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HomeEconomyShould We Abolish Zoning?

Should We Abolish Zoning?

Most of America’s land area is zoned, a government regulation that tells landowners what they’re allowed to build in different places, and how much of it they can build. Some experts are now recommending getting rid of zoning entirely.

Are they right? I consider the proposal in a new paper. The case for abolishing zoning ends up a lot stronger than I expected. 

Bernard Siegan’s out-of-print study of Houston, the largest city without zoning, just came out in a new edition. The author of the afterword to this new edition, UCLA PhD student and urban planner Nolan Gray, has come out with his own book, Arbitrary Lines: How Zoning Broke the American City and How to Fix It. Together, they say the example of Houston proves our cities would be better off without zoning. Why?

Let’s start with the litany of problems scholars have found with excessive zoning in the U.S. today. Stricter zoning has been linked to housing undersupply, housing unaffordability, homelessness, out-migration, slower economic growth, lower overall social welfare, socioeconomic segregation, racial segregation, higher property taxes, air and groundwater pollution, longer commute times, lower marriage and fertility rates, and bigger rich-poor test score gaps. With all these costs, reforming zoning looks urgent.

But why abolish it altogether? Don’t we need zoning to prevent people from opening factories or sexually oriented businesses in residential neighborhoods?

Not at all, says Gray. First, market forces encourage industrial facilities to locate near transportation nodes, like ports and railroads. So these uses will cluster away from most people’s homes, and that is just what we usually saw before zoning. Wanting to be a good neighbor also causes people to try to make their property uses and appearance amenable to their neighbors. To deal with the occasional exception, we could use private covenants, which restrict land use voluntarily and run with the land when it is sold or leased. If that’s not enough, there’s the common law of nuisance. If you cause air, water, light, or noise pollution that hurts your neighbors, they can sue you, which is a good deterrent to doing it in the first place.

Finally, if market forces, neighborliness, covenants, and nuisance law don’t do the trick, local governments can pass ordinances limiting how closely certain uses can be located to other uses. You don’t need to draw “arbitrary lines” around zoning districts and come up with lists of what’s allowed in each district, says Gray. Just buffer incompatible uses!

That is what Houston has done, and it has allowed Houston to remain affordable while attracting thousands of new workers every year (Figure 1).

Figure 1. Rents and Population Growth in Selected Metropolitan Statistical Areas

Now, Houston is not a free-for-all. It requires a minimum number of parking spaces for different uses, which encourages sprawl. Its complex development code limits how many homes you may build on an acre. But it has no zoning, and its density restrictions are less severe than in almost any other large city.

Could the Houston model work everywhere else? Maybe. Central planning of land use is unthinkably complex. Siegan: “Questions of compatibility, economic feasibility, property values, existing uses, adjoining and nearby uses, traffic, topography, utilities, schools, future growth, conservation, and environment have to be considered for countless locations, covering hundreds of square miles.” Zoning boundaries and regulations are based on little more than “guesswork.”

The only problem is that zoning’s popular. Many people consider zoning part of the “property right” they bought in their home. They really should set up covenants if they want that security, but the fact that zoning has been around so long has discouraged people from doing this.

Instead of abolishing zoning, we can promote private alternatives. Exempt private communities from zoning if they meet certain conditions. Let neighborhoods remove restrictions on their own. Require governments to compensate landowners if they add restrictions that reduce the value of a property. (For more details, see the paper.)

The surprisingly strong argument for abolishing zoning is the rare case of successfully moving the “Overton window.” It should make all of us more sympathetic to fundamental reforms.