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March 13, 2012 10:04 AM Get Your Government Hands Off My Land Use Regulations

By John Mangin

New Jersey, a primarily suburban state, has some of the highest housing costs in the country. According to HUD, a family that wants to rent a “safe and modest” two-bedroom in the Garden State must bring home about $51,000 to afford it. A solid majority of the state’s renters fall short of that mark. The best remedy for such high rents is fairly simple: Let developers build more housing. But in most cases, suburban planning boards stand in the way of new development that would make housing more affordable.

A planning board is generally a group of local homeowners who enforce land-use regulations. They’re people with a pronounced interest in keeping property values high, and who have at their disposal the official tools—height maximums, parking minimums, and other density restrictions—to make that happen. And when regulations don’t avail, they’re quite content to reject new building projects on vague and flimsy “health and safety” grounds, then dare the spurned applicants to sue. (As a housing attorney who works in New Jersey, I’m all too familiar with this game.)

Planning boards are among the most spirited government regulators out there, so you might think that conservatives would be their natural enemies. You’d be wrong. In New Jersey, the fight against efforts to deregulate is led by Governor Chris Christie. Typically a friend to markets and foe to regulation, he is in this instance an ardent supporter of “home rule”—a euphemism for letting the planning boards do whatever they want. There is something deeply curious about this. Perhaps more than any other form of regulation, land use restrictions have the effect of distorting markets, infringing on private property rights, and stifling economic growth. They are actually worthy of the epithet “socialistic.” Nevertheless, any attempt to relax planning restrictions in the suburbs (in order to, say, develop a small multifamily building among detached single family homes) is liable to be met with protests reminiscent, in their tone and logic, of “Get Your Government Hands Off My Medicare.”

Urbanists and the activist left don’t see the issue any more clearly. Urban community advocates have inherited from Jane Jacobs the mistaken belief that the best way to prevent displacement in gentrifying neighborhoods is to keep housing stock old and small in scale. California environmentalists thwart construction in cities and along the suburban coast, not realizing that they’re diverting development to the Sun Belt with its longer commutes and full-blast air conditioning.

Into this rare zone of agreement between urbanites, suburbanites, Tea Partiers, and Occupy-types, steps Matt Yglesias, columnist for Slate and prolific lefty blogger, to tell all of them they’re wrong. The message of his short new e-book, The Rent is Too Damn High: What to Do About It and Why It Matters More Than You Think, can be boiled down to: “Cheaper housing would be beneficial to America, and this is best achieved by relaxing anti-density restrictions.”

Supply and demand applies to housing, and density is supply. In places like New York, DC, Coastal California, and suburban New Jersey, housing is expensive. In a reasonably free market, a developer builds units when demand sends housing prices higher than constructions costs. When bulk requirements cap density, or when activists oppose development, this market response isn’t possible, and prices get bid up. This dynamic, rather than a simple surge of demand, is where expensive housing comes from.

Yglesias doesn’t just deal with the microeconomics of the issue—i.e., the prices families and individuals pay for housing and the life decisions they make because of it. Following academic economists like Ed Glaeser and popularizers like Ryan Avent, he stresses the macro costs of restrictive land use regulations to our economy and the environment.

High housing costs, he argues, reduce GDP appreciably. Productivity isn’t simply a factor of how hard or effectively you work. It also depends on where you are. Especially in a service economy, locating oneself in a dense, prosperous place is analogous to farming on fertile soil. All else equal, increasing the density of a place is akin to adding fertilizer.

But as it is, the recent pattern of migration in the United States is toward cheap housing rather than toward prosperous, highly productive places—two paths that diverge in today’s America. Between 2000 and 2010, the ten fastest growing metropolitan areas were Western or Sun Belt cities with median incomes and productivity well below the national average. Aggregate the millions of decisions to move to Raleigh instead of Boston, or Phoenix instead of San Jose, and you’re talking serious domestic product loss and a partial explanation for median wage stagnation.

Raleigh and Phoenix are also less green than Boston and San Jose. Dense cities are green. Mild, coastal climates are green. Commutes in dense areas are shorter and often by foot, bicycle, or mass transit. Energy use for heating and cooling is less intensive. Land saved by building more densely can be used for parks or natural habitat. A wider-gauge environmentalism would love cities and more intense development where development already exists.

Two things that Yglesias, to his credit, does not do: He refrains from the ranty moral-aesthetic judgments about suburban living that often make books on this topic - such the works of James Howard Kunstler - so exhausting. And he doesn’t advocate government-supported building projects of the sort popular among some big-city mayors.

He accepts that many people prefer suburbs to dense cities. For the many others who either live in cities or would like to, his solution is market-driven and simple. Private developers would gladly build housing for them if density limits were relaxed to make that possible. Yglesias wants the government to get out of the way to let people and developers do what they already want to do anyway. The market, while not magic, will do a pretty good job of providing for people across the range of preferences.

But the political battles over increased density raise the obvious question: If a rainbow coalition of urbanites and suburbanites, Tea Party and Occupy-types, are all united against deregulation, how do we know people really want it? Is land-use reform one of those wonky attempts to impose on a clever solution that people actually hate?

Here, it’s useful to locate the primary political fault-lines. As we’ve seen, it’s not so much right-left as insider-outsider. The suburban planning board, the historic preservationist, the community activist, the environmentalist—they’re all attempting to prevent changes to a status quo in the places they live. Viewed from a slightly different angle, they’re all incumbent beneficiaries bent on preserving and extending the benefits they enjoy to the exclusion of potential entrants and to the detriment of everyone else.

Planning boards and other such bodies are basically an example of regulatory capture by local homeowners. They love when excess demand sends housing prices skyward. It means their largest assets are appreciating. Same goes for urban homeowners. (Yglesias notes that his ideas will be a hard sell as long as people continue perversely to cheer when housing costs rise.) As long as local homeowners get to make the decisions, their narrow preferences will trump laudable regional or national policy goals.

The questionable justice of such arrangements is a theme in much of Yglesias’s other writing at Slate. See his posts on occupational licensing requirements or the attempts of bricks-and-mortar restaurateurs to use “health and safety” regulation to stifle competition from street vendors and food trucks. This concern is also the angle into land use for libertarian writers like Steven Smith of the blog Market Urbanism and Tim Lee at Forbes. The contest over anti-density regulations may not have the ready-made appeal for libertarians of a good old eminent domain fight, but the stakes for markets and private property rights make them Yglesias’s and other market-friendly liberals’ natural allies.

Yglesias’s book suffers just a bit from the “last chapter problem” that afflicts many policy books. He lays out the problem with admirable clarity. He presents a vision of a more rational policy regime. But merely proposing that state and local governments ease off height restrictions, lot size minimums, and parking requirements elides a lot of intervening political struggle and the clever or muscular policy mechanisms necessary to make that happen.

Some who oppose greater density simply misunderstand its effects, and books like this can help to refashion the debate. But there’s undeniably a great deal of old-fashioned, unenlightened self-interest at play here. Even if exposed to the full force of Yglesias’s arguments, it’s doubtful that homeowners or historic preservationists would give up even $1 of home value, one sight line, or one mediocre example of Moorish Revival stonework for the good of the national economy or the global environment.

Yglesias proposes to tie federal infrastructure funding to partial deregulation at the state and local level. Federal leverage has worked in the past in other policy areas, and it’s an interesting proposal here. If state governments really want to unlock the benefits of greater density, they’ll either have to impose deregulation from above, with its attendant resentment costs, or they’ll have to engage in regional land use decision-making, weakening local planning boards and forcing NIMBY groups to make their case along with large employers, state policy groups, and others with wider perspective.

In big cities, high rents can be a political problem for mayors, some of whom recognize the need to increase housing supply. The Bloomberg administration has doggedly pursued over one hundred “upzonings”—i.e., increases in permissible density—around transit hubs and areas with the infrastructure to handle more people. Naturally, NIMBY groups in each neighborhood have fought these upzonings with the intensity of Iwo Jima.

In this urban context, a couple of promising potential solutions have emerged: Law professors Roderick Hills and David Schleicher, consistently two of the most interesting writers on land use issues, have proposed a “zoning budget” to alter the NIMBY dynamics typical of citywide efforts to increase density. Cities, in their proposal, would set a hard target for increases in permissible density. They would then be required to match any downward deviation from that level with an equivalent “upzoning” elsewhere. NIMBY groups would be forced to compete with one another for limited political victories. Ed Glaeser proposes something similar for historic preservation: a cap on the number of buildings that can be protected. If activists want to put a new building on the register, they’d have to free up room by kicking another building off.

Small-bore solutions aside, the real value of Yglesias’s book lies in its explanatory power, and in its potential to recast an important issue - from one that’s purely local in concern, and consequently dominated by a narrow constituency, to one in which the discussion at least acknowledges the regional, national, and global implications. An updated debate along the lines suggested by Yglesias would be a large step toward the worthy goal of balancing the concerns of local homeowners with the interests of literally everyone else.

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John Mangin is a lawyer and builder in the Philadelphia area. With Rosten Woo, he wrote What Is Affordable Housing?, an illustrated guidebook to affordable housing policy.

Comments

  • Diana on March 14, 2012 7:49 AM:

    Part of the reason that the Sun Belt boomed was cheap housing, but the larger reason why people moved there was jobs. While increasing density makes sense in some instances, it is not the only tool for relieving some of the demand for affordable housing. New Jersey attracts many homeowners because of its proximity to good schools and good jobs. A city like Philadelphia, which has an oversupply of cheap housing, has a scarcity of good jobs and good schools. As that changes, the city will activate its supply of housing, taking some of the burden off of nearby suburbs. Building up the density in high-demand areas has other consequences for the US -- it creates a few pockets of jobs, amenities, and sophistication, while increasing the gap between those areas and others. Rather than only focus on increasing density in hot markets, it makes sense to balance that need with that of increasing the quality of life in other areas to order to have a more diverse set of cities with affordable housing, good schools, and good jobs. And moreover, those cities can differentiate themselves by their geographic or cultural competitive aspects, creating a more efficient economy and country overall.

  • Robert on March 15, 2012 1:43 PM:

    In order to put this very one sided-I'm tempted to say 'mindless'- pro rant of a review in perspective one need only contemplate the meaning of this sentence: "(As a housing attorney who works in New Jersey, Iím all too familiar with this game.)"

    Missing from the review, but hopefully not the book,is any recognition that real estate development is as subject to the abuse of economic power as any other sector and thus, while the elimination of land use controls might result in more density, it would not necessarily result in more affordable housing. Margins on high end units- with marble top kitchens, private spas, and 1000 sq ft master suites - might well replicate housing inequality quite nicely and in those instances where market forces alone would not guaranty 'exclusivity', there are many other tools available, such as restrictive covenants, to accomplish the same end. I too have done work in support of affordable housing, in a neighboring state to NJ, and have found racism to be a much more difficult barrier than zoning law and its administrators to over come. It may just be that the broad public support enjoyed by land use regulation, notwithstanding the sort of attacks exemplified by this review, represents wisdom. On the other hand, if the real estate development community would stop providing almost daily examples of its short sighted and rapacious tendencies, perhaps the public would be more trusting. I will not hold my breadth.

  • Jasperinboston on March 15, 2012 6:23 PM:

    I can understand the scary thoughts that go through the mind of the average suburbanite when he/she contemplates the idea of easing density restrictions. Nobody wants a lot more traffic, or a beautiful view obstructed by an apartment tower. But none of this would be much of a problem if density restrictions were eased in general -- over as wide an area as possible. I mean if, say, an entire state (I'll use Massachusetts, my home state as an example) changed the housing construction approval process to allow for easier approvals and more density, what are the chances that the average home owner in Wellesley or Sudbury is going to have a huge apartment block built next door? Pretty slim, I'd say -- there are places that make a lot more sense to build in density. (For starters, it's surely easier to do so where developers don't have to painstakingly assemble large numbers of parcels, as they would often have to do in the suburbs).

    Also, while plenty of folks still prefer suburbs, clearly many of them exhibit this preference because of greater affordability: they simply can't get afford the same square footage or comparable amenities closer to downtown. Ergo, allowing for more house supply construction almost certainly means a big part of any population growth spurred by the easing of density restrictions will occur in already dense areas -- in highly urbanized districts.

    Finally, it should be obvious by now that tastes have changed and that, although many people want a backyard and a quiet street, increasingly large numbers of people want a less automobile-dependent, culturally stimulating urban environment in which to live. We should allow developers to give it to them. Suburbanites will thank us.

  • JasonM on March 16, 2012 5:38 PM:

    All discussion of this topic that ignores the following issue lacks all credibility.

    The middle-class will do anything possible to avoid the crime-prone inner-city people who cause "bad schools," lowered property values, and general public disorder.

    The government, through Section 8, wants to do everything possible to ensure that all neighborhoods in the country are sprinkled with a vibrantly diverse mix of Section 8 recipients.

    Restrictive covenants are outlawed. Therefore, what the middle class can do to avoid the Section 8 People is extremely limited. They can:

    1) Move to exurbs as far out as possible, beyond the reach of public transportation, with few or no apartment complexes

    2) Mandate low density through land-use regulations


    And that's about it. The passion on these issues is entirely explained by the universal middle class desire to avoid living among Section 8 People.

    Do you think I'm exaggerating? Check any relocation discussion forum (i.e. City-Data.com "Where should I move to in this new metro area?"). Check real estate prices. Check your own thought process in finding an area with "good public schools" for your children.

    Land use regulations are about the only tool the middle class has to keep out the sort of people who will cause their neighborhoods to decline.

    Once, long ago, the police could arrest people for vagrancy, but that's a whole other story...

    The rich don't have to worry about this issue because they are protected by sky-high property values.

    Thought experiment: Q: what would happen if many skyscrapers in wonderful TriBeCa lowered the rents enough so that the population of Camden, N.J., or Bedford-Stuyvesant could all move in? A: It would no longer be TriBeCa.

  • Crissa on March 17, 2012 5:06 PM:

    JasonM: That ignores that Tribeca has a greater density than nearly every town in America, due to zoning restrictions.

    Duh. There's a big difference between skyscrapers and R1 lots with houses covering all but the 5' perimeter.

    These are million-dollar homes. http://www.zillow.com/homes/64783733_zpid/ Not because they're near things, not because they cost that much to build - it's less than 200K to build each one of these - and it certainly isn't for the school, this is East San Jose. You would give up a little square footage in San Francisco for a million dollars - but you'd also give up the big swings in price and gain schools, public transit, and cheaper services.

    So no, white flight isn't the problem. We're not having trouble getting people to pay huge $$ amounts for small square footages downtown anymore.

  • Wally on March 19, 2012 3:32 PM:

    Unusual topic for Washington Monthly because this one actually effects the way we actually live.

    I have not read Yglesias' book but Mangin makes some very good points. I previously was California coastal land use lawyer - but advising the local government, not developers. I have experienced just what Mangin says. Remember that typically, Planning Commissioners are appointed by elected members of the City Council or County Board. Those elected officials and their appointed allies are extremely reactive to complaints by their wealthy constituents. These officials constantly overrule the Planning Dept. professionals to appease, well, anyone. This leads to the NIMBY dynamic that is prevalent in any middle or upper class community.

    There are several comments by Mangin and a poster on San Jose, where I know reside. San Jose had some of the worst land use planning on the continent; its sprawl is worse than L.A.'s in many ways. But like L.A. in the 60s and 70s, prosperity in the 90s/00s has made land more valuable in San Jose and it has now become more dense. And this is the Occupy angle that Mangin refers to. While Apple, Google, Facebook and Twitter make billions for their shareholders, they are now starting to complain about paying that back to the community by funding needed infrastructure for dense growning city. So, the Buffet rule should be local too.

    Another way to control the sprawl is by greenbelts/urban limit lines/regional habitat conservation plans. When passed, they don't gore existing homeowners.

    As far as the urban flight/racism angle, I don't know where Jason is from, but that is nonsense in most places in California. Land/commute times/desire for urban lifestyle is simply too valuable here. There is no doubt that many individual communities try to eliminate multi family housing but it is mainly to prevent increases in traffic and construction and slow down change to quiet communities, aka, the 21st century.

  • Michael on March 25, 2012 4:17 PM:

    One caveat: with higher density comes the need for infrastructure, both physical and social, that can handle it. This isn't a free lunch.

  • cwolf on March 29, 2012 11:08 PM:

    There is already too much "development".
    Rents in highly built up places are also high or in many cases higher than in well planned places.. (Think Manhattan or San Francisco)

    In general rents are high because the wrong people own property or in many cases greedy landlords own too much property.

    Rents are too high because property is theft.
    Shed your tears somewhere else.