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Category Zoning

Randal O’Toole: “If you didn’t have those suburban restrictions, you wouldn’t have that pressure for density in DC”

Earlier today I posted the video of the Cato discussion on housing with Randal O’Toole, Ryan Avent, Adam Gordon, and Matt Yglesias, but I wanted to transcribe one segment towards the end. (Like I said, it’s hard to skip to the end of the streaming video because you can’t scroll beyond what’s already been downloaded.). For the last question, someone from the audience says he’s a fan of Randal’s who lives in DC, and asks Randal, and the rest of the panelists, what they about the recent calls to lift the city’s height limit in response to development pressures. Randal responds first: Well this is where I think the policy questions [and the difference between Randal and the other panelists] come in on density. I think we ‘ve got Maryland, which has all these restrictions on supposedly protecting agricultural land, we have Loudoun County and other counties in Virginia that have zoned most of their land for 20-acre large lot sizes, those have restricted the ability of people to live in single-family, to build new single-family homes in the Washington, DC, metropolitan area. And so it’s created a pressure for more density in Washington, DC, but if you didn’t have those suburban restrictions, you wouldn’t have that pressure for density in Washington, DC. So I’d say, let’s get rid of the suburban restrictions, and then see if there really is a demand for high-density high-rise in Washington. If there really was a demand, there’s a lot of three-story buildings that could be redeveloped to be six and seven stories if you wanted to. Matt: “You’re not allowed to!” Ryan: “You should try to do that – if you can make it happen, then that would be a great profit opportunity.” Randal: “Well, I’ve seen streets of row houses here [in DC] […]

Market Urbanism vs. Market Suburbanism smackdown at Cato: “The Death and Life of Affordable Housing”

The debate you’ve been waiting for! Randal O’Toole, Matt Yglesias, Ryan Avent, and Adam Gordon participated yesterday in a discussion at the Cato Institute moderated by Diana Lind from Next American City/Forefront. (How had this never happened before??) Randal O’Toole did not disappoint, arriving in top form in his shoestring necktie and armed with a surprisingly interesting Powerpoint, but I think New Jersey-based attorney Adam Gordon stole the show with his discussion of inclusionary zoning and the Mt. Laurel doctrine (probably because he was on the only one on stage who hasn’t already spewed hundreds of thousands of words on the subject). You can download the 90-minute discussion as an MP3 from Cato (much easier to scroll through), or watch the video streaming:

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 […]

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 […]

Height Limit Links

1) Yesterday, two pieces on Congressman Darrell Issa’s proposal to relax the federal limits on DC’s buildings heights got a lot of coverage. At City Block, Alex Block makes the key point that outside of downtown, DC’s density is limited by zoning, rather than the height limit. He supports allowing more multifamily housing by, for example, dividing row houses into apartments. He also makes the point that taller buildings can actually add to the vistas that height limit proponents are so concerned about. I think this is particularly true on the 14th Street Corridor, Connecticut Ave, and New Hampshire Ave. 2) On the other hand, Harry Jaffe at the Washington Examiner denies the laws of supply and demand, claiming that increasing allowable height could not possibly lower rents. He writes of the limit, “It has forced development out of downtown and into the neighborhoods, around Metro stops, which is healthy growth: out, not up.” The most troubling part of his piece is that he suggests developers’ use of the profit incentive is “about greed, period,” ignoring the mutual benefits that increased density in the city would permit. 3) Will Doig interviewed me for a piece on historic preservation at Salon. He concludes, “Landmarking is meant to preserve structures whose loss would be an affront to history. Removing entire neighborhoods from the natural evolution of cities is another thing entirely.” 4) Matt Yglesias observes that in Tom Vanderbilt’s series about pedestrianism, most of the cities with the highest Walk Scores are liberal. I think Matt rightly concludes that this correlation is primarily driven by older, more walkable cities being coastal, where more liberal people tend to live. However, this also ties in to a question Charlie Gardner raised a while back with regard to proposed changes to the zoning process in Tennessee and Arizona: Oddly, the idea of selectively or fully repealing zoning  – […]

Mandating attractive urban design

The most recent installment of the American Enterprise Institute’s series Society and Culture Outlook features a piece about the role of urban design in how people use cities. The article “A plea for beauty: a manifesto for a new urbanism” by Roger Scruton is a deviation from AEI’s typically conservative view toward central planning. Scruton favors heavy-handed planning of the appearance of the built environment, essentially advocating for strict form-based zoning codes: Many suggestions have been made as to how an attraction to the center might be generated. Building downtown convention centers, expensive museums, and concert halls; offering tax credits for city-center businesses; creating enterprise zones; and removing some of the regulations that make living, moving, and trading downtown so difficult have all been tried, and none has worked. And the reason they do not work is because they are addressing symptoms instead of causes. People flee from city centers because they do not like city centers. And they do not like city centers because they are alienating, ugly, and without a human face. Or rather, they do not like city centers when they are alienating, ugly, and inhuman, the normal case in America. [. . .] The proof of this is easy to find in the old cities of Europe. People choose to live in the center of Paris, Rome, Prague, or London rather than the periphery. Others who do not live in those cities want to spend their vacations there to enjoy the culture, entertainment, and beauty of their surroundings. These are flourishing cities, in which people of every class and occupation live side by side in mutual dependency while maintaining the distance that is one of the great gifts of the urban way of life. And there is a simple explanation for this: People wish to live […]

The Tyranny of Zoning: Exhibit A

The Washington Post reports that the redevelopment of the Giant grocery store at Wisconsin Ave and Idaho Ave will finally be getting underway. Through the sick humors of the real estate gods, I live pretty close the this grocery store and can attest that it is an eyesore in bad need of a renovation: It is one of the most belabored Washington development projects in recent memory, but on April 12 the Giant grocery store at 3336 Wisconsin Ave. NW will finally close, making way for construction of a $125 million housing-and-retail project that will feature a much bigger new store. Giant began discussing plans to replace the out-of-date, 18,500-square-foot Giant almost a decade ago, but questions about what the company ought to build in its place grew to monstrous proportions in the Cleveland Park neighborhood. Eventually, the debate reached the point that some neighbors on opposing sides of the issue ceased speaking to one another. Last week I attended one of the Urban Land Institute’s Real Estate 101 courses about this project and learned about this project from the land use attorney’s perspective.  Phil Feola with Goulston & Storrs shared the story of the entitlement process for this project, going back to the first ANC meeting in 2005. Part of the property that Giant wanted to develop as retail is zoned residential, so rather than attempting to amend the code, they sought approval of a Planned Unit Development. Typically a PUD is easier to achieve than blanket upzoning for a parcel because with a PUD both city planning and the project’s neighbors know what they will be getting with the redevelopment. The neighbors initially requested 32 changes to the PUD, and after making some adjustments, Giant’s proposal received near-unanimous support from both the Zoning Commission and the National Capital Development Commission.   […]

A hole in the literature?

In the comments of a previous post, readers discussed the incentives facing different types of landowners whose properties are facing potential upzoning, demonstrating just how complicated the relationship between land use regulations and property values is. As I see it, theory tells us that upzoning will increase the value of much of the land that will be redeveloped by opening up options for the developer to put the land to a higher valued use. However, land that is not economically viable for redevelopment and perhaps some land near this margin would fall in value due to the increased supply permitted. The example from the earlier post was a proposal for upzoning in Hollywood. I would think that plenty of properties there would be ripe for redevelopment, as single family zoning is constricting supply to well below the market clearing level. If this is true, many homeowners would stand to receive a windfall with upzoning. I’m not very familiar with Los Angeles, but I’d think it likely that owners on the periphery of the area to be upzoned could potentially lose money, as the supply of housing would increase in the most desirable parts of Hollywood, devaluing homes in the less desirable areas. In the comments, awp provided clear analysis of what’s going on in this situation: The excess “rent” comes from having a part of a limited SUPPLY. Any one individual would be able to increase their portion of the “rent” by being the only one allowed to increase their supply, while lowering the total “rent” through the increase in SUPPLY.  If the zoning is removed there will be no remaining excess “rent”.  It would take some serious analysis that I have never seen to figure who would benefit the by moving from a zoning regime to a free market regime. […]

“Upzoning means up yours!” Links

1. The title quote comes from this gem of an LA Weekly article about proposed changes to Hollywood’s zoning code which would allow for taller buildings and denser development. According to the Weekly, “For decades, zoning that governs height and size has preserved thousands of affordable, low-slung, older apartments, bungalows and commercial buildings in Hollywood.” The words “preserve” and “affordable” rarely belong in the same sentence. 2. Once again in New York upzoning is linked with affordable housing. Expanding student housing at NYU also depends on the university providing land and potentially a building for a public school. 3. In San Francisco, an activist is working with developers to achieve upzoning approval for waterfront property. Despite the positive upzoning, on the surface this deal wreaks of crony capitalism. But the real kicker comes from the proposed funding: First up, the plan to build a high-rise residential tower near the waterfront at 8 Washington St. with funding from the state teachers’ retirement fund. The plan is being backed by Pak’s business allies, developer Simon Snellgrove and lobbyist Marcia Smolens. The project spokesman is P.J. Johnston, former spokesman for Brown. Approval of the deal could yield millions of dollars in affordable-housing money to help fund one of Pak’s pet projects, a $32 million apartment complex being built on Stockton Street by the nonprofit Chinatown Community Development Center. In my job I do a lot of work with pension reform, and this project would be an egregious abuse of CalSTRS, one of the most underfunded public pension plans in the country. Public pension funds should be managed to minimize risks for retirees, employees, and taxpayers, not to provide kickbacks to business interests. 4. Last note on special interests in upzoning: At least some property owners must hope to sell in the future rather than hold on to their […]

The Coase Theorem in Land Use

On a recent post about property rights in the land market, commenter David Sucher brought up the issue of transaction costs. He commented here and at his blog City Comforts: The “least intrusive means” should be always kept in mind. The only issue for me is the huge transaction costs which, I believe, make private agreements for land use quite impossible. The very reason we have government is because “voluntary private contracts” are too complex. We got rid of tort law (as to land use) because it was much easier to have uniform area-wide regulations. While David brings up very valid points, I think that economist Ronald Coase offered a persuasive argument against these area-wide regulations. The Coase Theorem, which interestingly, I don’t think we’ve written about in depth here, addresses this issue of transaction costs. In 1960, Coase published his most famous paper, “The Problem of Social Cost,” exploring a common problem for city dwellers: annoyance at their neighbors’ behavior. Coase uses as an example a confectioner whose business is adjacent to a doctors office. The confectioner uses loud machinery which causes vibrations next door and bothers the doctor. We can imagine a variety of solutions to this problem: the doctor could sound proof his office, the confectioner could upgrade to quieter machinery, one of them could move his business, the confectioner could compensate the doctor for the bother, or the doctor could pay the confectioner to stop making noise during his business hours. Assigning property rights would help any of these solutions emerge; if the confectioner has a right to make noise, the responsibility lies with the doctor to remedy the situation (or learn to live with the noise) or the reverse if the doctor has a right to quiet. In a standard Micro 101 class, in my experience, the […]

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