April 20, 2012

Zoning: what it is and why it fails

Filed under: Bureaucracy, Economics, Education, Government, Law, USA — Tags: , , , — Nicholas @ 08:05

Jonathan Rothwell in The New Republic on the palpable failure of zoning:

While most political economists think of institutions operating at the national or even state level, there is one essential but overlooked institution operating at and within the metro scale: zoning.

In a new report I argue that its impacts are destructive. Zoning laws are keeping poor children out of high-scoring schools, degrading education, and weakening economic opportunity.

Anti-density zoning — embodied in lot-size and density regulations — is an extractive institution par excellence. Through the political power of affluent homeowners and their zoning boards, it restricts private property rights — the civic privilege to freely buy, sell, or develop property — for narrow non-public gains. Property owners in a jurisdiction benefit from zoning through higher home prices (because supply is artificially low) and lower tax rates (because population density is kept down, as school age children are kept out), while everyone else loses.

[. . .]

Dragging down the quality of education available to poor children is not only unjust, it hobbles national economic gains and therefore harms even affluent people. Young black and Latino adults earn thousands of dollars more each year, and are far more likely to obtain a college education, if they grow up in metro areas where blacks or Latinos attend high-scoring schools — like in Raleigh or San Jose — compared to their counterparts in metro areas with low-scoring schools — as in Philadelphia or New Haven. Impressive research from Raj Chetty and other economists has also found that the quality of one’s school environment — measured by teacher or peer performance — causes large long term gains in earnings and labor market performance.

Previously, my work has found that zoning laws inflate metro-wide housing costs, limit housing supply, and exacerbate segregation by income and race. Other work faults these laws for their damaging effect on the environment, since they make public transportation infeasible and extend commuting times. With a few possible exceptions (see Michelle Alexander), it’s hard to think of an existing political institution in the United States that is more destructive of human and social capital.

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