Should More Land Use Professors be Libertarians? Part II

In my previous post, I asked why more land use/local government law professors do not identify as libertarians, considering the role many of us have played in exposing the dysfunctional workings of local government.

If there is an obvious argument in favor of the status quo in land use/local government regulation, it is that all the alternatives seem worse. Let us consider some of the candidates:

The Market

 An unimpeded free market in land use development would apparently be the worst of all worlds, as there would be no way to prevent open space from being gobbled up by new housing, roads and schools becoming impossibly congested, or a refinery locating next to a single-family home (or, perhaps more likely, a landowner threatening to build a refinery in order to extort his neighbor, a common scenario in pre-zoning Chicago).  In a densely populated society, we need some way of ensuring that landowners consider the impact of their land use on neighbors.   The good people of Oregon realized this after an ill-advised ballot initiative a few years ago effectively wiped out zoning, and suddenly a single landowner could, for example, subdivide his parcel into 100 lots for single-family homes with no regard for the impact the development would have on local services or infrastructure. The ballot initiative was repealed by a subsequent initiative a few years later.

In my previous post, I mentioned Houston as a possible alternative to most places’ current system of land use regulation. Houston is often touted for its lack of zoning, and corresponding low home prices. I should point out, however, that Houston is not quite a free-market paradise. Houston has a full complement of land use laws, including subdivision regulations (to prevent downtown-houston-at-night-1430683-sthe aforementioned 100 lot problem) billboard regulations, and the like. The city even enforces restrictions contained in private covenants.   As my friend and Houstonian Matt Festa points out, Houston has a quirky city charter that prohibits zoning without a voter initiative, so the city does lots of land use regulation but simply calls it something other than zoning.  And, while I’m on the subject, does anyone really think the reason Houston has lower land prices than San Jose is because of zoning?

Nuisance Law

The common law of nuisance, a favorite of libertarian land use scholars, would appear to solve some of the problems of a free-market system, such as the refinery locating near a single-family home. But what if, instead of a refinery, it’s a bowling alley?   A tavern? A cemetery? Are any of these nuisances? On that note, is subdividing my property into 100 new lots a nuisance? In all of these cases, the answer is … maybe. It depends on the severity and nature of the impact on my neighbors, the existing precedent on nuisance law in the particular state, and, most importantly, how the judge assigned to the case chooses to balance the interests involved.

This, of course, is exactly the problem. If local government land use control has been criticized for subjecting landowners to uncertainty about permissible uses of their property, for forcing developers to go through an expensive and time-consuming process to get permits, for picking winners and losers based on crass political concerns such as campaign contributions, the process of “judicial zoning” through nuisance law is little better. First, nuisance law is, if anything, more uncertain and expensive than local government land use control. Nuisance doctrine is so ambiguous that no landowner can ever know with certainty what his or her rights are without resorting to a highly fact-intensive litigation, which will inevitably involve a massive expenditure of time and money. (And Coasean bargaining won’t work if people don’t know their rights.) Second, judges inevitably pick winners and losers in nuisance cases, and while we might expect a judge – even an elected one – to rule on the legal merits of a nuisance case rather than political considerations, the nuisance inquiry is so vague and policy-driven (e.g., harm v. utility) that judges necessarily end up making value judgments about what land uses they find desirable and undesirable. Moreover, though judges – again, even elected judges – are surely less influenced than legislators by political concerns like campaign contributions, public choice research has shown that the judicial decision-making process shares many of the abuses that plague the political process – such as the dominance of repeat players and the ability of small, well-organized interests to exercise disproportionate influence.

To go a step further, the fact that local government decisionmaking is “political” whereas judicial decisionmaking is not (at least in principle) is precisely what makes local government land use control superior. When local officials make land use decisions, members of the community will at least have the opportunity to influence them through the political process. By contrast, a judge hearing a nuisance case is likely to be far less sensitive to the full array of interests affected by its decision, both because the adversarial nature of common-law litigation precludes anyone but the parties from being heard, and because judges, even when elected, are generally (and hopefully!) less amenable to pressure from voters than are local politicians.

The question, as my favorite economist Bill Fischel puts it, is whether we would rather be ruled by judges or by legislators. Though the choice, as I have presented it here, is an unpleasant one, the balance of the evidence seems to favor legislators. Judges have long understood this, and they have consciously assumed a passive and deferential role in the land use process from the beginning (Indeed, it is notable that the foundational 1926 case upholding the constitutionality of zoning, Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), was authored by perhaps the most libertarian justice of all time, George Sutherland. Sutherland’s opinion made a point that zoning was necessary because nuisance law had become an inadequate means of dealing with modern land use problems.)

Nevertheless, there is something unsatisfying about this justification for local government land use control, even for leftists. The leftist vision for local government is an optimistic one, rooted in the belief that local government offers an opportunity to realize our highest aspirations for democratic self-government.  The local-government-as-least-of-all-evils argument is for us an unacceptably pessimistic view of government, and its insistence on a merely quantitative accounting of the relative demerits of various systems of land use control invites every armchair empiricist to place a thumb on the scale in favor of his or her own preferred arrangement. On the other hand, given the unsparing descriptive account of local government detailed in my previous post, how can leftists be so optimistic? I will address that question in my next post.

Ken Stahl

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4 Responses

  1. John Davidson says:

    seems to me you have confused two very different ideas. the case for regional gov’t is not based on land use planning. here is a link to an excellent article on the economic costs of fracture local gov’t

    http://bit.ly/1o5QSo4 The City as a Law and Economic Subject
    David Schleicher | 2010 U. Ill. L. Rev. 1507

    Whether to have zoning, land use planning, restrictions, and building codes is separate and distinct. It is equally bad if such are used to reward rent seekers whether gov’t is local or regional.

    Unfortunately, this may be out of everyone’s hands. Recall the Home Rule Movement. A consequence is that many state constitutions give these powers to local government and they cannot be easily taken away, if at all.

  2. Veracitor says:

    “…the worst of all worlds, as there would be no way to prevent open space from being gobbled up by new housing, roads and schools becoming impossibly congested…”

    If some “open space” is government property, such as a park– or such as more than half the total land in the twelve Western US States– then nothing forces the government to sell it or allow housing to be built on it. If some “open space” is private property, forbidding its owners to put new housing on it– which they will only do when, you know, there is market demand for additional housing, typically due to population growth– is a species of theft, taking the value of the undevelopable-by-fiat-land and transferring it to the owners of nearby already-developed land.*

    If some public roads and schools become congested due to an increase in the local population then the government can expand them, using money from taxes on the new residents, and using eminent domain if necessary to acquire sufficient land.

    Congestion is caused by local population growth, not by development and definitely not by “sprawl,” which eases congestion (that’s what spreading people out geographically does– it reduces congestion!).

    If a community wants more “open space,” that is basically a demand for more parkland, which should be satisfied by using tax money (or public-spirited donations) to buy any privately-owned land which local government wants to dedicate to “open space” or any other use. Simply forbidding development of some privately-owned lands to provide viewsheds for neighbors “forc[es] some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

    *UGB’s and similar regimes restricting land use are well understood. They diminish the value of land on which development is forbidden and increase the value of less-restricted land nearby (so infill developers love UGB’s and eagerly bribe local politicians to enact them). They decrease housing affordability by restricting competition on the supply side. They supply windfall gains to pre-enactment housing owners at the expense of later arrivals (the value of restrictions is quickly capitalized into prices of developed/developable property).

  3. Veracitor says:

    …the worst of all worlds, as there would be no way to prevent open space from being gobbled up by new housing, roads and schools becoming impossibly congested…

    If some “open space” is government property, such as a park– or such as more than half the total land in the twelve Western US States– then nothing forces the government to sell it or allow housing to be built on it. If some “open space” is private property, forbidding its owners to put new housing on it– which they will only do when, you know, there is market demand for additional housing, typically due to population growth– is a species of theft, taking the value of the undevelopable-by-fiat-land and transferring it to the owners of nearby already-developed land.*

    If some public roads and schools become congested due to an increase in the local population then the government can expand them, using money from taxes on the new residents, and using eminent domain if necessary to acquire sufficient land.

    Congestion is caused by local population growth, not by development and definitely not by “sprawl,” which eases congestion (that’s what spreading people out geographically does– it reduces congestion!).

    If a community wants more “open space,” that is basically a demand for more parkland, which should be satisfied by using tax money (or public-spirited donations) to buy any privately-owned land which local government wants to dedicate to “open space” or any other use. Simply forbidding development of some privately-owned lands to provide viewsheds for neighbors “forc[es] some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

    *UGB’s and similar regimes restricting land use are well understood. They diminish the value of land on which development is forbidden and increase the value of less-restricted land nearby (so infill developers love UGB’s and eagerly bribe local politicians to enact them). They decrease housing affordability by restricting competition on the supply side. They supply windfall gains to pre-enactment housing owners at the expense of later arrivals (the value of restrictions is quickly capitalized into prices of developed/developable property).