The city without zoning

By Scott Sumner.

"Houston is the only big American city without zoning. Some people argue that Houston is effectively zoned, as many neighborhoods have deed restrictions that limit development. But in his new book on zoning, M. Nolan Gray points out that only 25% of Houston is covered by those contracts, and even in those cases the restrictions are less rigid than with explicit zoning laws.  So how are things playing out in Houston?

For the most part, Houston’s positives are linked to its lack of zoning, and its negatives are essentially unrelated to zoning.  Many people visualize zoning as somehow protecting people from negative externalities.  In fact, regulations against public nuisances have been around long before zoning was first adopted in 1916 (in NYC and Berkeley), and even Houston has many such rules.  Here’s Gray describing Houston:

Pursuant to city regulations, slaughterhouses—an early zoning boogeyman—must remain 3,000 feet from the nearest resident; oil wells cannot be within 400 feet.  Strip clubs and other adult-oriented businesses cannot be within 1,500 feet of a school or church; liquor stores and bars cannot be within 300 feet (Evidently, lust is more offensive than gluttony.)  And the location of billboards is heavily proscribed throughout the city.

So how does Houston benefit from a lack of zoning?  Think about how cities were built before zoning was created.  The densest area (say Manhattan) is in the center, with high-rise office buildings.  A bit further out (say Brooklyn) you have townhouses and big apartment buildings.  Even further out (say Long Island) you have lots of single-family homes.  

After zoning was adopted and then made much more strict over the following decades, this natural growth pattern was artificially halted.  In a free market, central Los Angeles would have many more large apartment and condo buildings. 

Central Houston has evolved more naturally than Los Angeles, as the city has grown into one of America’s largest metro areas (with roughly 7 million people, 2.3 million of which live right in Houston.)  In central Houston, residential lots with one old ranch house are rapidly being converted into three modern townhouses.  Lots of large apartment buildings and condos are also being built on the near west side.  The city is continually being remade, in a style appropriately reflecting its growth into a major city.

In the tweet below, you can see how in just two decades Houston’s permissive permitting rules allowed a residential neighborhood to become much more dense.

You might be thinking, “But I like single family homes with a large lawn.”  In that case, I have good news for you.  In a free market like Houston there are still plenty of such neighborhoods (and far more in the suburbs.)  At the same time, the market is telling us that there are plenty of people who prefer living in dense neighborhoods near the center of major urban areas.  Unfortunately, most zoning plans make such neighborhoods illegal. 

Not all of Los Angeles County should look like Brooklyn.  But LA deserves a Brooklyn-like area close to its major job centers.   

Houston is not as attractive a city as LA (or even Austin.)  It’s hot, humid, flat, prone to flooding, and (AFAIK) has the world’s largest collection of petrochemical facilities.  Yet despite all of those negative characteristics, lots of people move to Houston each year.  (Both affluent and working class migrants.)  That’s partly due to its housing policies, which keep prices reasonable despite the extraordinary growth in population.   

PS.  Houston has had three referenda to allow zoning, and it was rejected all three times.  Gray suggests that this is partly because working class voters tended to oppose zoning, and more affluent neighborhoods were bought off with the promise that private deed restrictions would continue to be enforced.  In American politics, one never achieves anything without compromise."