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Balancing The “Zoning Budget”

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"Balancing The “Zoning Budget”"

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Roderick M. Hills, Jr. and David Schleicher have a new paper:

The politics of urban land use frustrate even the best intentions. A number of cities have made strong political commitments to increasing their local housing supply in the face of a crisis of affordability and availability in urban housing. However, their decisions to engage in “up-zoning,” or increases in the areas in which new housing can be built, are often offset by even more “down-zoning” or laws that decrease the ability of residents in a designated area to build new housing as-of-right. The result is that housing availability does not increase by anywhere near the promises of elected officials.

In this essay, we argue that the difficulty cities face in increasing local housing supply is a result of the seriatim nature of local land use decisions. Because each down-zoning decision has only a small effect on the housing supply, citywide forces spend little political capital fighting them, leaving the field to neighborhood groups who care deeply. Further, because down-zoning decisions are made in advance of any proposed new development, the most active interest group in favor of new housing – developers – takes a pass on lobbying. The result is an uneven playing field in favor of down-zoning.

Drawing on examples of “extra-congressional procedure” like federal base closing commissions and the Reciprocal Trade Act of 1933, we argue that local governments can solve this problem by changing the procedure by which they consider zoning decisions. Specifically, they should pass laws that require the city to create a local “zoning budget” each year. All deviations downward from planned growth in housing supply expressed in the budget should have to be offset by corresponding increases elsewhere in buildable as-of-right land. This would reduce the degree to which universal logrolling coalitions can form among anti-development neighborhood groups and would create incentives for pro-development forces to lobby against down-zonings in which they currently have little interest. The result should be housing policy that more closely tracks local preferences on housing development.

That sounds about right. The basic pattern is that on any individual question, we over-weight the preferences of the immediate neighbors which leads to a citywide equilibrium of less new development than we collectively want. The proposal here is for a kind of statutory PAYGO for zoning to halt that undershooting process.

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