The Defeat of California Senate Bill 827 and the Future of the Struggle to Curb Zoning

A California bill that would have greatly liberalized zoning rules failed in the state legislature. The defeat has implications for the broader struggle to expand housing and job opportunities for the poor.

San Francisco.

Last week, California Senate Bill 827 was defeated in a committee vote. Its failure was a painful setback for advocates of liberalizing restrictive zoning laws. The bill would have enabled the construction of many thousands of new homes throughout California by loosening zoning restrictions that block new construction. Zoning restrictions are among the main obstacles to expanding both housing and job opportunities for the poor and lower middle class in the United States. Many parts of California, including San Francisco and Los Angeles, have some of the most severe zoning restrictions in the nation, thereby cutting off millions of people from the opportunity to live in areas with greater job opportunities. Restrictive zoning is also major affront to property rights, since it severely limits owners' ability to use their land as they see fit.

The case against zoning restrictions is so strong, that it unites economists and housing policy experts across the political spectrum. That includes prominent left-liberals such as Nobel Prize-winning economist Paul Krugman, Matthew Yglesias of Vox, Yale Law School Prof. David Schleicher, and Jason Furman, Chair of President Obama's Council of Economic Advisers. Bill 827 was sponsored by liberal Democratic state Senators Scott Wiener (San Francisco) and Nancy Skinner (East Bay).

Nonetheless, liberal cities - including those in California - have some of the most onerous zoning policies in the nation. Such policies not only go against a near-consensus among experts. They are also an affront to values the left claims to hold dear. Shane Phillips, director of of Policy for the Central City Association, notes the "disconnect between liberal aspirations and liberal housing policy":

The people who live in coastal urban cities tend to be a pretty liberal bunch….

We care deeply about equality of opportunity,… I'm proud to count myself among their number….

And then we turn to housing….

The outcomes of our housing policies fly in the face of our ideology. For those in need, we support providing supplementary income, health insurance, educational support, and other social welfare programs—and then we erase their value by making our cities too expensive for those most in need of these benefits. Either low income residents can't afford to live in the city at all, or the cost of housing is so high that the value of the benefits is exceeded by the added cost of rent….

Sadly, the defeat of Bill 827 shows that most left of center political activists and voters are not on the same page as policy experts. Libertarian-leaning columnist Megan McArdle and prominent liberal commentator Matthew Yglesias have insightful pieces on the dangers of this disconnect. NYU law Professor Rick Hills, a leading academic expert on housing and zoning, notes that Bill 827 failed in large part because it was opposed by a broad coalition of left-wing activists and interest groups, including even some who claim to be advocates of affordable housing. He points out that some of them endorse utterly implausible theories claiming that loosening restrictions in order to build more housing would actually increase rent rather than decrease it, a position at odds with both basic economics and extensive empirical evidence. Hills compares left-wing denialism on zoning to widespread right-wing denial of the scientific evidence on global warming. As he points out, both represent triumphs of ideological bias over expertise. "In the end," he fears, "the feedback mechanism between data and policy becomes so attenuated, Florida sinks into the sea, and San Francisco sinks into a housing crisis."

This state of affairs is indeed lamentable. But the situation may not be quite as dire as Hills fears. Unlike climate change, zoning has only recently become a significant political issue, after a long period during which few nonexperts paid much attention to it. Even now, the amount of attention it gets is still only a small fraction of what it merits.

While some left-wing activists clearly do have strong biases against zoning deregulation, many on the left (and on the right, as well) just simply haven't thought about the issue much, or had a chance to develop opinions on it. Moreover, to their credit, a good many left-wing policy elites have made a strong push to move their rank and file on the issue. The very fact that a proposal as far-reaching as Bill 827 got introduced and had a real chance of success, is evidence that these efforts have had some effect.

Widespread public ignorance is difficult to overcome, including on zoning. Most voters are "rationally ignorant" about most policy issues, for the perfectly understandable reason that there is little payoff to spending much time studying them when the chance of a single vote having an effect on electoral outcomes is infinitesimally small. It will not be easy to get them to understand the counterintuitive idea that zoning restrictions are a major reason why millions of people are cut off from better jobs and housing.

Nonetheless, broad expert agreement on zoning creates potential opportunities for cross-ideological alliances on the issue. In the short run, the main initiative in places like California must be taken by left of center reform advocates. But conservatives and libertarians can help by giving this issue a much higher priority than most have done so far. When the left is divided on an issue (as it currently is in California and elsewhere), they can potentially help tip the political balance even in places where they are heavily outnumbered. And restrictive zoning is at least as much an affront to free-market advocates' values as to left-wing ones. There are few, if any, more significant issues for anyone who cares about property rights, economic liberty, or increasing growth.

Reform advocates should also look for ways to help jump-start the issue outside the regular legislative process. One potentially promising strategy is to use strategic litigation to challenge especially egregious zoning restrictions on constitutional property rights grounds. Combining political action with litigation has been an effective strategy for many reform efforts, including the Civil Rights Movement, feminists, gay rights advocates, and - most relevant - property rights advocates seeking to curtail the use of eminent domain to benefit private interests.

The failure of Bill 827 is a painful setback in the struggle against restrictive zoning. That fight was never going to be an easy one. But it is much too early to conclude that it is doomed to failure.

UPDATE: Shane Phillips contacted me to make clear that wrote the post of his that I quoted above before he director of the Central City Association, and that the views expressed there do not necessarily reflect those of the CCA. I am happy to convey this information to our readers.