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?