Zoned Out

I once knew a man who was finishing his basement so that his daughter and son-in-law could live there. I spent a lot of hours down there with a nail gun before the city planners nixed the project. My in-laws in Modesto, California, had to move out of their house into a mobile home on their own farm, because their kids needed a place to live. The law, for some reason, allowed them to put a mobile home there if seniors would be living in it, but not to accommodate a young family.

In run-ins with zoning laws, ordinary people encounter the perversity of government firsthand in ways that should make them receptive to the message of freedom and property.

You see, modern American society does not have a free market in land. Government interference with land use causes many of society’s problems. For example, in recent decades, people have started moving out of richer states into poorer ones, as high-productivity metropolitan areas refuse to accommodate population growth, driving housing prices and rents sky-high. While expensive real estate reflects high demand, the distortions originating with urban planners have made it difficult for young people to get a start in life. Artificial limits on supply, including zoning laws, building-height restrictions, parking requirements, and rules on maximum occupancy and minimum lot size, drive prices higher.

Without restrictions like these, real estate developers could build more high-rises and townhomes. Housing supply would rise, prices and rents would fall, more affordable cities would attract more people, and metropolitan productivity would raise national GDP.

Exclusion Zones and Environmental Harm

Zoning can be a form of class warfare when rich people deploy government power to keep poor people out of their field of vision. In the early twentieth century, some officials used zoning laws to exclude racial minorities from white neighborhoods. Today, class has replaced race as a main motivator for exclusion. Even when officials claim other intentions, zoning’s effects are the same. Government interference with land use blocks people from stretching scarce dollars by sleeping more people in a room, for example, or converting single-family homes into multifamily homes. High property taxes and onerous construction codes make housing less affordable for everyone, especially the poor.

Zoning also harms the environment by forcing people out of cities, where they live less environmentally friendly lifestyles. Segregating residential, industrial, and commercial land use forces people to live farther from the places where they work and shop, causing more automobile dependency, asphalt, and urban sprawl. A free market in land would not eliminate sprawl, of course. Some people want a house and a yard. But the rise of suburbia in post-WWII America was driven not only by preferences, but significantly by zoning laws.

This Land Is Their Land

Zoning tends to have an antidensity bias, but it often frustrates lovers of the rural life, too. When I moved to central California two years ago, I took a liking to the orchards and vineyards that surround the city, and looked for places in the countryside. That should have been easy. Agriculture generates low value per acre compared to residential rents, so people like me, with city jobs but a taste for the rural life, could easily offer landowners more than the land’s agricultural opportunity cost.

Unfortunately, the Fresno County Division of Public Works and Planning has zoned most of the land here “exclusive agricultural” in order “to protect the general welfare of the agricultural community from encroachments of non-related agricultural uses which by their nature would be injurious”—how, pray tell?—“to the physical and economic well-being of the agricultural district.”

The name of this regrettable agency contains the telltale word planning. It is curious how often America fails to learn the lesson of its own victory in the Cold War: Markets are better than planning. Read a zoning ordinance and you will quickly get the strange sense of reading a Gosplan document. Why must non-agricultural operations be limited to 10 percent of a plot of land and three employees? Why are riding academies permitted (subject to director review) but arts and crafts schools prohibited? Why not leave such decisions to the market?

Externalities and Other Canards

The only legitimate economic rationale for zoning is that land use often has positive and negative local externalities. What I do with my land can affect my neighbors’ quality of life. If I fill my front yard with flowers, the whole street benefits. If I fill it with trash, I spoil my neighbors’ street views and property values. A factory next to a suburb is an eyesore. A cafe may enliven a neighborhood, but patrons compete with residents for scarce parking. In the face of local externalities, the usual theorems about market efficiency cease to hold, and zoning laws can, in principle, raise social welfare by mitigating activities with negative externalities and/or encouraging activities with positive ones. Possibly, though I doubt it, the Fresno County Division of Public Works and Planning could find some feeble argument from local externalities to justify allowing riding academies but not arts and crafts schools in “exclusive agricultural” districts.

But there’s a better way to deal with externalities, elucidated by Nobel Prize-winning economist Ronald Coase in his 1960 article “The Problem of Social Cost.”

Coase considered, as an example, the problem of a rancher whose cows sometimes stray into the neighboring farmer’s field and destroy his crops (a negative externality). Does the farmer have a claim against the rancher, or do the rancher’s cows have a right to roam where they will? Should fences be built? Should one of them halt operations? What is the efficient solution? What is the just solution? Coase claimed no insight about justice, but he showed why, if efficiency is our goal, it does not matter whose side the court takes, as long as (a) rights are defined clearly, and (b) they are tradable.

Suppose the following monetary values:

Rancher’s profit: $10,000

Farmer’s profit: $20,000

Damage to crops: $15,000

Cost of fencing: $15,000

The socially efficient solution here is for the rancher to halt operations. Fencing is too expensive. The rancher’s profits are lower than the farmer’s, and too small to offset the damage to crops.

Now, suppose a judge sides with the farmer, making the rancher liable. The rancher will shut down because his profits do not suffice to buy out the farmer or pay for the costs of fencing. But if the judge sides with the rancher, he will still shut down, because the farmer will pay him a little over $10,000 to do so. Either way, we get the efficient solution.

If, instead, the values are . . .

Rancher’s profit: $50,000

Farmer’s profit: $10,000

Damage to crops: $15,000

Cost of fencing: $15,000

. . . then the farmer will shut down, either because—if a judge rules against him in his dispute with the rancher—crop damage is causing him to lose money, or because—if a judge rules in his favor—the rancher buys him out. Whatever the efficient solution is, Coasean bargaining will find it, once the law clearly defines property rights in causing, or in being free from, externalities.

Bargaining Our Way to Pleasantville

Zoning laws should be replaced by a free market in land, with Coasean bargaining to deal with local externalities. The solution would be imperfect, due to transaction costs. But the system would get better over time, as entrepreneurial developers wanting to gentrify or commercialize neighborhoods would learn the best ways to acquire, from residents, the appropriate rights—perhaps involving complicated option contracts or Elinor Ostrom-style solutions to commons problems. And all of these alternatives would be supported by common-law approaches to dispute resolution and contract, which have been thoroughly crowded out by municipal codes.

By contrast, centrally planned systems tend to ossify over time, as they grow increasingly more starved for the market-pricing information that could provide signals about the efficient use of resources. Of course, the local knowledge of people on the ground is the foundation of community. That too is lost when town planners purport to know more.

Market flexibility is especially important now because technology wants to reorganize cities. Already, in an age of smartphones and laptops, when one hardly needs bookshelves or desks, young people with large student loans who want to live in Manhattan might find six-in-a-room lifestyles quite tolerable for a few months or years. Let the market decide. On the other hand, solar power and mobile data could open up attractive lifestyles in the foothills of the Sierras if they weren’t zoned “exclusive agricultural.” Let the market decide. Let the people decide.

In the future, cheap driverless taxis will make acres of urban parking obsolete. Even the home kitchen might become optional when driverless cars offer cheap 24/7 delivery of hot restaurant meals. Let the market decide. We need to get the old zoning boards out of the way and leave people and markets free to discover the lifestyles that best suit them in the 21st century.


Nathan Smith

Nathan Smith is a professor of economics and finance at Fresno Pacific University and the author of Principles of a Free Society and Complexity, Competition, and Growth. He blogs at Open Borders: The Case (openborders.info).

This article was originally published on FEE.org. Read the original article.

How to rekindle the forgotten art of Play

What play can teach us about our children and ourselves.

What is play? Is it something that we learn, is it taught? What role does urban design have on our propensity for playing? This article holds some clues and helps us get back in touch with play. Through play, we also come back to ourselves.

via Play Hints At Who We Are — Laura Grace Weldon

Counter-flow lanes: curbing the effects of one-way streets in Mexico City

Bus_lanes_on_Calle_des_Balderas,_Mexico_City

Dedicated “contra-flow” bus lanes on Calle des Balderas, seen looking south from the Avenida Juarez in Mexico City.

On a grid of mostly one-way roads with mixed traffic, so-called counterflow lanes created two-way bus service, helping pedestrians avoid walking roughly 1 km (0.62 miles) to other main arteries to take a bus in the opposite direction.

But a growing recognition of the dangers of such counterflow lanes is leading modern-day Mexico City to re-think the configuration.

Full article can be found here.

Maybe, just maybe, the city might instead decide to conduct an area-wide traffic analyze to look into the possibility of changing the direction of these large, one-way streets and turn them into two-way streets with full amenities, such as those found in Complete Streets policies.

Complete Streets is the name of a design concept that sees the street face as part of the urban fabric, not just as a “car sewer”. The goal of a complete streets system is to accommodate various modes of transportation while slowing down car traffic. These streets hark back to a time when the street face was for everyone, including walkers, joggers, cyclists, transit riders and car drivers.

Lead in Ohio Villages’ Water Went Uncurbed for Months, State Says – The New York Times

Ohio’s Environmental Protection Agency said Tuesday that even after some corrective action had been taken, tests showed that water from many faucets and drinking fountains in public schools in Sebring still showed measurable levels of lead.

Source: Lead in Ohio Villages’ Water Went Uncurbed for Months, State Says – The New York Times

Florida Beachgoers Cling to a Right to Make the Sand Their Driveway | The New York Times

22daytona-web4-articleLarge

Beach driving, although popular among locals and Orlando visitors, has long been a subject of dispute. Environmentalists dislike it, saying it harms plant and animal life. They threatened to sue over sea turtles, which nest in the sand, and the county negotiated an agreement. Cars must now stay clear of nesting areas.

Others see such driving as an unnecessary danger. The beach has grown more crowded in spots because it is narrower than before and only 17 miles are open to cars. Since 2005, three people have been killed on the beaches, including two children, and 67 have been injured, according to Volusia County records.

Read more here.

Planet earth vs. roads: The epic conflict that will define the future of the world – Salon.com

L.A. Road Network

The great age of road-building is only beginning. By 2050, we will have added 15 million miles of new road to the planet — a 60 percent increase in four decades over our current total, amassed over the past 5,000 years. Nine-tenths of that network will be built in the developing world – in the basins of the Amazon and Congo Rivers, and the jungles of South Asia and Oceania.

via Planet earth vs. roads: The epic conflict that will define the future of the world – Salon.com.

The Bundy Ranch Video Facebook Wont Let You See? | Ben Swann Truth In Media

Bundy vs Bureau of Land Management

1KNEVADA, April 14, 2014– The image above may well go down in history. We can all recall a time when a black woman named Rosa Parks defied law and won. No need exists to paint the picture. You already know it. You can already see her. Here we see a modern representation as Americans awaken to the insidious growth of our federal Creature. Over the weekend, a fierce standoff between Bundy Ranch militiamen and the Bureau of Land Management BLM came to an end– For now.

via The Bundy Ranch Video Facebook Wont Let You See? | Ben Swann Truth In Media.

More on the High Cost of Infrastructure | Planetizen

Economists really need to become an integral part of the comprehensive planning process. America’s infrastructure is crumbling. And there are fewer dollars to replace it all, all the while cities continue to expand their borders, annex lands, build ring roads and highways, widen roads, ad infinitum. The salary of an economist will be a drop in the bucket compared to the cost of implementing pie-in-the-sky comprehensive plans. Business owners, property owners, community stakeholders will need to shore up their resources and contribute to the maintenance and funding of new roads and bridges as their home cities grow.

Shore Parkway bikeway / greenway crumbles into Sheepshead Bay, Brooklyn, NY
Shore Parkway bikeway / greenway crumbles into Sheepshead Bay, Brooklyn, NY

A recent editorial in Atlantic Cities laments the regulations and policies that have, according to the author, driven up the costs of infrastructure investments in the United States.

Scott Beyer launches his investigation into the high costs of infrastructure with an acknowledgement of the difficult partisanship that has crippled infrastructure development in recent decades. Beyer’s insight into the gridlock: the political discord comes down to a question of how to operate the infrastructure once it’s been delivered.

The crux of Beyer’s examination is a list of policies, imposed by the federal government and, according to Beyer, strengthened by the Obama Administration. The list includes Davis-Bacon Laws, environmental reviews, and project labor agreements. After detailing the items on the list, Beyer poses the question of whether the secondary policy goals of employment and unionization should come at the expense of building or maintaining infrastructure. 

via More on the High Cost of Infrastructure | Planetizen: The Urban Planning, Design, and Development Network.