A debate is raging over housing policy. Many state lawmakers have proposed overriding local growth controls — land-use regulations on housing, such as restrictive zoning requirements — in order to let the free market solve the housing crunch. For example, starter home acts preempting large minimum lot regulations were proposed in Arizona, Minnesota, Texas, North Carolina, and New Hampshire this year.
By letting landowners build more homes on their property, these reforms should increase the supply of homes and reduce their cost.
This strategy has a lot of supporting evidence behind it. But it’s facing fierce pushback from local government officials and homeowners who don’t want development near their neighborhoods. Opponents’ rallying cry has been “local control!” Yes, overriding local rules does reduce local government power, but is that always a bad thing?
The Limits of Local Control
No one wants unlimited local control. The United States fought a Civil War partly over whether local control trumps natural and constitutional rights. Few Americans today would support repealing the Thirteenth Amendment and letting state and local governments decide whether to legalize slavery.
Private property rights are natural and constitutional rights just like the right to liberty in one’s person, recognized throughout recorded history. From the Eighth Commandment’s injunction, “Thou shalt not steal,” to the Magna Carta’s protections for “freeholders,” to the protections for private property in the United States Constitution’s Fifth Amendment, the right to acquire, possess, and use property, including land, has been a fundamental element of the Western ethical and constitutional tradition.
Private rights over land use aren’t unqualified. If you use your land in a way that imposes significant, direct harm on others, the common law has always recognized a tort of nuisance. A complex body of law has developed to allocate, for example, rights to water that flows over one’s land, especially in arid regions.
Zoning: A Useful but Dangerous Invention
So what about zoning? In my AIER white paper, “Unbundling Zoning,” I review the origins of zoning and its pluses and minuses. Opponents of state housing supply legislation appear to be making a claim something like this: it doesn’t matter what the tradeoffs of zoning are, local governments have an unlimited right to use it. Is that plausible?
Imagine a local rule that bans a landowner from building on his property. Now imagine the town seizing that land instead without paying for it. Both actions could deprive the landowner of the value of his land. If you think the first is always okay, why not the second? The logic isn’t so different.
Consider a real example from my town in New Hampshire. A family bought a five and a half acre lot with an eye to subdividing it when they got close to retirement and building a house on it. It was a big part of their nest egg.
But in 2023, the town planning board proposed (PDF) increasing the minimum lot size where they live from two to three acres, making it illegal for them to subdivide. This move would have drastically reduced the value of their land and their nest egg. In New Hampshire towns, zoning amendments typically require an affirmative public vote, so a group of us got together and campaigned against the amendment, narrowly defeating it.
What would have been the difference between regulating away the use of half of their lot, along with most of its economic value, and simply expropriating it for town government and forcing it to remain vacant? The outcomes of both policies would have been exactly the same. The latter would have clearly violated the Fifth Amendment, but it’s not clear whether the former would have done so under current precedent (the Supreme Court’s regulatory takings jurisprudence is notoriously murky).
Growth-control zoning thus not only takes away from private owners many possible uses of their land, but it also inevitably takes away much of the value of undeveloped land. If you think that’s always justified, then it’s not clear how you could oppose the direct expropriation of land without compensation. And if you oppose expropriation, it’s not clear how you could support growth-control zoning, at least not without serious constraints on abuse.
Local Government Power Is Not Authentic Local Autonomy
Local governments are not voluntary, and they are not private associations. In the United States, they do not enjoy sovereignty and are creatures of state government (that is just as true for “home rule” states as for “Dillon rule” states, a distinction that is frequently overblown). State governments delegated them their zoning power, which in most states they did not have until the mid-1920s. Furthermore, growth-control zoning with strict residential density limits is even more recent, dating back at the earliest to the 1960s.
Growth-control zoning, then, is not an “organic” or “authentic” instrument of landowners in a town and does not approximate a private contract. It is a political tool used by some for their own ends, chiefly rent-seeking (stopping new homes from being built raises the value of existing ones under rising demand for housing), and suffers from the familiar problems of “tyranny of the majority” that we see with other government programs.
The near-term solution for the excesses of growth-control zoning is to place limits on it. Doing so places more power in the hands of individual landowners and thus represents an authentic decentralization of power. Nothing should prevent landowners from making private covenants with each other that limit their development rights. (A few progressive states are in fact overturning homeowners’ association rules, which is also a mistake.)
The long-term solution for growth-control zoning is to “unbundle” zoning by allowing private communities to opt out, allowing neighborhoods or streets to choose to allow more uses, and requiring compensation for major regulatory takings. These measures would truly represent a bottom-up kind of “local control,” not a mere reinforcement of municipal government power.
Real Local Control
In general, local government autonomy makes the most sense when citizens have meaningful choices among jurisdictions, creating a beneficial kind of competition that forces local governments to be efficient. Local autonomy over taxes and spending for local services, for example, makes a lot of sense.
Local autonomy makes the least sense for regulatory policies over matters that cross local borders. Localities shouldn’t be able to regulate the transportation of firearms, for example, because it would be impossible for a traveler to comply with all the rules of the different jurisdictions along his route. Growth-control zoning has such external effects: the more one locality restricts housing, the more development gets pushed into nearby localities, perhaps incentivizing them to start restricting development too. Moreover, when the government takes the value of your land, choice and competition don’t help you: if you sell out and move away, you’ve still lost the value of your land.
The Bottom Line
Local control isn’t meaningless, but neither is it a blank check. When it comes to growth-control zoning that limits the supply of housing, states are right to step in to place limits on what localities can do to take away the rights of their own landowners and push development onto other localities.
The ultimate standard of real local autonomy is whether it protects and promotes the ability of individuals to pursue their goals.