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Category Zoning

Why Do We Hate Developers?

Construction project

Earlier this year, researchers Paavo Monkkonen and Michael Manville at the University of California Los Angeles (UCLA) conducted a survey of 1,300 residents of Los Angeles County to understand the motives behind NIMBYism. As part of the study, they presented respondents with three common anti-development arguments, including the risk of traffic congestion, changes to neighborhood character, and the strain on public services that new developments may bring. But according to their findings, the single most powerful argument motivating opposition to new development was the idea that a developer would make a profit off of the project. At first blush, this finding might seem kind of obvious. People really don’t like developers. As Mark Hogan observed last year on Citylab, classic films from “It’s a Wonderful Life” to “The Goonies” depict developers as money-grubbing villains. But, when you think about it, it’s pretty weird that this is the case. In what other contexts do we actively dislike people who provide essential services, even if they happen to turn a profit? I don’t begrudge the owner of the corner grocery every time I buy a loaf of bread or a gallon of milk, and I hope you don’t either. In fact, most of us are probably happy that folks like doctors and dentists earn a lot for what they do. So why are developers, who provide shelter, any different? One possibility is that developers are often, for lack of a better term, assholes. This is surely the case with at least some developers. Our president is arguably America’s most famous developer, even if he isn’t exactly the master builder he played on television. And President Trump’s defining characteristic in his “Celebrity Apprentice” role—and evidently in real life—is that he is a bit of an asshole. But it isn’t just him. Most cities have […]

New Video: How Zoning Laws Are Holding Back America’s Cities

It’s an understatement to say that zoning is a dry subject. But in a new video for the Institute for Humane Studies, Josh Oldham and Professor Sanford Ikeda (a regular contributor to this blog) manage to breath new life into this subject, accessibly explaining how zoning has transformed America’s cities. From housing affordability to mobility to economic and racial segregation to the Jacobs-Moses battle, they hit all the key notes in this succinct new video. If you need a go-to explainer video for the curious new urbanists, this is the one. Enjoy!

Light and Air, Sound and Fury; or, Was the Equitable Life Building Panic Only About Shadows?

Equitable Life Building from the street. It's imposing!

When I first became interested in urban planning, I believed a piece of professional mythology that went like this: “For all its faults, Euclidean zoning was a well-meaning effort to expand nuisance regulation in the face of the urban industrialization. It was later practitioners who used zoning for selfish and exclusionary purposes.”  While not totally without basis, I now think this view is wrong. Today I would like to show how the iconic example of a nuisance that supposedly motivated Euclidean zoning—the Equitable Life Building in New York City—was in large part controversial because it threatened the interests of existing landlords. The Equitable Life Building at 120 Broadway was completed in 1915. A vanity project of an industrialist—Thomas Coleman duPont—as so many skyscrapers were and are, the projected stood 42-stories high across an entire block without setbacks, adding a startling one and a quarter million square feet of rentable office space to Lower Manhattan. Needless to say, some New Yorkers weren’t happy. But why? The conventional wisdom holds that the Equitable Life Building caused such a stir because it literally cast a shadow over the rest of the neighborhood. Indeed, the building cast a shadow stretching nearly a fifth of a mile across Broadway. But it wasn’t just the shadows that made the Equitable Life Building so uniquely audacious—after all, it wasn’t the tallest building in the neighborhood (this honor would go to the Woolworth Building, completed four years earlier 1912) and it wasn’t the first skyscraper to take up an entire city block without setbacks (by this point, the Flatiron Building was already an icon of the city). Rather, what made the project especially upsetting, on top of standard concerns about light and air, was that it was adding so much floor space at a time when the Lower […]

California Legislation Threatens to Become Law and Build More Housing

BART train at the platform

On August 23rd, a California assembly bill aimed at increasing transit-oriented development, like housing, was passed by the state senate, confirmed by the assembly, and headed to Governor Jerry Brown’s desk for signing. The bill, AB 2923, specifically targets the San Francisco Bay Area—making it easier than ever for the Bay Area Rapid Transit (BART) to build housing on the land it owns around its transit stations. Previously, housing developments on BART-owned land were still subject to local zoning rules, pushing projects through local processes to be approved before building began. This local control led to many delays, and, as a result, housing denials in the midst of an ongoing housing shortage—on that repeatedly spurs news headlines decrying four-plus hour super commutes, median home prices over $1 million, and neighborhoods blocking affordable housing. State bills like AB 2923 are a response to these reports, as well as the local control that led to them. If passed, AB 2923 and other bills like it, will bypass local control’s draconian rules to allow more housing to be built and ease the housing shortage. Under current law, land owned by BART is often subject to discretionary review in Bay Area cities. This forces BART to become de facto experts in every municipality zoning code, an impossible task that would take away from their focus on improving their transit system. Even attempting to master the zoning codes of every municipality takes time. Ultimately, this causes delays in building housing that’s so sorely needed. But this could easily be avoided if BART could establish their own zoning rules under AB 2923. Housing and transit is intrinsically linked and, just like suburban home developers build the roads to best suit their development, urban transit authorities like BART must utilize their capacity to build the homes best […]

Two cheers for subsidized housing

A pure libertarian might argue that in an ideal world, there’d be no need for government-subsidized housing for low- and moderate-income households.  Nevertheless, it seems to me that in the world we actually live in, even people generally opposed to the welfare state should favor more such housing.  This is so for several reasons. First, government raises the cost of housing through a wide variety of regulations- some justified (e.g. building codes necessary for safety), some not-so-justified (e.g. exclusionary zoning).   These regulations, by raising the cost of housing, effectively take money from all households.  And because these restrictions aren’t based on ability to pay, they are especially painful for low-income households.  Public housing and similar programs, rather than being a subsidy to the undeserving poor, are merely compensation for this act of plunder. Second, even if the United States abolished zoning tomorrow, it might take decades for housing supply to increase enough to bring rents down.  So in the interim, lower-income households would still be suffering from the effects of zoning, and would deserve compensation just as much as they do under the status quo. Third, even if the United States abolished zoning and similar restrictions tomorrow, public health and safety might support certain restrictions that nevertheless increase the cost of housing- for example, some basic safety protections in building codes.  It seems to me that as a matter of justice, government should not be forcing people into homelessness,  so government should subsidize housing in order to make up for the costs imposed by even the most legitimate regulations. Finally, even if there were no housing-related regulations at all, the cost of land would create a floor under housing costs, which means some people would be homeless without government support.   So if homelessness creates harmful social externalities of any kind, […]

How Much Should We Blame Planners for Sprawl?

Broadacre City, Frank Lloyd Wright's sprawling vision

How much should we blame planning for the degree to which cities sprawl? As much time as we (justifiably) spend here on this blog explaining how conventional U.S. planning drives excessive sprawl, it’s worth periodically remembering that, at the end of the day, the actual extent of the horizontal expansion of cities is largely outside the control of urban planning. Consider Houston. Whenever I say anything nice about Houston’s relatively liberal approach to land-use regulation, someone invariably comments some variation of the following: “Yes, that’s all well and good in theory. But in practice, heavily regulated cities like Boston are far more urban and walkable, so maybe relaxed land-use regulations aren’t so great.” Indeed, most of Houston is classic sprawl. But this begs the question: to what extent can urban planning policy be blamed for sprawl? The urban economist Jan Brueckner, drawing on an extensive literature, distinguishes between the “fundamental forces” that naturally drive urban growth outward and the market failures that push this growth beyond what might occur in an appropriately regulated market. (For the purposes of this post, I’ll be using “sprawl” and “horizontal urban expansion” interchangeably. In the same paper, Brueckner thoughtfully distinguishes the two.) The latter, urban planners can address. The former, not so much. Let’s look first at the “fundamental” variables that planners have little to no control over. Brueckner identifies three: population growth, rising income, and falling commuting costs. The first variable is obvious: as cities grow, demand for all housing goes up, and some of that housing goes out on the periphery regardless of planning policy. Metropolises like Houston, Dallas, and Atlanta are currently experiencing 2% population growth every year, meaning they are on track to double in population in the next 35 years. You would expect a lot of horizontal expansion, all else […]

Morton’s Fork and land use issues

I recently discovered a new logical fallacy: the “Morton’s Fork” fallacy.  This argument is one in which contradictory observations lead to the same conclusion.  For example, if I argue that new housing near public transit is bad because it (1) spurs gentrification by bringing rich people into the neighborhood and (2) increases crime by bringing poor people into the neighborhood, I am engaging in this fallacy.  Similarly, I have heard arguments that new housing is bad because it (1) brings down property values and (2) increases property values. In such situations, it is sometimes possible that one of the two claims could be true, but it is unlikely that both claims could be true.

The Case for Subsidizing Deed Restrictions

Houston skyline

In most of my discussions of Houston here on the blog, I have always been quick to hedge that the city still subsidizes a system of quasi-private deed restrictions that control land use and that this is a bad thing. After reading Bernard Siegan’s sleeper market urbanist classic, “Land Use Without Zoning,” I am less sure of this position. Toward this end, I’d like to argue a somewhat contrarian case: subsidizing private deed restrictions, as is the case in Houston, is a good idea insomuch as it defrays resident demand for more restrictive citywide land-use controls. For those of you who haven’t read my last four or five wonky blog posts on land-use regulations in Houston (what else could you possibly be doing?), here is a quick refresher. Houston doesn’t have conventional Euclidean zoning. Residents voted it down three times. However, Houston does have standard subdivision and setback controls, which serve to reduce densities. The city also enforces high minimum parking requirements outside of downtown. On top of these standard land-use regulations, the city heavily relies on private deed restrictions. Also known as restrictive covenants, these are essentially legal agreements among neighbors about how they can and cannot use their property, often set up by a developer and signed onto as a condition for buying a home in a particular neighborhood. In most cities, deed restrictions cover superfluous lifestyle preferences not already covered by zoning, including lawn maintenance and permitted architectural styles. In Houston, however, these perform most of the functions normally covered by zoning, regulating issues such as permissible land uses, minimum lot sizes, and densities. Houston’s deed restrictions are also different in that they are heavily subsidized by the city. In most cities, deed restrictions are overseen and enforced by parties to a deed, typically organized as a […]

Are Houston’s Deed Restrictions “Basically Zoning”?

Houston Neighborhood

Houston doesn’t have zoning. As I have written about previously here on the blog, this doesn’t mean nearly as much as you would think. Sure, Houston’s municipal government doesn’t segregate uses or expressly regulate densities. But as my Market Urbanism colleague Michael Lewyn has documented, city officials do regulate lot sizes, setbacks, and parking requirements. They also enforce private deed restrictions, which blanket many of the city’s residential neighborhoods. A deed restriction is a legal agreement among neighbors about how they can and cannot use their property. In most cities, deed restrictions are purely private and often fairly marginal, adding rules on top of zoning that property owners must follow. But in Houston, deed restrictions do most of the heavy lifting typically covered by zoning, including delineating permissible uses and design standards. Whenever I point out that Houston has relatively light land-use regulations (and is enjoying the benefits), folks often respond that the city’s deed restrictions are basically zoning. This couldn’t be further from the truth. Before I turn to the essential differences, it’s worth first observing how Houston’s deed restrictions are like any other city’s zoning. First, like zoning, Houston’s deed restrictions are almost universally designed to prop up the values of single-family houses. Despite the weak evidence for a use segregation-property values connection, this justification for zoning goes back to the program’s roots in the 1920s. Many of Houston’s nicest residential neighborhoods, like River Oaks and Tanglewood, follow this line of thinking, enforcing tight deed restrictions on residents that come out looking a lot like zoned neighborhoods in nearby municipalities like Bellaire and Jersey Village. Second, both zoning and Houston’s deed restrictions are enforced by government officials at taxpayer expense. In most other cities, deed restrictions are overseen and enforced by a private group like a homeowners association, […]

Density Is How the Working Poor Outbid the Rich for Urban Land

multifamily housing

The great failing of modern land-use regulation is the failure to allow densities to naturally change over time. Let me explain. Imagine you are trying to sell a property you own in a desirable inner suburban neighborhood in your town. The lot is 4,000 square feet and hosts an old 4,000 square-foot home. There is incredible demand for housing in this area; perhaps the schools are good, or the amenities are nice, or the neighborhood sits adjacent to a major jobs center, meaning that residents can walk to work. I’ll leave the reasons to you. Who do you sell it to? You have at least two options: First, you could sell it to a wealthy individual, who would use the entire property as his home. He is willing to pay the market rate for single-family homes like this, which in this case is $300,000. Under current financing, he would likely have a monthly mortgage payment in the ballpark of $1,300. Second, you could sell it to a developer who intends to subdivide the house into four 1,000 square foot one-bedroom apartments, renting each of them at a market rate of $500 to service workers who commute to downtown. After factoring in expenses, her annual net operating income would be around $20,160. Assuming a multifamily cap rate of 6.0.%, this means that she could pay up to $336,000 for your property. Based on this analysis, who do you sell it to? The answer is obvious: you will sell it to the multifamily developer who will subdivide and rent out the house, not necessarily because you’re a bleeding heart urbanist, but in order to maximize your earnings. As rents in the area rise, the pressure to sell to a buyer who would densify the property will only grow. The prospective mansion buyer […]

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