IMAGE: A zoning map, as imagined by ChatGPT. If only they were this colorful in real life!
This story by Andrew Burleson appeared on StrongTowns.org on September 25, 2024. We are sharing it in two parts.
Over the course of the 20th century, we’ve gradually stripped away the concept of property rights. In 1900, if you owned land, you could generally build whatever you wanted on it. Today the government determines the size, shape and design of buildings, as well as what activities are allowed inside them. This level of regulation is so widespread that the few exceptions — most famously Houston’s lack of land-use zoning — are noteworthy and much discussed.
We’ve had a hundred years to get used to this, so we’re not shocked by it anymore, but we should be. Most American cities today employ near-Soviet levels of central planning to micromanage the use of property. Unsurprisingly, we have crippling shortages of shelter and high rents.
Kevin Erdman put this very poignantly:
One way I would put a lot of the high costs that have crept into American housing is that zoning and land use regulations basically make the cost of many potential projects infinity, because they are simply prohibited. So, high costs end up being a negotiating tool for the developers. “What hoops can we jump through to get the cost of this project from infinity to $2 million?” Maybe in an unburdened market, it would only cost $1 million to build that project. But, $2 million is better than infinity. And, if a city has obstructed enough other housing, maybe $2 million can still bring in enough rent to justify the cost.
The story of how we got here is long and complicated, and many have told it, so I won’t attempt to recap it today. The good news is that the tide is finally turning, largely thanks to three successive movements for change.
First, the New Urbanists helped us all realize that our beloved historic districts in American cities and small towns were not obsolete but rather illegal. They explained that the shape of our buildings and neighborhoods is no longer the product of a designer’s creativity, but largely the mandatory output of a regulatory formula set by city legislation.
Second, Strong Towns and other media organizations built on the knowledge of the New Urbanists and raised the salience of dysfunctional local government to a much wider audience of concerned citizens. Twenty years ago, these topics were the niche interest of architects and planners; today, there’s a much wider pool of nonprofessional interest and activism.
Finally, the YIMBY movement emerged with an effective strategy to organize concerned citizens and effectively pass legislative reform.
The crucial insight of the YIMBY movement is that policy change hinges on a fundamental asymmetry: The negatives of new development fall overwhelmingly on the immediate neighbors, while the benefits are diffused across the entire region. Similarly, if only one jurisdiction in a region liberalizes, the entire region’s pent-up demand will concentrate on that single outlet. Broad reform is therefore difficult at the local level.
However, the YIMBY movement has shown us that this collective action problem can be addressed at the state level, where the diffuse benefits clearly outweigh the costs. So a key YIMBY strategy has been to use state preemption to remove barriers to housing across an entire state all at once. This has led to broad, substantial reform, and the movement is gaining momentum as it accumulates wins.
So, what changes are coming in the future, and what impacts might they have?
Single-Family-Only Zoning Will Be Relaxed
One of the first targets for reformers is single-family-only zoning. In most places, this is the primary impediment to building additional housing units, as local laws restrict the majority of land to individual, detached houses on large lots.
Reformers have been broadly successful at pushing for a more relaxed definition of residential zones that would allow a mix of small residential buildings to coexist. As these reforms accumulate, I expect we’ll see today’s strict single-family-only zones evolve to allow many compatible housing types by right, including backyard cottages (aka ADUs), accessory apartments (rent out a room), and homes with two to four units.
Another promising target is the elimination or reduction of minimum lot sizes. Lot size rules make it prohibitively difficult to add new housing in existing neighborhoods; where these rules have been relaxed, the housing supply has grown.
These rule changes are modest, but because the vast majority of American land is restricted to single-family-only development, even very modest incremental relaxation of restrictions in these zones will unlock more new housing than we could realistically accomplish via alternatives. Applied regionally, these reforms would create space for millions of new housing units lightly sprinkled across all our existing neighborhoods, so no single neighborhood would be forced to endure radical change.
Parking Will Be Deregulated
Another reform that’s gaining broad momentum is the removal of parking requirements. Parking requirements seem to make intuitive sense —nobody likes driving across town only to find they can’t park anywhere near their intended destination — but in reality, central planning of parking lots has resulted in comical waste across most of our cities. Strong Towns features “Black Friday Parking” every year on Twitter/X to display this waste: Even on the consensus busiest day of the year, America is full of empty parking lots.
There’s a simple solution to this problem: deregulate parking. Who knows better than the business owner how much parking they need to operate? Who knows better than the homeowner how many cars they need to park? If we let individuals make their own decisions, we unlock lots of small incremental changes — a new corner store here, a new backyard cottage there — that can add up to a huge improvement in building supply.
There’s also a proven solution to address the constant fear of neighborhoods: on-street parking supply. First, we need to understand that on-street parking is a city-owned public amenity. The city needs to take action to maintain that amenity, just like it maintains parks and libraries.
In areas of high parking demand, cities can create Parking Benefit Districts. In these districts, on-street parking is priced such that commercial streets always have 1-2 free spaces for convenient access. The revenue is then reinvested into the surrounding neighborhood — spent on improving sidewalks, landscaping and public safety.
In areas with low demand — such as neighborhood streets that only occasionally experience overflow from nearby attractions — parking can be given a time limit or restricted to residents with neighborhood parking tags.
If we combine these two approaches — free property owners to use their land and then protect the public amenity of street parking by actively managing it — we can unlock millions of opportunities for starter houses, backyard cottages, art galleries, corner stores and more.
We’ll make our neighborhoods nicer, lower the cost of housing and support local businesses.