Zoning and “Bigness”

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The key insight is that regulatory complexity benefits the largest, richest incumbents. This line of argument is often associated with libertarianism, but you don’t have to be a libertarian to see its usefulness.

So what does this have to do with developers and zoning? Complicated and overbearing zoning requirements have the same effect. They can make it essentially impossible for ordinary people to engage in the kind of projects that built America. Want to restore an old building on Main Street? Uh-oh: the lot is nonconforming to the current code, which triggers all sorts of expensive compliance issues when you go to make any changes; the parking requirement is impossible to fulfill without bankrupting the project. Etc., etc. A homeowner who wants to add an ADU or a small business owner who wants to fix up that Main Street building will run into this kind of thing pretty quickly. Many will give up. Most will never even start.

A larger developer, on the other hand, can play the game, as it were. They can endure the time and the red tape, they can apply for variances, they can offer concessions, they can even apply for a rezoning. Ordinary people can do all of this, but it’s out of reach, practically speaking. More likely, however, a developer will ditch the small Main Street project and simply build something much bigger from scratch, where the expense of all that red tape becomes worthwhile. More likely, instead of ADUs and duplexes organically filling in underutilized space in existing neighborhoods, large, “boxy” apartment buildings go up.

So it’s not that developers like complicated zoning, or that such codes don’t substantially shape what gets built. It’s rather that big, complicated zoning codes ratchet up the scale of development—and thus, in a way, indirectly give developers more clout. They artificially price out small-scale projects, and artificially enhance the practicality of mass projects (like those I critiqued here).

The result is that ordinary people feel like developers are running wild. But the reality is that this state of affairs is largely the result of a land-use regulatory regime that gives developers no smaller-scale competition. More of that competitionand a fine-grained complexity in our places and not in our regulatory schemesis exactly what our cities, towns, and neighborhoods need.

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