Category Archives: Regional planning

Land-use regulation has added $200,000 to the median price of Seattle homes, says Theo Eicher, an economist at the University of Washington. This is a little greater than the amount estimated by the Antiplanner, which was $180,000, but since the Antiplanner was being deliberately conservative, the numbers are remarkably close.

As described here, Eicher’s study relied on a recently released database of land-use regulation in 2,730 U.S. cities that was compiled by Joseph Gyourko of the Wharton Business School. Eicher compared housing prices from 2006 census data with regulation and showed there is a strong correlation between the two. Eicher was only able to look at 250 cities, because census data were not collected in all cities in the Wharton database. When the 2010 census is complete, an even more detailed study should be possible.

Originally built in the 1920s for $2,800 (without the second story, which was added later), this house recently sold for $650,000. According to economist Theo Eicher, more than $200,000 of that price is due to land-use regulation.
Flickr photo by brewbooks.

Eicher’s actual paper includes data for all 250 cities, 123 of which overlap with the Antiplanner’s data. His estimates of the costs of regulation tend to be a little higher than mine except in California, Florida, and a few other places where they are lower.

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Back in 1972, a one-hit singing pair named Cashman & West released an ode to New York City called American City Suite. The song reflected back on the city’s happy days and mourned its then-current decay. Although a 7-3/4-minute version was produced for radio, the full version of the song was 12 minutes and it became an “anthem” for New Yorkers in the 1970s.

At that time, many people believed that the problem with the cities was that the wealthy and middle-class had fled to the suburbs, leaving only the poor behind. Big-city officials viewed the suburbs as parasites, because they benefitted from the city but paid no taxes to it. They hoped to remedy this by imposing some sort of commuter tax on suburbanites.

Having grown up in a city, I remember repeating this viewpoint as a high-school student to a suburban relative. He vehemently responded that there was no way he would pay taxes to a corrupt city government. The notion that modern government officials might be corrupt, at least outside of Chicago, had never occurred to me.

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Yesterday, one of the Antiplanner’s loyal opponents left a comment comparing land-use regulation with the abolition of slavery, implying that it would just as absurd to compensate landowners for such regulation as it would be to compensate slaveowners for ending slavery. The comparison is apt. Those who make it in favor of land-use regulation apparently think the solution to land-use debates is to have a civil war and kill hundreds of thousands of people.

I’ve heard this comparison before with regard to endangered species. Slavery was immoral, so we didn’t compensate slaveowners. Making a species go extinct is equally immoral, so we shouldn’t compensate owners of habitat when we regulate away their right to use it.

This attitude betrays a profound misunderstanding of both history and economics.

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Dorothy English will probably never get to subdivide her land. She and her husband bought 20 acres of land outside of Portland in 1953, when there was no zoning on the land. After her husband died, she wanted to divide it into eight parcels to give to her children and grandchildren.

By that time, however, the Oregon legislature required counties to zone all land, and Dorothy’s was outside of Portland’s urban-growth boundary. She fought hard for the right to subdivide, once testifying before the legislature that, “I’m 91 years old, and I plan to live to be 100 because there are some bastards I want to get even with.”

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How do we fix planning and zoning laws that make housing unaffordable and give planners the opportunity to impose their utopian ideas on unwilling neighborhoods? One answer has been offered by Robert Nelson, a University of Maryland professor of public policy. In various articles and books, Nelson has proposed that states allow neighborhoods to opt out of zoning and write their own zoning codes in the form of protective covenants.

Houston already has a system like this, albeit without zoning. Anyone who lives in a neighborhood that doesn’t already have protective covenants can petition their neighbors and, if a majority agree, create a homeowners association and write such covenants. Nelson has essentially proposed to allow this in all cities, and to slowly replace zoning with such covenants.

But what about rural areas? Should people be allowed to opt out of rural zoning? Since the Antiplanner is not too fond of such rural zoning, clearly my answer would be “yes.” And a law recently passed in Missouri effectively allows this to take place.

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