Land Use Without Zoning

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Land Use Without Zoning, by Bernard H. Siegan, Lexington, Mass.: D. C. Heath and Company, Lexington Books, 1972, Pp. 271, $10.00

The current land use mess in the United States makes zoning such an easy target, really. Civil libertarians point out that it violates due process. Many conservatives challenge it on the basis of individual rights. Liberals crank out angry charges of racial exclusion and unfair protection of white, upper-class, suburban land values. The heat is on, and yet zoning persists.

It persists because a tradition as long and as deep as zoning creates its own constituency, members of which have ordered their lives to zoning as they have to gravity and traffic lights. Suddenly into this order come big-city mayors and state governors, who complain that zoning—which involves density and lot-size restrictions, and zoned neighborhoods—is being used by suburbs to keep out their "fair share" of low-income housing. Zoning, say the politicians, is exclusionary. But Bernard Siegan's message must be heard because it is the only honest characterization and offers the only way out: "All zoning is exclusionary, and is expected to be exclusionary; that is its purpose and intent."

Siegan has now published all his findings on zoning and, with publication of LAND USE WITHOUT ZONING, the debate may never be the same again. Siegan's contention is that all of the alleged rewards of zoning can be accomplished without zoning, at less expense, with greater freedom and fewer untoward side-effects. Keep in mind: Siegan is not a libertarian (as he concedes), but a scholar, who is led inexorably to his conclusions not by prejudgments, but by the tedious, methodical research which he presents in his book. It is this aspect which makes him so valuable.

The villain in Siegan's tale is politics:

It will be in an atmosphere of considerable controversy that a great many land use decisions will be made by councilmen in bigger cities.…Politics, money, public relations, personal business and friendships may well be on the line in many votes. The recommendation of the planners will be one element in the mix and probably an unimportant one when political considerations enter. Considered as a whole, a compromise document will emerge that will duly satisfy the obligations of the legislative process in a representative society, but will have little relationship to any rational criteria for the use of land.

Siegan updates and further substantiates all the standard antizoning arguments: zoning reduces competition (by restricting entry into various commercial and residential markets), curtails urban development and cuts tax revenues (by limiting the variety of land uses within particular areas), promotes false "order" and esthetics at the expense of people's needs (says Siegan: "several or more commercial strips and industrial parks are an inexpensive price to pay for better schools"), drives up housing costs and causes a housing shortage by limiting the supply of multiple-family units, adds paperwork and years to land use changes, excludes "undesirables," etc.

HOUSING THE POOR

These arguments have been made before; the difference is that Siegan proves them. For example, he explains that zoning may be a major factor in causing the current housing shortage in the United States by imposing density restrictions, limiting multiple-family dwellings (especially in the suburbs) and boosting the cost of existing apartments, flats, and so forth. He shows that zoning undercuts the natural "trickle-down" process which, according to a landmark University of Michigan survey that has been roundly ignored, results in 3.5 moves for every new housing unit built. It is a devastating argument to those who moan: "But then, who will build new homes for the poor?" No one has to, says Siegan, as long as they are built for the rich. He writes: "[T] he addition of one new housing unit to the market serves not only the intended occupants, but also several other families or individuals who are able to move as a result.…"

But what makes Siegan's book so outstanding is that he not only presents the nonzoning or "zero" zoning free market approach to land use but proves it. Siegan is one of the few free market advocates to successfully counter the Argument From the Worst Example. This technique attempts to debunk an untried proposal by presenting the least desirable of all possible consequences as the inevitable result. Some of the variants are: "If drugs are free, addiction will increase," and "If everyone is free, the poor will starve." Another one is, "Without zoning, there will be chaos." To which Siegan replies: "Look at Houston."

Siegan's study of Houston is presented in full, and it is unanswerable. Residents of this thriving Texas community have twice voted down zoning referenda. It suffers little from any of the predicted unfavorable consequences of no-zoning, although it does have certain subdivision controls, a building code, and housing and traffic ordinances. But it has no official density restrictions or zoned neighborhoods, and a minimal lot size ordinance. How does it work?

USE OF RESTRICTIVE COVENANTS

This is Siegan's most lasting contribution to the zoning debate. He shows that, in Houston, property values are sufficiently protected and use separations occur in a rational manner because of industry proclivities ("the tendency of industry is to segregate itself") and restrictive covenants. To those who say, "Who wants to live next to a glue factory?" Siegan points out that the example of Houston shows the glue factory owner would also prefer not being near you, but rather near other industry. Siegan demolishes the argument that property values become unstable or that single family homes suffer without zoning. The covenants—voluntary legal agreements—and simple economics are rational arbiters of land use. They are economic (not political), and the covenants have expiration dates and do not regulate vacant sites. "Restrictive covenants are a market device to maximize the value of homes," says Siegan. "Most American homeowners prefer to live in a homogeneous single-family environment, and they should have the freedom to pursue this goal, provided others are not thereby harmed.…Restrictive covenants come close to achieving this balance." Siegan's Houston research is presented in great detail, and has the effect of a conversation-stopper. Through it all, Siegan is leading to the conclusion that zoning is a problem-maker, not problem-solver, and that nonzoning is the way out.

The book is difficult reading, but that is not the only problem. Siegan has a somewhat naive faith in the inevitableness of market solutions to land use problems (much like those who predict the worst results from the market), and his book is marked by the flavor of utopian rhetoric. The market, of course, is just a convenient fiction to describe the myriad of economic dealings that go on in a civilized society. The market confers nothing; it merely reflects the strengths and weaknesses of its participants. Its hallmark is not goodness, but justice, and it offers not rewards, but whatever people deserve.

Siegan also shows a certain confusion over what the democratic process can accomplish—he favors straw votes and referenda on some occasions to defeat zoning ordinances, most of which have never been voted on. It is a strategy—he makes that clear—but one wonders about the longterm effects of these substitutes for wisdom. What should be remembered is that, at heart, Siegan is a social-costs man nurtured at the University of Chicago.

But LAND USE is one of those satisfying books that goes beyond the moment and the particular issue to make a more basic point: freedom works, and here's how. In his introduction, Professor R.H. Coase of the University of Chicago Law School points out: "What Mr. Siegan shows, and it is this which makes his study of interest to a much wider audience than those professionally concerned with zoning, is that the market can be used effectively to solve problems which it is commonly thought can only be handled by government regulation."

Unfortunately, in the unstinting praise coming from all quarters for this book, this point is lost. But perhaps it is enough to say that if there is to be a turn to the market in land use, Bernard Siegan's book is the lodestone which points the way.

Dennis J. Chase is a frequent contributor to REASON and other publications. His article "No, Virginia, There Is No Santa Claus" appeared in our December 1973 issue.