In Part I of this series we explored what a pencil could tell us about land use policy and the limits of human knowledge.
With Part II we built off of that, exploring how attempts to plan in little ways have inevitably lead to efforts to plan in even bigger, more intrusive fashion.
Here in Part III, I want to explain why that all matters and why you should care.
I’m a libertarian, so I’m strongly predisposed to be skeptical of exercises of government power. And contrary to some people’s thoughts about libertarians, I don’t hold to my beliefs to justify my own selfishness, or because I hate poor people, or because I’m a Republican who likes pot*.
The reason that I’m a libertarian is simple – where government has power that power has consistently been employed in the interest of the powerful, not the powerless. This is true in case after case and is certainly true when it comes to land use policy.
It’s true in obvious ways. For example, government control of land use policy works to the benefit of existing property owners and the detriment of would-be owners.
Most people want to live where people already live. They want access to a variety of commercial and entertainment options, they want to be reasonably close to where they work, and they want other people to interact with.
The natural way to meet this demand is to create more housing where housing already exists. But by letting government control the housing supply instead of the market, that is prevented from happening. Per Matt Yglesias, formerly of the liberal Center for American Progress:
If you go up to the Columbia Heights Metro station and then walk east just a block east you’ll be struck by the hard transition from the large-for-DC new apartments on 14th street and the low density structures right around them. What’s going on, you’ll wonder. What’s happened, simply put, is that you’ve moved out of an area zoned C-2-B and into an area zoned R-4. In R-4 areas, (including almost everything north of Euclid between 14th Street and Georgia Ave, pretty much the entire square between P, U, 14th, and 7th and many other parts of the city) you can’t build a house taller than 3 stories (or 40 feet), you can’t occupy more than 60 percent of your lot, and you can’t build apartments smaller than 900 square feet per bedroom.
As a result, even though these places have become much more desirable places to live, they simply aren’t allowed to accommodate very many additional residents. Instead of seeing new, denser construction to allow more and more people to live where they’d like, we see zero sum battles over “gentrification” as working class residents can’t afford new, higher rents. Meanwhile, the central city’s inability to accommodate all the people who’d like to live there puts enormous price pressure on the closer-in suburbs, pushing people who want the suburban lifestyle ever-further from the city center in search of affordable housing.
It’s also true in less obvious ways, such as how government land use policy benefits the well-off over everyone else. Skeptical? Just look at the evidence.
That’s a chart mapping the FHA’s Housing Price Index from 1992-2011 for Texas and Maryland. Why Texas? Because Texas doesn’t do state level zoning, counties are legally prohibited from having zoning laws, and only some municipalities have implemented zoning codes.
Back to the chart. The data clearly shows Maryland, with all its land use restrictions saw massive growth in housing prices during the boom. As Texas shows, that price skyrocket was artificial, the product of restrictions setting the housing supply well below the housing demand.
The effect of that increase was singularly bad for everyone not well-off. Even if you didn’t want to buy a house, it pushed up rents. If you did want to buy, either you couldn’t afford to, or you ended up with a mortgage that was likely more than you should have borrowed.
Now look at the chart again. Not only did Texas largely avoid the bubble inflating, it also pretty much avoided the burst, something Maryland can’t boast. As before, those least able to afford it were hurt the most by the crash.
Why? It’s pretty simple. If you weren’t that well-off but owned a home you were likely to have all or most of your assets tied up in a suddenly unsellable house. So if you lost your job, which was more likely if you’re on the lower end of the spectrum, then you were far more likely to lose your house since you didn’t have other assets to rely on. And even if you avoided losing your home, you’d still be stuck, unable to sell and unable to move without selling, thus pretty much unable to travel to better work opportunities.
Finally it’s true in downright vile ways, like how it’s been used in the favor of the majority against unpopular minorities. Courtesy of The Objective Standard:
Zoning laws are not limited to construction and development. They can control the smallest details and nuances of an owner’s use of his property, and they can be used for nefarious purposes even beyond the immediate violation of property rights, such as “banning” unwanted individuals. For instance, the city council of Manassas, Virginia, passed a zoning ordinance that restricts residence in households to immediate relatives, thus excluding aunts, nephews, cousins, and other members of the extended family—and the council acknowledged that the ordinance targeted Hispanics, who apparently were not wanted in the area.
Now, to be clear, with the exception of that final example, I don’t think these things happen because people are looking to get one up on other people.
They happen because the people who benefit have the time and resources to understand the system and work it to their advantages. This, coupled with a human tendency to fight harder to avoid a given loss than to gain a positive of equal value creates an environment where government control of land use policy will inevitably be tilted against would-be residents, the less well-off, and unpopular minorities.
And that is ultimately why I support returning land use policy control to the people. All of the other arguments are important, but the fact is that it’s wrong for existing home owners to be able to game the system to their own benefit and to do it on the backs of those least able to afford it and least able to fight back.
Taking back control of land use policy will lead to more robust property rights, reduce government intrusion into our lives, create a more efficient economy, and enable housing that better suits people’s needs and desires, but more than anything, the real benefit is that it will put everyone on equal footing to participate in the housing market instead of letting the rich and powerful use government to enshrine themselves as the winners.
But I’m open to hearing arguments for why government should be working on behalf of the privileged and the powerful and against the weak and the powerless.
*For the record, I don’t think I’m any more selfish than the next person, I don’t hate poor people, and I’ve never smoked pot.
DLaMotte says
Curious. I look at it as the state government saving our ecosystem from powerful land speculators. Otherwise,
our state will remain open season for all types of ill- conceived growth. Thank god we have policy makers who
Care about such things because special interests are formidable.
Gren Whitman says
Sez Mr. Waterman: “Most people want to live where people already live.”
Were that true, we would not see residential developments sprouting hither and yon in ex-cornfields.
Libertarianism is fine and dandy until — see Ron Paul’s mostly dotty campaign positions — it collides with reality.
Steve Payne says
The district government was trying to preserve some traditional, more affordable housing in the areas you describe. The cost of highrise construction is about 4X the cost of 2 or 3 story construction per sq. ft. and the expensive highrises were not affordable to many.
There was gentrification going on in the district but at the same time many young families were seeking the suburban life when they had kids. There were also many new people coming into the area and this put pressure on housing as well. There was a shortage of land available in the closer in areas but there was no shortage in the areas like Bowie, Waldorf, Columbia, etc.
Houston TX doesn’t have zoning but it does have building codes and subdivision laws that often require restrictions so it’s almost the same thing.
Ken Noble says
I think it would have been a better PLAN if Mr. Waterman had not PLANNED on citing Washington, DC zoning controls in a three part diatribe against PlanMaryland and planning.
It also would be better to measure Maryland wealth vs. Texas wealth using the USCensus Bureau’s family median income data (https://www.census.gov/hhes/www/income/data/statemedian.) Doing this, you see that Maryland’s 2010 family median income was $64.025 vs Texas’ $47,464. This seems like a better proxy for wealth than a PERCENT CHANGE (see his y axis) in undefined FHA housing index.
Having failed to show a correlation between planning and less wealth (vs. no planning and more wealth) we are still left to wonder if there is any kind of CAUSATIVE relationship, other than an assertion that rich people invented planning, which is an interesting position for a Libertarian Republican to assume these days.
Yes, I am left “still skeptical” that not planning is better than planning, but I am reminded what Dr. Earnest R. Alexander taught me at UWMilwaukee, which is, “Not to plan…is to plan.” (…..to be or not to be?).
Having said that, I still wonder why this series of articles even HAS the words “PlanMaryland” in it. I am not a huge fan of that document, but this forum has not provided an opportunity to dissect it.
Michael Troup says
With respect to PM, I suppose the resistance really isn’t to the notion of conservation and resource planning. Harkening back to I, Pencil material requirement planning as a general concept is a necessity. Ordering a year’s worth of lumber because you’ll use it, increases the need for warehousing, thus adding cost to the pencil – a product where you can only squeeze out so much margin.
I perceive any local resistance to be that the very folks who push this plan, are the very folks who currently sit in Annapolis, yet once sat in County Council and County Executive chairs rubber stamping the very projects that created the need for such a plan in the first place (Senator Robey, the floor is yours).
So we have proponents who tout “planning,” the virtuous process that maximizes efficiency. And we have opponents who decry “central planning,” the gateway to ceding ones free will and determination to a group of self appointed intellectual elites.
Gren Whitman says
I’m reluctantly concluding that “PlanMaryland” is the proverbial elephant and we who comment on it — pro and con and whatever — are the blind men.
We need to push development toward areas already developed and protect against spot development(s) in less developed areas. I’ve always thought that was/is the aim of “smart growth,” and I support it as common sensical.
If “PlanMaryland” helps to ensure “smart growth,” I’m for it; if not, well, I’m as blind as the next blind person.
Ken Noble says
“Planning” does have many meanings and, as with the U.S. Constitution AND the Bible, this particular conservative columnist has taken a pencil analogy (part I), Dr. F.A. Hayek’s diatribes against the spread of Nazi and/or Marxist Socialism in wartime ENGLAND (part II) and now misapplied an FHA housing INDEX as a proxy for wealth (Part III). All this in a dismissal of issues that affect our FREE STATE OF MARYLAND. After reading these three pieces, I am more concerned about the state of democracy than the state of planning, you know? Is this guy running for office to”represent” us, too? Holy cow!
If this “libertarian” author were to liberate his mind and dive into the academic literature of land use planning he would learn that there actually ARE market oriented thinkers dissecting zoning controls and proposing alternative approaches that he may agree with. A good place for him to start finding out about those types of approaches is through association with the Urban Land Institute in Washington, DC. He would soon find that there is more work to be done revising zoning codes in market oriented directions than just throwing babies out with bath water and declaring that planning is bad. I think that would be a better start for a young career than writing off the wall three part pieces….or there to be a Part IV? I am now convinced that the only thing worse than these diatribes is trying to apply logical critique and analysis to them.
He should try reading Ed McMahon’s ULI essay from Nov. 2011 marking the 85 anniversary of Ambler Realty vs. the Town of Euclid, Ohio….as opposed to, say a pencil essay….:
https://urbanland.uli.org/Articles/2011/Nov/McmahonZoning
I wish him good luck.
Michael Troup says
Well I guess I would like to see a part IV. I think it’s unfair to bash the parallels that Kevin is trying to draw. Without the parallel’s, aren’t you asking him to withhold his critique of PlanMaryland after its roll-out? Then and only then could one speak about central planning/planning vis-a-vis the State of Maryland, is that what he should do? Well I, for one, think we’ve learned our lesson on passing things to find out what’s in them.
While others may not welcome it, I would like it if Kevin made a part IV specifying the parts of the plan that cross the line between “planning” and “central planning.” It may also satisfy his most vocal critics.
Ken Noble says
In the absence of any other “rules”, I was trying to apply logical analysis to the lame comparisons, poor numeric analysis and exhortations of “I am a Libertarian” and “I didn’t even smoke dope” (but, I still can’t think straight) from this “writer”. If “bashing” is looking at a Y axis and seeing “Percent change in FHA index” with no explanation of what the units of measure of that index ARE…then yeah, I will “bash” this “writer”. All I see is INNUMERACY and the certainty that if THIS is the future of leadership in Maryland….we are all in serious trouble.
By the way, I WAS trying to get beyond how MY professors would have “bashed” me for such lame policy analysis by suggesting that the author improve his knowledge, within the bounds of his self definition and actually READ some literature in the field that HE has chosen to BASH (poorly).
Bring on Part IV, though…we wouldn’t want to deprive a Libertarian of freedom of speech…even if it is pablum.