The Carnegie Library in Washington, D.C. is now home to the world’s newest Apple Store following an expensive rehabilitation funded by the retailer. Originally built as a public library in 1903, it reopened its doors to the public on May 11, 2019 following decades of disuse, neglect, and a slew of failed attempts to repurpose the building as a museum. While some are fretting that a historic building owned by the city has been turned over to commercial use, we can rest assured that the Historical Society of Washington, D.C., the current leaseholder to the building, made the right decision.

More than fifteen years ago, Niskanen Center founder Jerry Taylor and his then-colleague at the Cato Institute, Peter Van Doren, had a novel proposal to solve an intractable political dispute about the Arctic National Wildlife Refuge (ANWR), a wilderness area in northeast Alaska that is home to large populations of wildlife and vast, untapped petroleum deposits.

In the early 2000s, the Bush Administration proposed opening the refuge to oil drilling in the wake of rising crude oil prices. Naturally, the usual suspects came out in favor or against the proposal.

Environmentalist detractors worried that a pristine wildlife area could be ruined by any drilling and the possibility of leaky pipelines. Advocates, on the other hand, claimed only a tiny sliver of land was needed to extract billions of dollars of oil and the refuge would remain largely untouched. The benefits of oil drilling, proponents argued, would be widely shared because oil is used in so many parts of economy.

Taylor and Van Doren’s proposal was simple: the federal government should give ANWR, in its entirety, to the Sierra Club or some other environmentalist group, including full rights to use or transfer the land as they see fit. While the Sierra Club lobbied for zero drilling when the issue was decided through the political process, assigning the group transferable property rights to ANWR might have led them to reconsider.

Since they would receive most of the revenue generated by oil drilling in ANWR, the Sierra Club would be in a position to carefully weigh the potential costs of drilling against the billions of dollars of oil revenue they could use to support environmental causes worldwide. To boot, they would also have the ability to personally oversee oil production to ensure that it would be handled in an environmentally sensitive manner. Drilling might have some environmental costs, but would they really allow none whatsoever?

The economic issue at stake in the ANWR debate was whether or not the oil was made available to the market. In terms of efficiency, it didn’t really matter who profited from the oil, just that it was made available for sale in global markets. By assigning ownership to a group concerned with protecting ANWR and who also had global environmental interests, the federal government could be assured that the right decision would be made.

Congress unwittingly tried out a version of Taylor and Van Doren’s proposal with the Carnegie Library when, in 1999, it appropriated $2 million to create the City Museum of Washington, conditioned on the District of Columbia leasing the building to the Historical Society of Washington, D.C. for 99 years for $1 per year. While the money Congress authorized was tied directly to creating a specific museum, the Society was essentially given the historic building for at zero price and, eventually, free to use it as they saw fit.

The Historical Society was never able to successfully convert the library into a functional museum open to the general public despite multiple attempts and tens millions of dollars spent. Their efforts never attracted nearly enough visitors to support a budget sufficient to maintain the large and expensive building, and, for most of the past two decades, the building has primarily been empty save for a few private events and the Society’s offices. Despite operating rent-free from the library, the Society itself has been hemorrhaging cash in the last few years.

In the wake of their continued difficulties, the Society decided to partner with a business to revive the building and fund their educational mission. Apple agreed to spend more than $30 million to refurbish the building and signed a lease for the first floor that will provide the Society with $7 million of revenue over the next ten years. The basement and second floor of the library are now home to historical exhibits, and the building will receive hundreds of thousands of visitors per year.

This outcome is almost certainly better than any feasible alternative. Even if the local government found a way to fund the rehabilitation and operations of a museum centered on Washington’s history, the Society knows that, despite their best efforts, they could only expect a handful of visitors. Given their long tenure in the building, their strong interest in promoting education, and their multiple attempts to open a museum on the site, the Society is in a unique position to determine whether the public is best served by devoting the entire building to historical exhibits.

By partnering with Apple, the Historical Society of Washington, D.C. was able to successfully leverage the first floor of their building in a way that will allow a much larger share of the public to use one of the city’s great buildings and simultaneously increase the number of patrons that will be able to enjoy their collection of artifacts and photographs. Historical buildings need not be cleansed of all commercial activity to be great, and the Carnegie Library is a prime example.

The post The Carnegie Library Apple Store is Fine appeared first on Market Urbanism.

1. Recently at Market Urbanism

A great new paper on how government fights walking by Michael Lewyn

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.

Why Japanese Zoning More Liberal Than US Zoning by Nolan Gray

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?

Democratic Candidates on Housing by Jeff Fong

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.

Against Spot Text Amendments by Nolan Gray

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.

What Should I Read to Understand Zoning? by Nolan Gray

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.

Homeownership and the Warren Housing Bill by Emily Hamilton 

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.

High-Rises and Street Life by Michael Lewyn 

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.

The Human Cost of Zoning in Indian Cities by Shanu Athiparambath

Nearly one-third of the people in Delhi live in illegal colonies where they do not have secure property titles. Illegal colonies violate zoning regulations and master plans. Water connections, sewer lines, electricity, and roads do not function very well because illegal colonies are not even supposed to exist. Some of them are more populous than many American cities.

The Storper paper: not exactly a bombshell by Michael Lewyn

The authors’ attack on upzoning is in the last few pages, and is based on broad, sweeping generalizations rather than actual data.

2. Also by Market Urbanists

Nolan Gray at Citylab: “How Marvel Packs a Universe Into New York City”

Nolan Gray at Strong Towns: “Your Zoning Code Is Inherently Exclusionary (But It Doesn’t Have To Be)”

Brandon Fuller and Nolan Gray at City Journal: “Where are all the Republican YIMBYs?”

Emily Hamilton at Mercatus: “Expanding Urban Housing Access for Women”

Emily Hamilton at Statesman Journal: “Nice try Oregon, but new statewide rent control law won’t fix housing prices”

Sanford Ikeda on Order without Design by Alain Bertaud: “An urban planner who understands economics!“

Randy Shaw at Beyond Chron SB50 Exposes SF Supes’ Failed Housing Vision

Nolan Gray and Salim Furth at Austin American-Statesman: Do minimum lot sizes in suburbs contribute to Texas sprawl?

3. At the Market Urbanism Facebook Group

Tony Bobay says: “Rent control advocates are the flat-earthers of the housing market.”

Luís Guilherme F. Pereira asks: “Is housing in the US a Ponzi Scheme? It sure looks a hell lot like it.”

Drew Lee asks: “Whats Market Urbanism’s opinion on high speed rail?”

Via Joe Wolf: Council approves a taller, denser Seattle. What does that mean for housing?

Via Michael Burns: Skid Road: How California’s army of homeless has turned the state’s richest boulevards into RV parks as exorbitant rents force families and full-time workers to live on four wheels

Via Carl Webb: Study: Gentrification and cultural displacement most intense in America’s largest cities, and absent from many others

Via Michael Burns: Hong Kong government plans £60 billion artificial island to solve “serious” land shortage

Via Michael Burns: Hong Kong government plans £60 billion artificial island to solve “serious” land shortage

Via Drew Lee: Stuck in traffic? Blame the Jones Act!

Via David Daniel Turner: A Growing Problem in Real Estate: Too Many Too Big Houses

Via Drew Lee: The Streets Were Never Free. Congestion Pricing Finally Makes That Plain.

Via Stephen Rowe: NIMBYs Argue New Housing Supply Doesn’t Make Cities Affordable. They’re Wrong.

Via Jignesh Ghandi: The Hidden Horror of Hudson Yards Is How It Was Financed

Via James Hanley: Why Economists Love Property Taxes and You Don’t

Via Lachlan Holmes: Neighbours oppose ‘greedy’ plan to build Hamilton’s 3 tallest buildings in Stoney Creek

Via Michael Burns: Floating Cities: United Nations Unveils Bold Idea to Fight Climate Change

Via Jim Zavist: Vigilantes Are Taking Scooters Off the Streets of San Diego and Bird and Lime Are Pissed

Via Drew Lee: Virgin Trains finally set to launch construction of West Palm Beach-to-Orlando link

Via Eric Fontaine: Is Marginally Loosening California’s Zoning Restrictions Racist?

Via Michael Burns: Young People are Choosing to Live in “Pods” Instead of Apartments

Via Drew Lee: Holy cow! California may get rid of single-family zoning

Via Roger Valdez: The Power Of Narrative: How Do We Change The Housing Story?

Via Joe Wolf: The Neighborhood Is Mostly Black. The Home Buyers Are Most

Via Austin Whaley: Man Wants To Buy Old Cruise Ship And Turn It Into Housing For The Homeless

4. Stephen Smith’s MU tweet of the week

Vacancy rates and changes in rent being inversely proportional is one of the most ironclad relationships there is in housing but I know I’m wasting my time trying to establish facts in the year 2019 https://t.co/NnZrRdIPcf

— Market Urbanism (@MarketUrbanism) May 7, 2019

The post Market Urbanism MUsings May 11, 2019 appeared first on Market Urbanism.

Most of this paper isn’t really about the effect of housing supply on prices at all. Instead, the first 80 percent of the paper seems to argue that it makes no sense for low-skilled domestic workers to live in cities, because “Several decades ago mid-skilled work was clustered in big cities, while low-skilled work was most prevalent in the countryside. No longer; the mid-skilled jobs that remain are more likely to be found in rural areas than in urban ones.” (p. 20).

The authors’ attack on upzoning is in the last few pages, and is based on broad, sweeping generalizations rather than actual data. First, they say that upzoning “would very likely involve replacing older and lower-quality housing stock in areas highly favoured by the market, effectively decreasing housing supply for lower income households in desirable areas.” (p. 30). They cite no source or data for this assertion- just pure conjecture. What’s wrong with their claim? First, such gentrification happens without upzoning; for example, in Chicago’s Lincoln Park, gentrification occurred through renovation of existing structures, rather than new, taller buildings- and of course places where new construction is politically difficult (such as San Francisco and Manhattan) are notorious for gentrification. Second, it assumes that new housing inevitably replaces older housing, rather than, say, vacant lots- an obvious overgeneralization..

Second, they rely on the “but we’re already building new housing!” argument. They cite a paywalled newpaper article to support this statement: “rents are now declining for the highest earners while continuing to increase for the poorest in San Francisco, Atlanta, Nashville, Chicago, Philadelphia, Denver, Pittsburgh, and Washington, noting that a boom in luxury construction in these areas has failed to ease housing market competition for cheaper properties.” (p. 30). But of course there is a huge difference between rents in San Francisco (where development is in fact quite difficult and where new construction decreased by 41 percent in 2018) and rents in Atlanta (where development is less difficult).

They then proceed to rely on Yonah Freemark’s study of some neighborhoods in Chicago, citing his work for the claim that in “Chicago, for example, it has been found that upzoning has had unintended consequences, such as raising housing prices without necessarily triggering additional construction of newly permitted dwellings.” (p. 32). But as Freemark himself has noted, ” “b) 5 yrs [the period of his study] may not be enough time for full upzoning effects. c) Upzonings are still probably good for affordability @ metro scale.” So Freemark’s work doesn’t support their sweeping claims.

Finally, they (correctly) point out that more lenient zoning won’t cure segregation. But it also won’t cure Lyme disease. So what?

The post The Storper paper: not exactly a bombshell appeared first on Market Urbanism.

by Shanu Athiparambath

Years ago, I worked for a magazine in Delhi. I wanted to live near the magazine office, but the rent was too damn high. In a low-rent area nearby, I rented a dingy room my girlfriend named “The Black Hole.” In buildings sitting across the street from mine, rents were many folds higher. This did not make sense. It took me years to realize that I was living in an “illegal colony.”

Nearly one-third of the people in Delhi live in illegal colonies where they do not have secure property titles. Illegal colonies violate zoning regulations and master plans. Water connections, sewer lines, electricity, and roads do not function very well because illegal colonies are not even supposed to exist. Some of them are more populous than many American cities.

Rents are low, but these properties are expensive because owners expect the government to legalize them. It is difficult to redevelop these dilapidated buildings because the threat of eviction is always there. Hundreds of thousands of people who migrate to Delhi every year settle in such colonies because formal housing is too expensive. Developable land is scarce, and complying with building codes is a luxury they cannot afford.

Land Everywhere, but Nowhere to Live

Land is not scarce in Delhi, as I learned in one of those days, when a friend drove me around the city. There is enough land for everybody to live in a mansion. Delhi has nearly 20,000 parks and gardens. Large tracts of land remain idle or underutilized, either because the government owns it, or because property titles are weak. Politicians and senior bureaucrats live in mansions with vast, manicured lawns in the core of the city. Some of these political eminentoes farm on valuable urban land while firms and households move to the periphery or satellite cities where real estate prices are lower. So the average commute is long, roads are too congested, and Delhi is one of the most polluted cities in the world.

In Delhi, the floor space-to-land ratio is usually 2. In Los Angeles it can be as high as 13, and in Singapore it can get as high as 25.

Zoning regulations inflict great harm. But it is difficult for Americans to imagine the cost of zoning in Indian cities. Delhi is one of the most crowded cities in the world, and there is great demand for floor space. But real estate developers are not allowed to build tall buildings. In Delhi, for apartment buildings, the regulated Floor Area Ratio (FAR) is usually 2. FAR, an urban planning concept, is the ratio of built-out floor space to the area of the plot.

This means, in Delhi, developers are not allowed to build more than 2,000 square feet of floor space on a 1,000 square feet plot. If a building stands on the whole plot, this would be a two-storey building.

To understand the harm this inflicts on the world’s second-most populous city, remember that in Midtown Manhattan, FAR can go up to 15. In Los Angeles, it can get as high as 13, and in Chicago, up to 12. In Hong Kong’s downtown, the highest FAR is 12, in Bahrain it is 17, and in Singapore it can get as high as 25. Not surprisingly, office space in Delhi’s downtown is among the most expensive in the world. It is impossible to profitably redevelop these crumbling buildings in Delhi’s downtown because they are under rent control.

Delhi is by no means an exception. There are far worse urban planning tragedies among Indian cities. Floor Area Ratios are usually between 1 and 2 in most Indian cities, though some of these cities are more populated than most countries.

I have never lived in Mumbai, where the average person consumes less floor space than an American prisoner. Mumbai is India’s most prosperous city, but in 2009, the average floor space consumption in Mumbai was merely 48 square feet. There are instances of 10-12 people living in a tiny room. Over half the households have only one room. As early as 1978, a draft of the Department of Justice had accepted that prisons in United States should offer single rooms of at least 80 square feet per man.

The High Cost of Zoning

Every day, about nine people die while traveling in Mumbai’s overcrowded trains. Many of them would have survived if Mumbai had taller buildings and fewer people would have to commute into the city. Millions of migrants in Mumbai consider this a price worth paying. They live in squalid conditions, risk their lives, and squeeze themselves into congested spaces because migrating to Mumbai is their best bet to becoming far more productive overnight.

Indian wages are unusually low by global standards. It is possible to earn incomparably more by migrating to the first world. Low-skilled Indians find this almost impossible to do. It is much easier to migrate to Mumbai, where the per capita income is nearly twice the rest of India. Mumbai offers better living standards, though in many ways American prisoners are better off. Mumbai tries to prevent such migrants from coming in without so much as imposing migration restrictions. Building height regulations do not have quite the same effect, but it is close.

Nearly half the people in Mumbai live in slums, though they are not poor by Indian standards. In rent-controlled buildings, rents could be as low as 1/1000th of the market rent. Many live in crumbling rent-controlled buildings that may collapse anytime. Such buildings are redeveloped only when the government is willing to foot the bill.

The experience of Mumbai and Delhi with zoning regulations is merely illustrative. There is stark similarity in zoning regulations in Indian cities. In Mumbai, Delhi, and other Indian cities, the regulated FAR is nearly uniform even from commercial to residential areas. So labor markets in Mumbai are fragmented, and the average commute is close to an hour. In most cities, there is great variance between FARs of commercial and residential buildings.

In most cities, FARs are higher near mass-transit corridors. To allow redevelopment of buildings, regulated FARs are usually higher than FARs of existing buildings. Indian cities, however, do not conform to these norms. Floor area ratios in Indian cities bear little relationship to real estate prices.

Mumbai is the densest major city in the world, but in Mumbai’s downtown, FAR is 1.33. This is not true of any global city. In 1964, urban planners decided to decongest Mumbai by restricting real estate development in the center. Socialists believed they could decongest Mumbai by restricting real estate development in the best parts of the city.

Like all such grand plans, this too failed. Zoning regulations did not stop people from migrating to Mumbai. Instead, migrants responded by consuming less and less floor space. They settle down in congested spaces. They build informal settlements in slums. They live in buildings where floors crack, walls crumble, rats eat infants, and clean water is rationed. They occupy rent-controlled buildings where people live so close that petty squabbles lead to riots. It is a joke on planners that Mumbai is now the most crowded city in the world.

There are, of course, many other reasons. Mumbai is one of the most geographically challenged cities in the world. Land is scarce in a city built on the narrow tip of a peninsula. Two-third of the land at a 25-kilometer radius from Mumbai’s downtown is covered by water. Large tracts of publicly owned land remains idle in and around Mumbai’s downtown. Much of the land that belonged to Mumbai’s long-closed cotton mills remains idle too. Mumbai even has a national park that spreads over an area of 104 square kilometers.

People Are Not the Problem

Alain Bertaud, the world’s foremost expert on land-use regulations in developing countries, has long been pointing out how zoning regulations have ruined Mumbai. Mumbai does not have bridges that connect the mainland to docks. As Bertaud points out, such bridges built across San Francisco Bay and Pearl River Delta have turned topographical liabilities into assets. According to Bertaud, with coastal zone regulations as stringent as Mumbai, New York, Hong Kong, Singapore, San Francisco, and Rio de Janeiro would not even have been built.

Knight Frank once estimated that a luxury home in Mumbai costs 308 times the average annual income in India. In New York, a luxury home costs only 48.4 times the average income in the United States. Planners blame this on Mumbai’s rising population.

This is nonsense. In 1984, the average floor space consumption in Shanghai was 3.6 square meters. By allowing tall buildings, Shanghai raised average floor consumption to 34 square meters by 2010. Cities across the world have raised floor space consumption by allowing tall buildings. In 1910, 16 people lived on a typical floor of 920 square feet in Manhattan. In 2010, four people lived on a typical floor, because floor space consumption had risen four times.

In saner cities, when population rises, floor space consumption rises too. But this is an unpleasant truth planners do not want to hear.

Shanu Athiparambath

Shanu Athiparambath is a writer who lives in Delhi. He is working on his debut novel on human heterogeneity

This article was originally published on FEE.org. Read the original article.

The post The Human Cost of Zoning in Indian Cities appeared first on Market Urbanism.

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.

The post High-Rises and Street Life appeared first on Market Urbanism.

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.

The post What Should I Read to Understand Zoning? appeared first on Market Urbanism.

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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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.

An extreme grade change is one reason why a lot might receive a variance, as enforcing the standard setback rules could make development impossible.

Parking 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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