The Status of Smart Growth Regulation

Debates over land use policy often devolve into opponents arguing over how to interpret the same set of facts. For example, “market suburbanists” argue that because apartments in walkable neighborhoods tend to cost more per square foot than suburban single family homes, high densities make coastal cities expensive. Smart Growth advocates may look at the same data and argue that zoning rules that restrict the supply of high-density housing in desirable locations is what makes housing expensive.

In order to provide clarity to the debate on land use regulations, Mike Lewyn and Kip Jackson survey the zoning codes of the 24 cities with populations between 500,000 and 1,000,000 residents. In their new Mercatus Center study, they find that while some cities have in fact enacted the sorts of policies that market suburbanists fear — minimum density requirements and maximum parking rules — these regulations remain very rare relative to near-ubiquitous maximum density rules and minimum parking requirements.

Lewyn and Jackson list the mid-size cities that have adopted various types of Smart Growth regulations below. While a handful of cities have adopted the types of regulations they surveyed, every U.S. city in this sample has a maze of traditional zoning rules.

A perpetual challenge in studying the effects of both traditional and Smart Growth regulations is finding data. Municipal codes are all housed on unique websites with varying degrees of accessibility. The difficulty of achieving clear answers as to what causes high housing prices contributes to advocates of traditional zoning and Smart Growth to shout past one another.

While Smart Growth as a whole is maligned by some advocates of the free market, many Smart Growth tenets are actually deregulatory. Policy changes including upzoning, reducing parking requirements, and permitting mixed-use development are all steps toward laissez-faire land use relative to the status-quo, even though these policies are sometimes criticized by those who claim to support free markets. A clear analysis of whether and how cities are implementing Smart Growth allows us to evaluate whether Smart Growth as a whole is a step toward or away from the free market.

Lewyn and Jackson’s study shows that rather than embracing the deregulatory tenets of Smart Growth, regulators in some cities have layered Smart Growth rules on top of their traditional zoning rules, creating a complicated web of regulations. They explain:

Fort Worth imposes a variety of minimum parking requirements, adding simply that the “maximum number of parking spaces shall not exceed 125% of the minimum parking requirement.” For example, the city requires one parking space per bedroom for multifamily housing, which means the maximum parking requirement is 1.25 spaces per bedroom. Because the difference between Fort Worth’s minimum and maximum parking requirements is so small, it appears that almost all parking that is not prohibited is compulsory.

The authors show that while many Smart Growth objectives of such as permitting higher density, mixed-use neighborhoods could be achieved with deregulation, urban planners have instead chosen in some cases to replace traditional zoning rules with Smart Growth rules, in some cases requiring development that would have been prohibited under the traditional zoning regime. As Stephen has pointed out previously, some cities have gone from parking minimums directly to parking maximums without giving the market outcome a chance.

By assessing the legal environment in this sample of cities, Lewyn and Jackson have set the stage for empirical work on how Smart Growth rules are affecting prices. This empirical work is badly needed. Understanding the costs of both these new rules and traditional zoning rules is crucial for evaluating these policies, and these costs cannot be estimated without a clear understanding of which rules cities are putting on the books. This paper demonstrates that today Smart Growth policies are unusual relative to traditional zoning rules that restrict density. However Smart Growth is in some cases complicating the policy landscape rather than providing more freedom for developers to respond to consumer demand.