SpaceX's New Company Town Considers Adopting NIMBY Zoning Code

Starbase, Texas, is rushing to restrict development in the newly incorporated city.

Happy Tuesday, and welcome to another edition of Rent Free.

To start with a brief programming note, I'll be off the rest of this week and early next week for some YIMBY-adjacent travel. That means there will not be a Rent Free newsletter next Tuesday.

Please accept my sincerest apologies for the coming lack of housing and urbanism content in your inbox. Perhaps readers could use the missed newsletter to reflect on all the homes, businesses, economic growth, and social opportunities we're all missing out on because of modern zoning codes.

With that said, we still have this week's newsletter, which takes an in-depth look at cutting-edge SpaceX's efforts to impose a stodgy old zoning code onto its new company town.

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SpaceX's New Company Town Goes Full NIMBY With Proposed Zoning Code

Early last month, residents of the unincorporated villages near SpaceX's launch facility in Southern Texas, right along the U.S.-Mexico border, voted to incorporate as the new city of Starbase, Texas.

With most of the area's 218 voting residents being SpaceX employees, the vote was overwhelmingly in favor of incorporation, which the company says will make it easier to shut down nearby beaches during its rocket launches.

Regrettably, one of the first priorities of the futuristically named town is to adopt a very old-fashioned zoning code.

As news outlets have covered, the Starbase City Commission has begun notifying residents that they potentially stand to lose the property rights they've enjoyed on their heretofore unzoned land under a draft zoning code.

As The Washington Post reported, Texas law does guarantee landowners' rights to continue with legal uses of their land after the imposition of a zoning code, even if the new code would otherwise prohibit those existing uses.

Nevertheless, longtime residents have every reason to fear that the imposition of a zoning code will restrict future, potential uses of their property and reduce their property values in the process.

A close look at Starbase's 52-page draft zoning code suggests that it's better than some zoning regimes. But it will still do a lot to weigh down development with layers of red tape, restrictions, and process.

Grading on a Curve

The zoning maps for most major American cities, and more than a few suburban communities, are a rich mosaic of multicolored districts. That's a bad thing.

Each color on a zoning map corresponds to a zoning district, with its own set of rules about how big buildings can be and what they can be used for.

In this respect, Starbase's proposed zoning code calls for a simpler regulatory regime.

The draft code divides the small city into just three zoning districts: heavy industrial, open space, and mixed use.

The heavy industrial district will allow, naturally, industrial uses as well as office space and retail businesses dedicated to servicing industrial uses.

The open space zoning prohibits almost all development to preserve recreational space within the town.

The mixed-use district will meanwhile allow for a range of residential, light commercial, and office uses. This is a major improvement on the standard zoning code's strict separation of residential and commercial uses.

Allowing easier intermingling of homes and businesses goes a long way toward allowing much-prized "mixed-use walkable urbanism" where convenience stores can actually be allowed in convenient walkable locations.

Light-Touch Approach to Light-Touch Density

Starbase's proposed code does one better by not imposing single-family zoning, where only one residential unit per property is allowed.

Instead, the city would permit single-family homes, duplexes, and townhomes anywhere in its mixed-use district by right—meaning these forms of "light-touch" density wouldn't need to obtain discretionary permits from the city government.

As an added bonus, the code would not impose any minimum lot sizes on townhome developments. Barring any health or safety rules about minimum unit size, developers can use as much or as little land as they think is necessary when building rows of row houses. (Townhome blocks could only be 220 feet long.)

Starbase's mixed-use district would also allow property owners to operate home-based businesses out of their residences. Unlike the most restrictive home-based business ordinances, it would allow on-site sales and permit up to four clients to visit a home-based business at one time.

The draft code would still prohibit home-based businesses from having employees on-site or physically altering the exterior of the home.

Starbase's mixed-use district would also allow a range of commercial uses. Property owners could set up a convenience store, grocery store, bar, restaurant, or even a dance hall by right anywhere in the mixed-use zone.

Better yet, unlike most zoning ordinances, Starbase's draft code includes no explicit parking minimums requiring builders to include so many off-street parking spaces per bedroom, square foot of commercial floor space, or linear foot of church pew.

For by-right uses, it would generally be up to the property owner to decide how much off-street parking their business needs, or even whether it needs parking at all.

New Code, Same Problems (Plus New Problems)

For all its relative simplicity and permissiveness, Starbase's draft code still includes many restrictions typical of modern zoning regimes.

It would require a 4,000 square foot minimum lot size for single-family homes and duplexes. That's quite large. It's notably bigger than the 3,000 square foot minimum lot size cap that the Texas Legislature voted to impose on new subdivision developments in larger cities.

Starbase's draft code would also create maximum lot coverage rules, which would limit duplexes and single-family homes from covering no more than 50 percent of an individual lot. Townhomes could cover no more than 75 percent of an individual lot.

These requirements would potentially make residential development on smaller lots infeasible. Builders also couldn't make up for these lot coverage rules by building up. Single-family homes, duplexes, and townhomes could be no more than three stories tall.

Where Starbase's zoning code is more permissive than the average code on smaller homes, it is arguably more restrictive than the average code when it comes to regulating multifamily housing.

While multifamily housing developments, defined as projects of three or more units, are not expressly prohibited in the mixed-use zone, they're not allowed by right either.

Building a triplex or a small apartment building would require obtaining a special-use permit from the City Commission. That would be no small order.

Under the draft code, the Commission will only sign off on these permits after holding a public hearing and finding that the proposed project is "compatible with surrounding land uses," that anticipated impacts are adequately mitigated, and that the development promotes "the public interest, health, safety, and general welfare."

Those requirements would give the City Commission ample opportunity to say no to a new development. The power to just say no in turn gives the City Commission a lot of leverage to force changes and alterations onto developers' projects.

Per the draft code, the City Commission is explicitly given the power to condition a special-use permit on adherence to ad hoc density limits, parking regulations, landscaping requirements, and a development's "compatibility of appearance."

This all opens the door to the city micromanaging the aesthetic appearances of multifamily housing. In the service of mitigating parking impacts, the city would seem to have the power to force developers to add parking on a project-by-project basis—undercutting the code's general forswearing of mandatory parking minimums.

Starbase's mixed-use district would require some businesses, including hotels, liquor stores, and smoke shops, to get special-use permits, too.

The code would also ban food trucks from parking on the street.

It's Still Bad

While many people might not care for its founder or his politics, Elon Musk's SpaceX is undeniably one of the most dynamic, innovative companies in the world. It's done a miraculous job of revolutionizing the stodgy, state-dominated business of space launches.

It's unfortunate, then, that a company known for disrupting old ways of doing things is proposing to regulate land use in its newly founded city via outmoded zoning regulations that have turned the rest of the country into a property rights–free museum.

It's sadly ironic, too, that Starbase is considering adopting a zoning code, given that SpaceX is no stranger to burdensome land-use regulations.

The company's launch operations at Vandenberg Space Force Base in California are under threat from the state's Coastal Commission, the state body that governs development along the California coast.

Federal environmental review laws have hampered SpaceX's Texas launch operations as well.

Despite SpaceX's tangles with red tape, Starbase can't resist zoning's gravitational pull, and all the awesome powers it creates to say "no" to land uses both benign and beneficial.

In so much of the rest of the country, states and cities are slowly walking away from parking minimums, minimum lot sizes, and discretionary approval processes.

Lawmakers in Starbase's home state of Texas just passed a slew of zoning reforms that peel back some local restrictions on property rights.

The state's newest city is moving in the opposite direction. It'll end up costing the company town some of the dynamism its corporate patron is justly famous for.

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Quick Links

• Connecticut Democratic Gov. Ned Lamont is considering whether to veto a housing bill that would require cities to upzone land in order to meet state-set affordable housing goals.
• The Washington Post reports on the out-of-control costs of subsidized affordable housing in Washington, D.C., which costs far more to build than nearby market-rate housing. Read my own investigation into the country's most expensive affordable housing project from 2019.
• The California Senate passes a major transit-oriented development bill.