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Property Rights

California Bill Cutting Back Zoning Could Increase Access to Housing and Jobs for Millions

By greatly reducing zoning restrictions on housing construction, Bill 827 could massively expand opportunity for large numbers of people.


San Francisco.

As economists and other experts on both right and left have come to recognize, restrictive zoning is one of the biggest obstacles to affordable housing and job opportunities for the poor and lower middle class. Zoning restrictions on housing construction literally lock out millions of people from housing and job markets, greatly lower the potential incomes of the poor and lower middle class, and impeding economic growth. The state of California—especially the San Francisco Bay area—has some of the nation's most egregious zoning rules. A new bill in the California state legislature, sponsored by liberal Democratic state Senators Scott Wiener (San Francisco) and Nancy Skinner (East Bay), and Democratic Assemblymember Phil Ting (San Francisco) would radically alter this sorry state of affairs. Henry Grabar has a helpful description at Slate:

Wiener's bill, SB-827, flies in the face of every assumption Americans have held about neighborhood politics and design for a century. It also makes intuitive sense. The bill would ensure that all new housing construction within a half-mile of a train station or a quarter-mile of a frequent bus route would not be subject to local regulations concerning size, height, number of apartments, restrictive design standards, or the provision of parking spaces. Because San Francisco is a relatively transit-rich area, this would up-zone virtually the entire city. But it would also apply to corridors in Los Angeles, Oakland, San Diego, and low-rise, transit-oriented suburbs across the state. It would produce larger residential buildings around transit hubs, but just as importantly it would enable developers to build those buildings faster.

As Wiener describes in a Medium post about the bill, a McKinsey study finds that, if enacted, it could well facilitate the construction of some several million new housing units in urban and suburban areas within California. Many of them would be in areas with numerous job opportunities, such as Silicon Valley, which currently shuts out large numbers of people with its zoning rules.

Wiener's bill is not perfect. For example, I disagree with its requirement that buildings within the affected areas have maximum height requirements of 45 to 85 feet (depending on the location), in cases where there were preexisting local height limitations that are lower than that. In my view, the height of a new building should almost always be decided by the owner, not the government. It would have been better to override local height limitations entirely, except perhaps in situations where taller buildings pose a threat to public safety. Nonetheless, the bill would be a truly revolutionary improvement over the status quo. It would simultaneously increase housing and job opportunities for the poor, facilitate greatly increased economic growth, and strengthen protection for property rights.

As Grabar notes, the bill may well be "too radical to pass." It will surely face opposition from some current homeowners and a variety of powerful interest groups, including politically connected developers, influential landowners who benefit from inflated housing prices, and others. But even if it does not pass, it is a valuable addition to the political debate, and could help promote progress by expanding the "Overton Window" of policy options that become a part of mainstream discourse.

As Cornell Law School Dean Eduardo Peñalver (a leading left of center property scholar), recently wrote in a Facebook post about Bill 827, "[i]ncreasingly, land use law will be where progressives and libertarians meet." It is hard to find a better example of this convergence than combatting restrictive zoning in California. This is an effort that deserves the support of libertarians, progressives, conservatives, and anyone else who cares about protecting property rights, affordable housing, expanding opportunity for the poor, or increasing economic growth.

UPDATE: The original version of this post incorrectly described the bill's provisions with respect to height limitation, which I described as a minimum height requirement rather than a default maximum height that localities can raise, but not lower (I mistakenly following Grabar's description without sufficiently checking it against the text of the bill itself). I apologize for the error, which has now been corrected.

UPDATE #2: It is possible to interpret the bill as imposing the 45-85 foot maximum height limitation only in cases where the local government has a preexisting height limitation of its own, which is lower (it applies, according to the wording, only in cases where "the project is exempted from the local maximum height limitation," which may mean the 45-85 foot limit does not apply in cases where there is no local height limitation at all). That now seems to me the most plausible interpretation of the text. In that event, there would be no height limitation at all for new development projects in areas where the local government chose not to impose one. I have further amended the relevant part of the post, accordingly. I again apologize for not studying this matter as carefully as I should have.