The Zoning Strait-Jacket: The Freezing of American Neighborhoods of Single-Family Houses

Abstract

Municipal zoning practices profoundly shape urban life in the United States. In regions such as Silicon Valley, regulatory barriers to residential construction have helped raise house prices to roughly ten times the national median. These astronomic prices have prompted some households to move to places, such as Texas, where housing is far less expensive. I have been engaged in an empirical study of zoning practices in Silicon Valley, Greater New Haven, and Greater Austin. This Article presents one of my central findings, induced from those metropolitan areas and elsewhere: local zoning politics typically freezes land uses in an established neighborhood of detached houses. The consequences are profound. Single-family neighborhoods constitute a solid majority of urban land in the United States. Within these frozen neighborhoods, real estate markets cannot respond to changes in supply and demand conditions.

The Article marshals a variety of evidence to prove that the zoning strait-jacket exists. It also discusses possible exceptions to it. The most plausible is proximity to a newly opened transit node, an event that may transform zoning outcomes, even in a neighborhood of houses. Building on the work of others, notably William Fischel, I explore the dynamics of local zoning politics. The goal is to develop an overarching theory that is consistent with the larger study’s three basic empirical findings: that suburbs in Greater Austin, Texas, are relatively pro-growth; that, even in Greater Austin, zoning policies freeze land uses in established neighborhoods of detached houses; and that the opening of a new transit node sometimes can loosen the zoning strait-jacket.

Keywords: Zoning, Exclusionary Zoning, Land Use, Housing, Local Politics, Neighborhoods, NIMBYism

JEL Classification: D72, K11, N62, N92, Q24, Q28, R14, R31, R38, R52