When zoning laws began to proliferate in the 1920s, they were a newly imposed restriction on what homeowners could do with their properties. In those days, most people lived in long-established communities in cities. Today, after 70 years of suburbanization following World War II, the large majority of homeowners bought their homes in suburbs built in response to market demand for single-family living. Local governments (typically county governments outside the main city) responded to the kind of housing the developers wanted to create to meet the growing single-family market demand.
In effect, postwar single-family zoning represented an agreement under which homebuyers accepted restrictions on other types of uses in their neighborhood in order to be protected from negative externalities that neighbors might create, without the protection of the covenant provided by single-family zoning.
To abolish single-family zoning is a violation of the contract between a municipality and its single-family homeowners. They selected the neighborhood and the house based on the protections offered by prevailing zoning.
California was recently the first state to enact legislation that invalidates single-family zoning, as an effort to increase housing supply. History suggests other alternatives would be wiser and more respectful of property rights.
Support for state, let alone federal, preemption of local government policy violates basic principles of limited government: that any government action should be carried out at the lowest possible level of government. And there are alternatives to conventional zoning, developed by academics in the law and economics/public choice theory field.
The first major challenge came from University of Chicago’s Bernard Siegan, with his pathbreaking 1972 book, Land Use Without Zoning. As editor of Reason magazine in those years, I commissioned a lengthy interview with Siegan that appeared in the April 1973 issue. His book focused on the absence of zoning in several Texas cities, especially Houston.
Single-family neighborhoods in Houston are able to form land use agreements that define what homeowners can and cannot do with their property. They are typically of 30 years’ duration, at which time they can be extended, modified, or abolished via a supermajority vote. The Houston city government enforces these neighborhood agreements. Rather than micromanaging land use, the city government follows market trends to provide the infrastructure needed to accommodate the city’s growth: streets, water and sewer, etc. Houston voters have at least three times voted against ballot measures that would have implemented conventional zoning.
The Houston approach provides for the kinds of ground rules most people are happy with. But it also permits change over time. At a land use conference in Houston in 1977, I was part of a tour through various neighborhoods, with our libertarian conference director pointing out neighborhoods that had once been single-family but whose covenants had been amended to account for economic changes that made properties along what had become a major street more valuable as commercial than as residential uses.
Houston never had zoning, so many of its new subdivisions came equipped with deed-based neighborhood associations. Established neighborhoods could organize and create a comparable set of land use covenants that a supermajority was willing to be governed by. But how could existing neighborhoods in zoned communities emulate this preferable approach?
That problem is addressed at book-length and in research papers by the late Robert Nelson of the School of Public Policy at the University of Maryland. His research topics included zoning and property rights, the failure of federal public lands policies, and (in my view) his magnum opus, Private Neighborhoods and the Transformation of Local Government. As I noted in my cover blurb for the book, “Robert Nelson has written two very powerful books in one. The first documents the amazing revolution in neighborhood governance that has gone almost unnoticed over the past 40 years. The second is a bold proposal for extending this revolution to inner cities and suburban fringes, where it could do even more good.”
Nelson was the leading academic researcher on the growth of what he termed private neighborhood associations. His opening chapter explains what such associations can do and their advantages compared with government zoning. He noted that at the time he was writing (the early 2000s), there were more than 250,000 neighborhood associations in the United States, “about ten times the number of general-purpose municipalities.” Most of these associations are created by the developers of large new communities and offered as a benefit to potential purchasers. Long-established law enables these associations to create rules and regulations and enforce them contractually. This is analogous to condominium associations, which are small-scale versions of private neighborhood associations. These private provisions are exempt from local zoning and, hence, would be protected from laws abolishing single-family zoning.
But what about neighborhoods long governed by traditional municipal zoning? Part IV of Nelson’s book discusses how existing zoned neighborhoods might “secede” from a city. Clearly, they already have the right to form a voluntary homeowners association, like what exists in the neighborhood my wife and I live in. But those associations cannot make rules that homeowners must abide by. Nelson also discusses political and legal rationales for creating deed-based private neighborhood associations in currently zoned communities. That would likely require legislation, spelling out the supermajority required to form it and at least some guidance for negotiating which services the new association would take over from the city or county in which it is located. He writes, “A neighborhood association is a form of private government, like a business corporation, and thus should perhaps have wider constitutional freedom to conduct its affairs in its own way.” He also notes that in many states, a neighborhood could already secede from a local government by incorporating as a new municipality, especially if it is currently located in an unincorporated portion of a county. That new city would be in a better position to convert to a private neighborhood association, since it would start fresh with no zoning code.
The difficulty of seceding from an incorporated city played out for me in 2001, when several Reason Foundation colleagues and I helped organize and run a conference for the organization that aimed to have the San Fernando Valley secede from the City of Los Angeles. Bob Nelson was one of 11 speakers at this event. The City charter required any secession to obtain a majority vote in both the City itself and in the portion that sought to secede. The measure was defeated, despite majority support in the Valley.
In short, there is a free market alternative to conventional zoning. As for the idea that California can fix its massive shortage of affordable housing by banning single-family zoning, readers should realize what caused the shortage. As Nelson points out in his book, starting in the 1960s a strong anti-growth movement led by relatively well-off environmentalists led to aggressive “down-zoning” and preventing undeveloped land from being converted to residential or any other use except “open space.”
I saw this happening in Santa Barbara shortly after moving there in 1970. By the late 1980s, Nelson reports, more than 900 growth control measures had been adopted by California municipalities. And the newly created California Coastal Commission “protected” land along the coast from anything short of mansions on multiple-acre plots. Housing prices soared. Large wealthier counties adopted de facto urban growth boundaries, preventing new, more-affordable subdivisions from being built at the fringe. California’s affordable housing shortage is self-inflicted. No such shortages exist in metro areas that don’t restrict suburban expansion, such as Dallas, Houston, and Phoenix.
Single-family zoning came about as a result of market demand, which continues today as millennials start families and leave cities for suburban houses with yards, pools, and safe play areas for their kids. To the extent that there’s a demand for more mixed-use housing, developers will seek sites where this can be done affordably, at the urban fringe and also denser infill development in neighborhoods already zoned for multifamily housing. Minor zoning changes could allow for increased density in those areas. And developers will continue to create private neighborhood associations to protect the values that homebuyers seek to obtain and preserve.
Single-family zoning is not the problem. Growth control is.
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