‘Zoning Rules’ at Cato Events

A few weeks ago the Cato Institute had an event where William Fischel, an economics professor at Dartmouth; Matt Yglesias of Vox Media and Robert Deitz of the National Association of Home Builders, gathered to discus Fischel’s new book, Zoning Rules, published by the Lincoln Institute of Land Policy.

I couldn’t attend in person, but I was able to take in the livestream and did some live Tweeting.

While Fischel had a very pointed critique of land-use regulation, he was surprisingly in favor of comprehensive zoning. He attributed it to the automobile, said they threw out thousands of years of property law and said it became much more restrictive in the 1970s. In that decade, high inflation collided with nascent environmentalism to make land use much more restrictive.

According to Fischel, that’s when the idea of the house as an investment started to take off. It was like a hedge against inflation. The flip side of that coin, he added, was that since that time inflation has proceeded much more slowly while environmentalism has come around to the idea of urban density as good for the environment.

Unfortunately, land use regulation hasn’t caught up with this understanding, nor have most neighborhoods, with the result that car-centered greenfield developments continue to be built instead of transit-oriented developments in cities.

Matt Yglesias stole the show, however, with some really good stuff about zoning hurting labor mobility and how it’s wrong to allocate people where land is cheap versus where their labor is valuable.

Another interesting thing he said was that New York and San Francisco aren’t really experiencing building booms, people just think they are because they see lots of cranes. I will have to check for Boston.

Robert Deitz had an interesting point about how regulation is 1/4 of the cost of a home. However, he seems to have missed the increases in minimum lot size (to say nothing of the increase in average house size) and he had a point about the mortgage interest deduction applying to condo downtown as much as to an SFDR home in a subdivision, but he missed the fact that subsidizing mortgages that way enables people to buy bigger houses on bigger lots, encouraging sprawl and car-dependency.

One thing that nobody talked about was transportation, which was disappointing, because there’s a feedback loop between zoning and transportation: some 19th century traction magnate buys up some farmland and builds a wide street with a streetcar line on it and smaller streets branching off to funnel people to the line, which he fills with houses. He wants people to ride his streetcar as much as possible, so he only builds a few commercial spaces, but he keeps them concentrated near the line’s stops and he keeps industry away. He sells the houses, people ride the line all the time and he profits handsomely.

Then the car comes along and with the street layout still funneling people towards the main, wide street, it soon fills up with cars. The streetcars get stuck in traffic all the time and lose ridership, so the line goes bankrupt. People can’t park at the businesses so they stop going to them and they go bankrupt. There’s so much traffic and so little parking that people start moving out of the neighborhood and into the new suburb.

The new suburb has wider main streets, quiet side streets and has all its commercial opportunities on a very wide road with a lot of free parking, but soon eeven the very wide streets are clogged with traffic and the parking lots are full, so people move out to a newer suburb, ad infinitum.

Seperation of uses and a hierarchical streetgrid do not work well with one another.

If anything, this is even more of a problem in cities trying to move away from car-dependency. In Boston, for example, the MBTA is run by the state, while land use regulation is done at the city and town level. This means that in suburbs like Quincy and Newton and Brookline, they build lots of parking and wide roads or sparsely inhabited posh neighborhoods around rapid transit stations and further out, towns with commuter rail stations have nothing built near them.

However, when I asked Yglesias about it on Twitter, he said it wasn’t a big deal. Oh well. I beg to differ.

Watch it here.

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