Do away with zoning?

I’ve been reading a book called “The Noblest Triumph” by Tom Bethell. The book makes the case that the key to prosperity is strong property rights. That is to say that as long a people can own property, sell it, buy it, and pass it on to their heirs, America will remain prosperous.

One interesting chapter I just finished makes the case that zoning laws are unnecessary, and in fact drive up the cost of land and houses and other buildings, thus raising a barrier between the poor and ownership of property. Some cities, Houston for example, have little or no zoning ordinances. In fact, voters in Houston have rejected attempts to create new zoning ordinances as recently as 1993. At the time Reason magazine reported this:

Houston, the fourth-largest city in the country, with 1.6 million residents, has no zoning ordinance. All property owners must adhere to 18 land-use ordinances, largely dealing with issues of health and safety, and most homeowners are bound by additional private restrictions written into their deeds. Owners of private residences, for instance, might be obligated not to use their property for commercial purposes or multi-family dwellings; they might be forbidden to make exterior alterations such as the installation of satellite dishes. Deed restrictions are enforced by the city.

One argument against abolishing zoning ordinances is that people fear their neighbors will do something to damage their property value. However, the “Coase theorem” states that as long as transaction costs are low, property owners will work out disputes themselves without the need for government interference. Therefore, government should work to keep transaction costs low and stay out of property disputes.

So why shouldn’t Georgia adopt the Houston Texas approach to property? What would the impact be if counties and cities did away with most zoning ordinances?

16 comments

  1. 4ofspades says:

    I believe there are numerous counties in Georgia that do not currently have zoning. They tend to be rural. Maybe Bowersville can help out here, because I believe one or two counties in his neck of the woods don’t have zoning.

    The Houston example is interesting, but I think the challenge is that there are not currently those type of deed restrictions in the urban areas of Georgia. What role to home owners associations play in Houston?

  2. Bill Simon says:

    So, Buzz, let me ask you: Would you be in favor of a string of Insurrection stores up and down 141 and P’tree Industrial?

    Because, that is what parts of Houston look like. Strip malls consisting of a dry cleaners, pizza show, porn mag shop, comic-book trading shop, etc.

  3. 4ofspades says:

    Bill,
    You forgt to mention the nails shops, if there’s a dry cleaner, there must be a nail shop.

  4. BB says:

    Thanks for the recommendation Buzz. In conjunction with zoning laws (if we must allow government this control of our private property) there should be protection in the form of inverse condemnation i.e. Oregon Measure 37 (SB30 introduced by State Senator Chip Pearson during the ’06 session).

    Generally I find zoning laws to be another form of over regulation used mostly by newcomers in a community to prevent generational landowners from getting reasonable value for their property. Those living in high density subdivisions that cause overcrowded schools, heavy traffic, etc. are the loudest when it comes time to point fingers at those who have been in a given community the longest when they decide to rezone for sale to an “evil” developer. We see it all the time in Cherokee County.

  5. buzzbrockway says:

    Bill,

    We have that in parts of Gwinnett and parts of Atlanta now – with zoning ordinances. The question is would we have more porn mag shops than we have now. Probably, but I imagine property owners could take care of that in many cases. There are strip mall owners who don’t allow certain types of shops in their developments – pawn shows for example. I would imagine some strip mall owners would prohibit porn mag and other such stores, which they would be well within their rights to do. That situation is much better than the current situation where the government says “no,” they get sued and the ordinance is thrown out (as happened recently in Gwinnett) and there is no restraint on such shops.

    Now you know why I will never run for County Commission – I simply could not get elected. 🙂

  6. GTdem says:

    According to Coase, property owners will work out disputes themselves, but that doesn’t mean the bad thing that damages their property value doesn’t still happen. It just means that they are compensated for it.

    And keeping transaction costs (Lawyer fees, etc) low enough is a huge problem.

    Also the initial assigning of property rights is an issue. Does the porn store have to pay the neighbors to set up shop, or do the neighbors have to pay the porn store owner to never open?

  7. duluthmom says:

    Quick ?

    How does the author show that zoning, versus natural market forces, impacts or increases the cost of property ownership?
    Overall the entire housing market in TX is cheap, not just in Houston.
    http://money.cnn.com/pf/features/lists/hpci_data/

    It is hard for me to imagine that zoning has much impact as the author alleges.

    As for this:
    “However, the “Coase theorem

  8. Bill Simon says:

    4ofSpades,

    You are correct. I did forget about the nail shops in strip malls. Nail shops, dry cleaners, pizza, and porn. The only thing the strip malls have truly missing now is a store that buys and sells politicians….but, I guess those stores are located high in the comfy surroundings of law firms like McKenna Long & Aldridge. 😉

  9. GTdem says:

    Duluthmom,

    Your concerns are valid. See my post above. The Coase theorem does not stop the bad things from happening. It just means that people are compensated for the bad thing happening.

    In the case of your friend, the gas station owner would have had to compensate your friend for whatever damage he caused. Your friend would be the one to determine how much it damaged her. If the amount your friend requested was low enough the gas station owner would pay it and expand his station. If the amount was too high he wouldn’t pay it and would not expand. This is the case if the property rights were initially ‘assigned’ to your friend. If they were initially ‘assigned’ to the gas station owner. Your friend would have had to pay the gas station owner not to expand or she would not pay and the station would expand.

    It doesn’t matter who was initially assigned the property rights, the bargaining outcome will be the same in either case.(this was the point of Coase’s original paper) However, the original owner of the rights will have been compensated if they choose to give up their right.

  10. duluthmom says:

    If in theory, bargaining does work to resolve all zoning disputes, one would logically believe that this would require having an attorney to work on your behalf, right?

    If in my gas station situation above, the property owner didn’t have the means to get adequate counsel and the business owner did (or vice versa), you’d hardly have an equitable situation when final compensation was determined.

    When we lived in WI (yeah, I’ve lived in a lot of states) our neighbor tried to drag us to court over installing central air in our 40 year home because he didn’t like the sound AC units would make when his windows are open. (I swear I’m not making this up.) Getting representation for those kinds of disputes is costly; and in this latter case, how would you determine his “loss” due to AC noise, if we were required to pay him under that theory.

    I’m not saying that it has no merit at all, I just see way too many problems inherent in the theory’s practicality.

  11. JP says:

    We certainly couldn’t end up with much more of a sprawling, unplanned, congested megalopolis than Atlanta already is.

  12. bowersville says:

    If any body has a desire to live in any county, or any city without any land use deveolpment plan(beyond State and Federal minimums) or zoning, you don’t understand zoning or especially the lack there of. If there is no zoning, it is likened to the wild west, anything goes. These disputes are never resolved by the adjacent property owners. They are resolved by the Superior courts and then ONLY jurys award damages. Because most of the jurors, who come from the registered voters , who have consently voted against zoning and believe a man ought to be able to do what he wants on his own property, it is extremely difficult to proove lose of property value damages and to retrieve attorney fees, even when you win. Then there’s the appeal process to the Georgia Supreme Court, and three years later remanded back to the Superior Court. So if you want to be a fool like me and invest your future in a county that doesn’t have zoning and depend on being able to work out disputes among your neighbors, I have 85 acres in Hart County on the Corp line of Lake Hartwell I’ll sell you. Footnote, If you believe covenants on your property, a strong neighborhood association will protect you, you are wrong. You can only enforce exact covenants, if they differ at all, no matter how minute, they can’t be enforced. So some $200,000 latter, you finally have peace from some idiot who believed he could operate a fifty acre, 7 day a week, motocross track on Lake Hartwell. Zoning is not about affordable housing, it’s about protecting existing property owners, If you want to chance having a nuclear waste dump locating next to you, move to a county with no zoning.

  13. bowersville says:

    One other note, Deed restrictions(private property rights) are not enforceble by any government entity in Georgia, other than a covenants challenge in Superior court. In our particular case there were three different neigborhood sets of covenants at play on our cove, and one property with separate covenants that none of us could enforce.

  14. buzzbrockway says:

    I’m not arguing for the wild west bowersville, but through the zoning regulations government takes control over the most minute details of everyday life. Houston Texas has only 18 ordinances dealing with property and there are no nuclear waste dumps in residential areas there.

    Why shouldn’t Georgia’s counties and cities look to eliminate most zoning ordinances and let people do as they please on their own property within broad limits?

  15. bowersville says:

    Buzz,
    I’m not advocating government taking over the most minute details of land usuage. Ordinances, though effective, do not address nuisance effectively. We have ordinaces here. They are mostly designed to prevent so-called unwanted businesses. We even have state law regarding Public Nuisance. The county, through it’s attorney, made the decision that even though 144 property owners were adversly affected, it was not a public nuisance. They decided it was a private matter to be resolved by the Superior court. As far as the dump issue, go back and look at the situation in Tellifarro(sp?) county, Crawfordville, with no zoning, no ordinances to prevent a massive dump from coming in. The only way it was stopped was through the EPD. And this one too was appealed to the Georgia Supreme Court. Nuclear dump? I don’t know what county it’s in over the line in South Carolina, but those poor souls have been fighting the continued dumping of nuclear waste for years. If the Counties and Cities want to take up the fight on nuisances, maybe it will work, but it has been my experiece that they won’t.

  16. Joeventures says:

    One problem with zoning today is that it goes beyond the original intent. Government can justify zoning laws as an extension of police powers — to protect the health, safety and welfare of the community. Separation of uses is a primary function of zoning (though it’s not the only function by any means). Zoning would be more effective if the primary function was to separate incompatible uses, not every use.

    For example, it wouldn’t be a particularly good idea to place a coal power plant in the middle of a neighborhood. Unless, of course that neighborhood were populated with coal power lobbyists.

    Houston, meanwhile, is by far the ugliest city I’ve ever visited. I went there a while back for my best friend’s wedding. The theme of the whole weekend seemed to be, “let’s see how big Houston is,” because it took more than half an hour to get anywhere. I think we spent more time in the car than anything. It was depressing. Then again, this is just my personal outlook on Houston — not to be confused with thoughtful analysis 🙂

    It would probably be better to reform zoning than get rid of it alltogether. Midtown Atlanta would be one example, where its revitalization began with a complete rewrite of the zoning codes for the area.

Comments are closed.