fund a new business, finance an education, or cover retirement expenses. A home provides stability and financial predictability, which are important foundations for prosperity and access to opportunity for a family.

However, rising house prices that benefit homeowners come at the expense of renters, who tend to be lower-income and who are more likely to be minorities. A more visionary approach would reconsider the federal government’s role in encouraging policies that intentionally increase the price of homes and consider the negative effects this policy has had on the housing market as a whole.

While the use of federal grants in Warren’s bill may help reduce exclusionary zoning, it’s other provisions would reduce the supply of rental housing. It would expand federal subsidies to homeownership, further entrenching homevoters as a powerful force in favor of exclusionary zoning at the local level. The incentives it creates to increase housing supply are welcome, but overall it would shift federal policy toward homeownership further in the wrong direction.

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Against Spot Text Amendments http://marketurbanism.com/2019/04/08/against-spot-text-amendments/ http://marketurbanism.com/2019/04/08/against-spot-text-amendments/#respond Mon, 08 Apr 2019 14:00:15 +0000 http://marketurbanism.com/?p=10935 As zoning has become more restrictive over time, the need for “safety valve” mechanisms—which give developers flexibility within standard zoning rules—has grown exponentially. U.S. zoning officially has two such regulatory relief mechanisms: variances and special permits. Variances generally provide flexibility on bulk rules (e.g. setbacks, lot sizes) in exceptional cases where following the rules would […]

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As zoning has become more restrictive over time, the need for “safety valve” mechanisms—which give developers flexibility within standard zoning rules—has grown exponentially.

U.S. zoning officially has two such regulatory relief mechanisms: variances and special permits. Variances generally provide flexibility on bulk rules (e.g. setbacks, lot sizes) in exceptional cases where following the rules would entail “undue hardship.” Special permits (also called “conditional use permits”) generally provide flexibility on use rules in cases where otherwise undesirable uses may be appropriate or where their impacts can be mitigated.

A significant grad change in Hudson County, New JerseyAn extreme grade change is one reason why a lot might receive a variance, as enforcing the standard setback rules could make development impossible.

A parking garageParking garages commonly require special use permits, since they can generate large negative externalities if poorly designed. Common conditions for permit approval include landscaping or siting the entrance in a way that minimizes congestion.  (Wikipedia/Steve Morgan)

In addition to these traditional, formal options, there’s a third, informal relief mechanism: spot zoning. This is the practice of changing the zoning map for an individual lot, redistricting it into another existing zone. Spot zonings are typically administered where the present zoning is unreasonable, but the conditions needed for a variance, special permit, or a full neighborhood rezoning aren’t. In many states, spot zonings are technically illegal. The thinking is that they are arbitrary in that they treat similarly situated lots differently. But in practice, many planning offices tolerate them, usually bundling in a few nearby similarly situated lots to avoid legal challenge.

An example of a spot zoning.

Variances, special permits, and spot zonings are generally considered to be the standard outlets for relief from zoning. But there’s a fourth mechanism that, to my knowledge, hasn’t been recognized: let’s call it the “spot text amendment.” Like spot zonings, spot text amendments change the rules for either a specific site or a narrowly targeted set of sites. Unlike spot zonings, which amend the zoning map—which assigns every lot to a zoning district—to the benefit of a specific lot, spot text amendments change the zoning text (also known as the “ordinance” or “code”)—which sets out the regulations for each zoning district—to the benefit of a specific lot or subset of lots.

Since the zoning text is in theory meant to apply fairly to all lots, spot text amendments are often characterized by extreme and unusual qualifiers, such that they practically only apply to a handful of specific lots. Here’s an example:

For context, this is a from a section of the text which says that demolition permits for lots in a particular overlay district will only be administered with a special permit. This line, tacked on at the end of the section, exempts lots with a very specific zoning designation and lot size, built within an unusual 19-year time frame. Do you see what is going on here? The drafters likely had in mind either one specific lot or a handful of lots, which they were trying to exempt from the standard rules; that is to say, it’s a spot text amendment.

Once you know what to look for, you can likely go find multiple spot text amendments in every chapter of your local zoning text. In isolation, any given spot text amendment may make sense. For all I know, this particular demolition permit exception made a lot of sense! But in the aggregate, they form a confusing mess that shares many of the issues of spot zonings and are arguably worse in key ways.

Like spot zonings, spot text amendments undermine the rule of law. What do I mean by that? In theory, zoning is supposed to set out a standard set of rules for similarly situated lots, with a general focus on restricting nuisances. When a spot text amendment, like a spot rezoning, allows ad hoc exceptions to these rules, planners are essentially admitting that these rules are either not universally applicable within the relevant districts or do not produce a nuisance in all cases. This undermines the basis zoning and strips away its major selling point: predictability.

But spot text amendments are arguably worse, inasmuch as they undermine the intelligibility of the zoning text. Say what you will about the aesthetics a messy zoning map; even an egregious spot zoning will not undermine the ability of a local resident or developer to pull up the map and find the applicable zoning district for her lot. The same can’t be said of a spot text amendment. Each spot text amendment makes the text more confusing and inaccessible.

Take the C8-4 example above: when I stumbled upon it, even as a professional planner, it took me a moment to sort out what exactly was going on. Now imagine that you’re a local resident or business owner, for whom zoning is already hard to comprehend. Lard up your zoning text with a few dozen spot text amendment and you practically need a land-use attorney to understand the rules regulating how you can and can’t use your lot, making the text inherently exclusionary. That’s not how the law—to say nothing of planning—should work.

As bad as spot text amendments are, the root problem here is that we expect zoning to do too much. Now more than ever, zoning attempts to regulate the minute detail of urban development, resulting in overly detailed rules that don’t make sense in a host of situations. This forces run-of-the-mill projects to pursue informal regulatory relief, which in turn makes zoning even more obtuse and inaccessible. It’s a vicious cycle that won’t end unless we think seriously about the appropriate role of land-use regulation. In a system of universal rules, narrowly tailored to address clear nuisances, the need for spot text amendments would evaporate.

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Democratic Candidates on Housing http://marketurbanism.com/2019/03/21/10740/ Thu, 21 Mar 2019 12:30:05 +0000 http://marketurbanism.com/?p=10740 Anti poverty programs have been taking center stage as the 2020 Democratic primary heats up. Proposals from Kamala Harris and Corey Booker target high housing costs for renters and make for an interesting set of ideas. These plans, however, have major shortcomings and fail to address the fundamental problem of supply constraints in high cost […]

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Anti poverty programs have been taking center stage as the 2020 Democratic primary heats up. Proposals from Kamala Harris and Corey Booker target high housing costs for renters and make for an interesting set of ideas. These plans, however, have major shortcomings and fail to address the fundamental problem of supply constraints in high cost housing markets. 

Harris and Booker on Housing

Both the Harris and Booker plans call for direct subsidies to renters via the tax code.

  • Harris’ Rent Relief Act (RRA) is a refundable tax credit for renters making $100,000 or less and spending more than 30% of their income on rent.
    • The credit would be worth a percentage of the delta between the recipient’s rent (capped at 150% of area fair market rent) and 30% of their income. Actual benefits would be bigger or smaller depending on the size of the gap.
  • Booker’s Housing, Opportunity, Mobility, and Equity (HOME) Act is also designed as a refundable tax credit for renters paying more than 30% of their income in rent.
    • Unlike Harris’ RRA, there’s no sliding scale for benefits. The credit covers the entire difference between 30% of the recipients income and their rent (also capped by area fair market rent).

Both programs are in the same vein as other democratic anti-poverty proposals which use the tax code to affect transfer payments. The others, though, are expansions of the federal Earned Income Tax Credit (EITC) whereas these two proposals more narrowly target housing.

Devils in the Details

Housing costs are a major impediment to financial stability for many, so it’s good to see reducing them called out as a poverty reduction strategy. And transfer payments (as opposed direct government provisioning or price fixing) make for better social safety nets. However, as Tyler Cowen points out, juicing the demand side of a supply constrained market is a recipe for higher prices. Sending more dollars to chase a static supply of housing won’t solve the underlying problem.

To its credit, Booker’s HOME Act attempts to address supply constraints by adding language to the Housing and Community Development Act of 1974. After a cursory reading of the bill, though, it’s not clear how strong the extra language actually is. Harris’ RRA, as of this writing, has no such provisions.

A Federal Housing Agenda That Isn’t Terrible

If we want to reduce poverty by reducing housing costs, we need to build more housing. To that end, municipal regulations that prevent housing production need to be pared back. State capitals, with their different incentive structures and ability to override local policy, are the best points of leverage for reform.

Residential neighborhood in Harris’ hometown of SF

A pro-housing administration could use federal funds as a way to pressure states to liberalize land use. Funding for state administered versions of the Harris / Booker approach (and/or state level EITC programs) could be made contingent upon preemption of local zoning / permitting processes by state capitals. Direct subsidies would help uplift those at the bottom while land use deregulation would ensure a more supply responsive market overall. 

There some’s question about how far a hypothetical YIMBY presidential administration could interfere in state level prerogatives. My current understanding, though, is that if state governments can get money to do something they want to do anyway, no one will bat an eye (ie no state’s attorney generals will file suite). If the politics could be made to work, federal pressure on states to do the right thing could make for directionally correct federal policy. 

 

*One of the EITC expansion proposals was also authored by Kamala Harris

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10740
Why Is Japanese Zoning More Liberal Than US Zoning? http://marketurbanism.com/2019/03/19/why-is-japanese-zoning-more-liberal-than-us-zoning/ Tue, 19 Mar 2019 12:30:01 +0000 http://marketurbanism.com/?p=10849 Over the past few years, Japanese zoning has become popular among YIMBYs thanks to a classic blog post by Urban kchoze. It’s easy to see why: Japanese zoning is relatively liberal, with few bulk and density controls, limited use segregation, and no regulatory distinction between apartments and single-family homes. Most development in Japan happens “as-of-right,” […]

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Over the past few years, Japanese zoning has become popular among YIMBYs thanks to a classic blog post by Urban kchoze. It’s easy to see why: Japanese zoning is relatively liberal, with few bulk and density controls, limited use segregation, and no regulatory distinction between apartments and single-family homes. Most development in Japan happens “as-of-right,” meaning that securing permits doesn’t require a lengthy review process. Taken as a whole, Japan’s zoning system makes it easy to build walkable, mixed-use neighborhoods, which is why cities like Tokyo are among the most affordable in the developed world.

But praise for Japanese zoning skirts an important meta question: Why did U.S. zoning end up so much more restrictive than Japanese zoning? To frame the puzzle a different way, why did U.S. and Japanese land-use regulation—which both started off quite liberal—diverge so dramatically in terms of restrictiveness?

I will suggest three factors; the first two set out the “why” for restrictive zoning and the third sets out the “how.” Any YIMBY efforts to liberalize cities in the long term must address these three factors. First, the U.S. privileges real estate as an investment where Japan does not, incentivizing voters to prohibit new supply with restrictive zoning. Second, most public services in the U.S. are administered at the local level, driving local residents to use exclusionary zoning to “preserve” public service quality. Third, the U.S. practice of near-total deference to local land-use planning and widespread use of discretionary permitting creates a system in which local special interests can capture zoning regulation and remake it around their interests.

At the outset, why might Americans voters demand stricter zoning than their Japanese counterparts? One possibility is that they are trying to preserve the value of their only meaningful asset: their home. In the U.S., we use housing as a kind of de facto social safety net. Through a mixture of interest deductions, capital gains and property tax exemptions, and subsidized mortgages, current housing policy in the U.S. does everything it can to nudge every American into plowing their life’s savings into a home. Over time, the thinking goes, homes will accrue in value and homeowners will build “wealth.”

In reality, even with all these subsidies, a home is a poor investment: it’s highly illiquid, and if a region isn’t growing or if a lot of new housing being built, any meager housing appreciation will be wiped out by maintenance costs and taxes. To overcome this issue, U.S. municipalities systematically restrict the construction of new housing, creating artificial housing scarcity which drives up the values of existing homes. For more on this hypothesis, check out The Homevoter Hypothesis by William Fischel.

The situation in Japan is almost the exact opposite. Homes have little resale value in Japan. By one estimate, the average Japanese home fully depreciates after 22 years. There’s surely a cultural element, but most observers agree that the island’s frequent earthquakes play a big role: with structural damage so frequent and safety standards constantly improving, nobody wants to live in an old home. The result is that the resale  value of a home is really only in its land value, so Japanese savers have little to no reason to “invest” in a house, treating shelter like a consumption good.

This system has two downstream effects on land-use regulation: On the one hand, the average Japanese household simply has no reason to perpetuate housing scarcity, like their American counterpart. On the other hand, the average Japanese household has a vested interest in keeping land-use regulation light, insomuch as they see themselves as potential future developers in the event of a move. Would it be better if Americans, like the Japanese, demolished most homes after 30 years? I’m not so sure. But it would be wise to stop subsidizing excessive investments in housing, which would encourage smarter investment behavior and reduce demand for restrictive land-use regulations.

Another reason why Americans might support more restrictive zoning than the Japanese has to do with the peculiar way that we provide public services. Here in the U.S., the quality of essential services like parks, education, and public safety can vary dramatically municipality to municipality. A larger population of low-income households means higher public outlays, higher taxes on middle- and upper-income earners, and lower quality public services.

Residents respond by self-selecting into the most affluent communities they can afford and pulling up the ladder once they’re in. To put it another way, to ensure access to quality schools and open space, American households are encouraged to move out to a suburb and employ land-use regulations to keep out anyone poorer than themselves. This partly explains the extreme racial and economic segregation see in most U.S. cities today; for more on this, see The Color of Law by Richard Rothstein.

Japan avoids these pressures both by standardizing local public service provision and by enforcing strict economic and racial homogeneity through a mixture of high marginal tax rates and xenophobic immigration policy. The desirability of the latter two policies is highly suspect, but the decoupling of public service quality from local municipal boundaries is a no brainer. Insomuch as U.S. policymakers can expand policies like school choice and city-county consolidation, they minimize the need for local voters to try and exclude outsiders from moving into high opportunity areas.

We now know why a certain segment American voters might prefer restrictive land-use regulations. But how do they enforce these preferences against the apparent needs of the country as a whole? In the U.S., our 89,000 municipal governments are entitled to develop their own unique  system of land-use regulation, with little to no oversight from the courts, state governments, or federal regulators. The result is that zoning restrictiveness rises to the preference of local special interests like homeowners, which in small, homogenous, middle- and upper-income suburbs can be quite restrictive. This severely limits new development in most suburbs, with ugly elements of racism and classism typically mixed in.

In cities, the mechanism of enforcing these restrictive preferences is slightly different. More so than in suburbs, many U.S. cities force every development proposal to go through a long and costly discretionary review process. This is often done by making land-use regulations so restrictive that any development must pursue a discretionary action like a rezoning or a special permit. In practice, this submits all proposed development to months of negotiating and public review, in which locals can shout a project down to their preferred size (which is often a vacant lot) or extract large concessions from the developer.

Japan bypasses these problems completely through a large national role in land-use planning and an as-of-right system of development. On the first score, the national government sets out 12 zones, which are clear, liberal, and generally focused on actual nuisances. This places a lower bound on how strict a local land-use regulation can be, with even the most strict zone allowing for multifamily, home-based businesses, and small local retailers. This national zoning system takes away the power of local municipalities to develop complicated and exclusionary local land-use regulations.

On the second score, Japan combines these liberal use and design guidelines with an “as-of-right” system of permitting, meaning that if a project complies with the zoning, it doesn’t need to go through a discretionary review process. In this sense, Japanese zoning gets close to proper planning: policymakers consider upfront what type of development they would like to permit and where, and when developers come up with a conforming proposal, they hand over the needed permits. This provides developers and local residents with a high degree of certainty about what can and cannot be built.

So what exactly should we learn from Japanese zoning? At a superficial level, we might take away that Japan shows that a liberal zoning regime is workable and highly desirable. YIMBYs can and should go out and work on liberalizing our local zoning code in the near term. But at a deeper level, YIMBYs should learn that making their mounting victories sustainable in the long term means taking on the policies and institutions that built our system of exclusionary zoning in the first place.

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A great new paper on how government fights walking http://marketurbanism.com/2019/03/07/a-great-new-paper-on-how-government-fights-walking/ Thu, 07 Mar 2019 15:14:13 +0000 http://marketurbanism.com/?p=10808 Many readers of this blog know that government subsidizes driving- not just through road spending, but also through land use regulations that make walking and transit use inconvenient and dangerous.  Gregory Shill, a professor at the University of Iowa College of Law, has written an excellent new paper that goes even further. Of course, Shill […]

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Many readers of this blog know that government subsidizes driving- not just through road spending, but also through land use regulations that make walking and transit use inconvenient and dangerous.  Gregory Shill, a professor at the University of Iowa College of Law, has written an excellent new paper that goes even further.

Of course, Shill discusses anti-pedestrian regulations such as density limits and minimum parking requirements.  But he also discusses government practices that make automobile use far more dangerous and polluting than it has to be.  For example, environmental regulations focus on tailpipe emissions, but ignore environmental harm caused by roadbuilding and the automobile manufacturing process.  Vehicle safety regulations make cars safer, but American crashworthiness regulations do not consider the safety of pedestrians in automobile/pedestrian crashes.   Speeding laws allow very high speeds and are rarely enforced.

If you don’t want to read the 100-page article, a more detailed discussion is at Streetsblog.

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Market Urbanism MUsings March 1, 2019 http://marketurbanism.com/2019/03/01/market-urbanism-musings-march-1-2019/ Fri, 01 Mar 2019 19:36:54 +0000 http://marketurbanism.com/?p=10719 1. Recently at Market Urbanism Any Green New Deal Must Tackle Zoning Reform by Nolan Gray According to the Environmental Protection Agency (EPA), transportation and electricity account for more than half of the US’ greenhouse gas emissions. As David Owen points out in his book “Green Metropolis,” city dwellers drive less, consume less electricity, and throw out […]

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A viaduct for the California High-Speed Rail Project

1. Recently at Market Urbanism

Any Green New Deal Must Tackle Zoning Reform by Nolan Gray

According to the Environmental Protection Agency (EPA), transportation and electricity account for more than half of the US’ greenhouse gas emissions. As David Owen points out in his book “Green Metropolis,” city dwellers drive less, consume less electricity, and throw out less trash than their rural and suburban peers. This means that if proponents of the Green New Deal are serious about reducing carbon emissions, they will have to help more people move to cities.

New York State’s Property Tax Cap by Michael Lewyn

New York’s Gov. Cuomo has recently proposed a tax cut that buys popularity for state lawmakers on the backs of municipalities.  In 2011, the state passed a law to limit local governments’ property tax increases to 2 percent or the rate of inflation, whichever is lower.  This cap was originally temporary, but Cuomo now proposes to make it permanent.

What Should YIMBY’s Learn from 2018? by Nolan Gray

Believe it or not, the YIMBY movement won a lot in 2018. And rolling into 2019, elected officials at every level of California government—from the state’s new Democratic governor to San Diego’s Republican mayor—are singing from the YIMBY hymn sheet. All in all, it wasn’t a bad year for a movement that’s only five years old. But what really made 2018 such an unexpected success for YIMBYs?

Yimbyism: the Evolution of an Idea by Jeff Fong

Five years ago everything in California felt like a giant (land use policy) dumpster fire. Fast forward to today we live in a completely different world. Yimby activists have pushed policy, swayed elections, and dramatically shifted the overton window on California housing policy. And through this process of pushing change, Yimbyism itself has evolved as well.

Evidence that home-sharing doesn’t raise rents by Michael Lewyn

A common argument against Airbnb and similar home-sharing companies is that they raise rents, because every apartment used for short-term rentals could be used for long-term rentals. A recent paper by a Spanish Ph.D. candidate suggests otherwise.

Big Media Gets Big Buildings Wrong by Michael Lewyn

After googling “one in four paris apartments vacant” I found an article claiming that 26 percent of apartments in four Paris arrondissements (neighborhoods) is vacant- a much narrower claim, comparable to an assertion that one in four midtown Manhattan apartments is vacant. One would think that a journalist as distinguished as Johnston would know the difference between “Paris” and “some parts of Paris.”

2. Also by Market Urbanists

Nolan Gray and Brandon Fuller at Citylab, “A Red-State Take on a YIMBY Housing Bill

Nolan Gray and Lyman Stone at Citylab, “How ‘Vasectomy Zoning’ Makes Childless Cities

Emily Hamilton at Mercatus, “Cities and States to Watch in 2019

Vote for both Emily and Nolan in the Neoliberal brackets on twitter:

Vote for Emily

Vote for Nolan

3. At the Market Urbanism Facebook Group

Roger Valdez at Forbes: Imagine No Housing Prices, Only Data: The United States Of Amazon

Michael Strong shares: An intelligent and informed paper explaining why Singapore’s approach to planning has been successful.

Jay  Carlson says: Prop 13 is the Brexit of property tax policy.

Anthony Ling asks: What are your thoughts in Ricard Florida’s petition against Amazon HQ2’s “auction”?

Michael Hewitt Wilson shares: Zoning Laws Cause Poverty

Via Joe Wolf: No, Zoning Reform Isn’t Magic. But It’s Crucial.

Via Randy Shaw: SF’S Moment of Truth on Housing

Via Brendon Harre: Japanese urbanism and its application to the Anglo-World

Via Christopher Stefan: Why Are Developers Only Building Luxury Housing?

Via Randy Shaw: Newson’s 2004 Housing Vision Finally Popular

Via Chris Bergren: The Wretched Climate-Killing Truth about American Sprawl

Via Sean Lawrence: New ‘trackless train’ which runs on virtual rail lines launched in China

Via Stephen Rowe: Stephenville mayor evicted from off-the-grid home after council vote

Via Tom W. Bell: The Behavioral Sink

Via Joe Wolf: Amazon threatens Philadelphia over plan to ban cashless stores

Via Joe Wolf: Amazon signals slowdown of Seattle growth as it gives up on New York

Via Michael Burns: Housing Shortages Are Self-Made, Unnecessary

Via Joe Wolf: I’m Really Upset About Losing Amazon’s HQ2

Via Randy Shaw: Blue Cities Should Enact Local Green New Deals

Via Donald Shoup: Free Parking:Is it the Secret Ingredient in NYC’s Traffic Problem?

Via Matt Robare: Supreme Court limits power of states and localities to impose fines, seize property

Via Joe Wolf: Even AARP endorses Sen. Wiener’s pro-housing bill

Via Joe Wolf: What if the problem of poverty is that it’s profitable to other people?

Via Nevram Norman: Could a car-free, Dutch-style city work in Colorado?

3. Stephen Smith’s hottest tweet:

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