What’s Wrong with Zoning (with M. Nolan Gray)

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0:00:07.6 Trevor Burrus: Welcome to Free Thoughts. I’m Trevor Burrus. Joining me today is M. Nolan Gray, a professional city planner with experience working on the front lines of zoning policy in New York City. He’s an affiliated scholar with the Mercatus Center and currently completing his PhD in urban planning at UCLA. He is the author of the new book, Arbitrary Lines: How Zoning Broke the American City and How to Fix It. Welcome to Free Thoughts, Nolan.

0:00:31.1 M. Nolan Gray: Thanks for having me, Trevor. It’s a pleasure to be here.

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0:00:35.9 Trevor Burrus: To start in getting into the nitty gritty it’s important, I think, to establish this as you do in the book at the outset. What is zoning, and what isn’t zoning too on top of that, so we’re clear about what we’re talking about here?

0:00:49.4 M. Nolan Gray: Yeah, a great way to start the conversation. So, one of the reasons I wanted to write the book was I found that a lot of people were thinking about zoning, a lot of people had strong feelings about zoning. In many cases, they had the right opinions about zoning, but they didn’t have a very clear sense for what zoning is or where zoning came from. As you say, I think a lot of people tended to think zoning and planning were interchangeable, or maybe they thought that zoning had something to do with building safety regulation, or they thought that zoning and historic preservation were all one and the same thing. So, I start the book by first with a history of what zoning is and where it comes from, and I sort of break zoning down, I think, in a pretty agreeable way to two things.

0:01:34.6 M. Nolan Gray: So the first is zoning is trying to segregate different line uses. So, zoning, of course, most people know this, breaks the city out into residential, commercial, and industrial zoning districts, but then within each of that, there of course… There’s extreme granularity there, so you might have a residential district that allows apartments, and then you might have a residential district that only allows maybe a single-​family home on a two-​acre lot, and legally nothing else can be built. Or, within commercial you might have a commercial district that allows maybe, let’s say, a supermarket and some office buildings, and then you might have a commercial district that only allows maybe office space, right?

0:02:15.2 M. Nolan Gray: So there’s incredible granularity within the system. So in many cases you look at zoning maps and they don’t look like a simple three-​district break-​out, like I think a lot of people do, they’re incredibly complex and confusing. The second thing that zoning is trying to do is it’s trying to restrict density, so it’s saying, We’re going to put artificial constraints on how much floor area you can build for a commercial development, or how many units you can build on any one lot. And those are kind of the two pillars of what zoning is. And I think when you appreciate those are the two things that zoning is doing, it’s not doing all these other things that we see… City planning is doing, for example, like streets planning or parks planning, where I don’t really think there’s a lot of controversy that these are important functions of municipal government, maybe some of the more extreme libertarianism listeners, but I would consent that they’re probably not that controversial. But when you realize that zoning has nothing to do with those more prosaic planning functions, I think it becomes much easier to make a case for abolishing it.

0:03:21.6 Trevor Burrus: And to be clear, you mentioned that the different rules for density and use in density are not and were not even originally sold as a fire prevention or health and safety to stop, say, pollution from being in residential zones. They weren’t even sold that way. They’re explicitly about stopping people from moving in where they would otherwise move in or use the land in a way they would otherwise. And I think that second point is important because if they wouldn’t use the land in such a way then you wouldn’t need a law. If there was no one who wanted to build higher density housing, then you would… You presumably wouldn’t even need a rule that said you can’t build higher density housing, so it is stopping that and not for the purposes of health and safety or anything like that.

0:04:05.6 M. Nolan Gray: That’s a really good point. And every now and then I’ll be talking to a planner and making an argument for, “Hey, you should consider getting rid of some of these parking mandates, or you should consider allowing for more housing in this district,” and they’ll say, “Oh well, why would we bother allowing it? No one would build it anyway.” To which I say, “Well, then why do you have the rule in the first place, right?” No, but I think you’re exactly right. I think there’s a comforting myth that you hear within planning a lot of… Goes something like this, right? Okay, early 20th century, the American city is changing dramatically, transportation technology and building technology is changing what cities look like, that’s all true. But you had maybe industry moving into residential neighborhoods, or you had growth that was occurring just completely untethered from any infrastructure investment. And that’s why we needed zoning, we needed zoning to come in and solve those two problems. This is, I think, a sort of modern rewriting of the origins of zoning. In the first chapter, I spent a lot of time talking about where zoning comes from, and I highlight two of the first cities to adopt zoning, which I think are indicative of the system we ended up with, but in very different ways.

0:05:17.4 M. Nolan Gray: So the first is New York City, but both of these cities adopt zoning in 1916. The first is New York City, pretty famous 1916 zoning ordinance. And you read a lot of some of the stuff that they were saying, they were saying like, “Well, we had too much… We have too much office space getting built in Lower Manhattan, and that’s causing a strain on the subway,” which was at the time, of course, a private system. We have too much industry getting built next to the Fifth Avenue Association or The Fifth Avenue shopping district, a very posh shopping district. And with modern eyes you read this and you think, “Well, those are pretty valid justifications for laying these regulations, right?” But then you sort of scratch at the surface a little bit and you’re like, “Well, okay, well, what’s the industry that they were concerned about on Fifth Avenue? Was it like smoke or traffic or… ” Well, they were really worried about the poor Jewish factory girls who worked in these factories, leaving the factory on their lunch break or after work, and walking on Fifth Avenue and scaring off the corridor’s elite Anglo clientele, not exactly something that I think the state has a valid interest in regulating for.

0:06:23.3 M. Nolan Gray: Or you look at the Lower Manhattan case, and some of the largest constituencies for zoning were incumbent office landlords who basically were seeing office rents stagnate or fall because so much new supply was coming online, very good for people who wanna work or rent office space, very bad for people, the incumbent land owners. So you see this kind of… I think that this would be familiar to your listeners, you see these types of Baptist and bootlegger coalitions forming. You have planners saying like, “Oh okay, we need to get the smartest people in the room to sit down and come up with a master plan for New York City, and it’s gonna be great.”

0:06:55.4 M. Nolan Gray: And then just below the surface, it’s like maybe xenophobic shopkeepers and incumbent landlords sort of pushing for the system. A similar dynamic in Berkeley, California, which also adopts single-​family zoning in 1916. And I think it’s actually more interesting in the sense that they had single-​family zoning, which fully made apartments illegal to build in huge portions of the city. And they do something similar, they say in their documents promoting zoning, they say, “We need this to keep industry out of residential neighborhoods.”

0:07:28.4 M. Nolan Gray: And again, you look at that and you’re like, “Well, of course, that makes a lot of sense. I don’t want an oil refinery opening up in my cul-​de-​sac. But then what are the examples? Give an example of an industry that you don’t like, [chuckle] and it’s invariably like a Chinese laundry or a dance hall that was attracting African-​Americans. Right, and so you’re like, Okay, well, you know what, the nuisance here is not how I think a normal well-​adjusted person would think of a nuisance. It was very much a social nuisance as they might put it. Certain types of people wanted the nuisance to be segregated away.

0:08:02.5 Trevor Burrus: Why 1916? I mean we have the progressive era of course, and there are a lot of very unsavory policies being discussed such as eugenics around that time, so is it just part of that or was there some great innovator of zoning like the Einstein of zoning who came along and suddenly had this idea that became the talk of the nation and all over the nation within 10 years?

0:08:25.9 M. Nolan Gray: You know, that’s a really good question. Why in 1916? I think there is something too. We were in this period of significant change. I think another element of what’s going on is mass car ownership is significantly changing the shape of the city, so whereas historically, it was very expensive maybe for a working class household to get out to the suburbs, right? Transportation was so much expensive. Cities had street car lines, but the fare could be pretty expensive or… Industry, for example, same thing. There wasn’t… They didn’t have the type of box trucks that we have today that would allow industry to disperse, and so I think that the mass car ownership kind of opens up a lot of areas that had previously just been naturally segregated, both in terms of these socio-​economic factors, but also in terms of maybe a mixture of uses… I think that’s a big part of it.

0:09:14.7 M. Nolan Gray: I also think too, the ideological element of this is really important. I think as you say, we’re in the thick of the progressive era here, and there’s definitely this notion of… Like I was saying earlier, okay let’s get the smartest people in the room. Of course, they’re all gonna be Anglo guys with degrees from ivy league schools, and they can just think through these problems. It’s very much like the origins of a modernist high modernist way of viewing the world that of course is taken to just an incredible extreme by the middle of the 20th century. But you’re starting to see, I think, some of those ideas there that, okay, we can actually sit down and comprehensively say what isn’t allowed on every single lot and at what scale in the city. And I think there’s this hubris there that’s coming out of this time period.

0:10:01.7 Trevor Burrus: You mentioned a single-​family home, and I live in a neighborhood called Pentagon City in south Arlington in the DC area, which is very, very full of single-​family homes, probably shouldn’t exist. But functionally, how does zoning ordinance for say single-​family homes work, like what are the mechanisms by which they are restricted to single-​family homes?

0:10:29.6 M. Nolan Gray: Yeah, so I would just preface this point by saying, I don’t judge anyone who lives in a single-​family home or aspires to live in a single-​family home.

0:10:39.3 Trevor Burrus: I’m not…

0:10:39.4 M. Nolan Gray: Sure.

0:10:39.4 Trevor Burrus: But I’m sure there should be high-​rises in the real world.

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0:10:43.4 M. Nolan Gray: Yeah, but I think this is important as a caution here. My general approach to it is like we need to get rid of a lot of these prescriptive rules that determine what types of housing you can and can’t live in and what types of communities you can and can’t live in. And let people decide for themselves. I’m sure many Americans would like to live in single-​family homes, and there’s nothing wrong with that, and our post-​zoning city has probably loads of that. I mean we’ll talk about Houston here in a minute. But I think exactly to your point, in a context like Pentagon City, where I think it’s Aurora Hills or something that single-​family neighborhood. It’s literally just out of the Pentagon and going to be just west of Amazon HQ2. Yeah, single-​family homes on, I believe it’s 5000 to 7500 square foot lots. So what’s going on there is essentially a zoning district has been mapped in that area, and it says legally the only thing you can build on lots in this area are single-​family homes, and we will just not issue you permits for anything else. And if you want to build anything else, you can come up and ask us for permission, but there’s going to be a big ruckus public hearing.

0:11:47.5 M. Nolan Gray: It’s going to cost you a lot of money, we’re gonna squeeze a lot of fees and fines out of you, and then you might not even get your permits. And so I think in some context, like single-​family homes are the highest and best use, and that makes a lot of sense, and people who wanna form private compacts and private agreements to say, Hey, this is gonna be the only thing on our street, I think that’s perfectly valid. I think where we get into a problem is when you have the state coming in and saying like, Hey, we’re gonna enforce this extremely strict constraint on what can and can’t be here.

0:12:19.2 Trevor Burrus: And that includes… You have good little pictures in the book about it includes just saying how the property can be used in there… When you walk around this neighborhood, there are strange little variances that stick out, like why is there a complex here, which I’m sure has some of its own little story to it, but also setback rules, square footage rules, parking rules, these seem maybe even innocuous, but if you actually see how much land is not being used for living, it becomes fairly astounding when you see just how much land is for, say, cars or a given size of an apartment that someone has decreed you can’t go lower than this, for example.

0:13:00.3 M. Nolan Gray: Yeah, absolutely, and I try to get into that in chapter two, this regulatory thicket. This is why I think a lot of people don’t fully understand zoning, is because there’s just so much going on with it. There’s so many little rules that add up, but I think it’s actually a really fun thing to study because once you understand zoning, you can take a walk in your neighborhood and kind of understand why things look the way they do exactly to your point right? Like, why are all the homes on a certain block, maybe 2 1/2 stories? Well, if you understand height limits that the city is imposing, you start to see that, or for example, of setbacks. So of course, there’s all this… There is this notion that Americans love their lawns. We have these huge 25-​foot front set-​backs and 30-​foot rear setbacks.

0:13:45.0 M. Nolan Gray: Maybe people do like them, but also if they didn’t like them, they legally couldn’t do anything else because in many cases, they’re required. Or, exactly to your point about cars, right? This is another thing where I think there’s… I’m living in LA, and there’s this… Of course, this saying, this notion of LA’s Angelina’s love their cars, and it’s like, Well, we kinda don’t have any other choice. It’s literally illegal to build an apartment building here, except under very, very specific conditions without a developer also having to build a huge parking garage or a huge parking lot. And so the code writes a very, very… These local zoning ordinances. They’re very much like social enterprises, they are regulating the exact form in which you can live in a particular place. And in many cases, of course, they’re imposing, I would argue, antiquated notions, and they don’t reflect maybe changing family structure, or they don’t reflect maybe changing transportation technologies.

0:14:41.0 Trevor Burrus: So how bad is it? We can sit around and complain about these not… These rules not matching up, as you said, with the way people might want to live now, but the costs in terms of… In some of these cities, some of the ones in particular like San Francisco, and you talk about San Jose in the book, how bad, how much can we estimate how much this is adding to the price of housing and really shutting some of these cities down for people to move in there? ‘Cause I always try and bring up with people, if you think about the image of San Francisco and New York City in American history, that image you see in movies and pictures is one dominated by poor people living in those cities. They’re working in the streets, they may be living in tenements, and maybe don’t like that, but poor people are living there and moving there for opportunity, and it’s kind of crazy that that’s just not the case anymore with these cities. So could we say This is zoning’s fault, or a huge amount of it is zoning’s fault?

0:15:37.2 M. Nolan Gray: Yeah, I think it’s a really complicated question. There is pretty robust consensus among the urban economist and folks who have been studying this for decades now that land use regulations like zoning are a huge driver of housing costs, particularly in certain regions… Exactly like you said, like San Francisco, parts of New England and the Northeast, the West Coast in general. I would say, as I sketch out in the book, I think zoning makes housing more expensive in three ways. The first is it just allows less of it to get built, so this gets back to like… In Los Angeles, for example, on something like probably at least two-​thirds of residential areas, it’s just illegal to build apartments. You can’t build anything more than a single-​family home. So that’s a lot of housing that just can’t be built in Los Angeles, and of course, there’s enormous demand to live in LA. For all its problems, the weather is fantastic, and there’s great jobs and cool amenities, and people, when they have a choice, even if they’re working remote, a lot of people say, “Hey, I wanna live in LA.” But there’s not enough housing to accommodate that, so the existing supply gets bid up and becomes more and more expensive, which drives gentrification.

0:16:39.2 M. Nolan Gray: We can talk about that in a minute. The second element is just increasing housing quality beyond what consumers and developers might actually want. So to return to the parking example, some people might demand an off-​street parking space with their apartment or with their home… Absolutely, I’ve been in that situation, but other people, maybe they might not have a car and they might want to buy or rent an apartment near transportation or within walking distance of their job, and they don’t want a car, but the zoning ordinance forces the construction of off-​street parking space, or for example, this is very common in suburbs, you have a regulation that says you can’t build a home that’s less than 2000 square feet floor area, or you can’t build a home on a lot that’s less than 10,000 square feet. All of these things, of course, increase the cost of housing, and they do so in a way that doesn’t really reflect any health or safety concern. It’s purely just forcing housing consumption to be higher than it might otherwise have been. And again, some people might want that. But when you’re putting a floor that’s so high, you’re basically saying you have to consume up to this floor. The third is the permitting delays and all of the regulatory chaos that this adds.

0:17:48.0 M. Nolan Gray: So historically, right, the way this is meant to work is if you’re compliant with building codes, which are actually rooted in health and safety considerations, you come in, you present your plans, you get your permits and you start building, and this is how you look at many great neighborhoods in the US, and I always joke, they were built by some guy and his cousins right? It used to be very easy to get permits and small operators could build maybe something like a row of townhouses or a single-​family home or a small apartment building with a corner grocery. Of course today most of those developments would be illegal. You would have to request certain zoning relief. This of course involves ruckus public hearings and of course lots of fees and concessions being paid, and so it just doesn’t happen. And so, of course, this is at its most extreme in a city like San Francisco or Los Angeles or New York or Boston, where the demand just so dramatically outstrip the supply, but I think what we’ve seen over last two years is that this is kind of creeping nationwide. So I remember when I would have these conversations with maybe someone in a state like Utah or a state like Tennessee two years ago, they would be like, Oh, that’s a California problem.

0:18:58.0 M. Nolan Gray: The Californians just don’t know how to run their state, and I would wear them, I would say, Hey, if you actually look at your zoning ordinance, it’s just as bad in many cases as these cities. You just have maybe some remaining land on the periphery that you can develop or you just don’t have nearly as much demand. But that’s gonna change, right? And of course, it has changed and over the last two years, partly because of short-​term factors, but also because of these longer-​term underlying issues, the housing crisis has gone national.

0:19:24.3 Trevor Burrus: You mentioned the interesting thing is the price goes up, and you had mentioned that many times, as you might expect in say, 1915, where we can assume that the number of racists were probably higher than today, and one of my general rules of being a Libertarian is, if there are a bunch of racists in society, as there have been, there still are, you shouldn’t empower them to use that… Use their racism, put government force behind their racism via things like occupational licensing or zoning. Now, of course, the Supreme Court did strike down Buchanan v Warley explicitly racist zoning ordinances. They used to be quite common, or they were common in the very beginning years of saying no African-​Americans can’t live in this neighborhood, but of course, the effect of this just in price and also in terms of intent has contributed to segregation in ways that people do not really appreciate.

0:20:21.5 M. Nolan Gray: No, I think that’s absolutely right. And that’s a key part of the early story of zoning, right? So, you have a lot of cities adopt, as you say, explicitly racial zoning, so they say… Very much like South Africa sort of regulatory regime of whites can live here and blacks can live here. And of course, they tried to frame it where it’s like, Oh, it’s race-​neutral, Whites can move into black areas and black can move into white areas, but of course, anyone with any sense knows exactly what’s going on. So, in 1916, that gets struck down. And what happens in the immediate aftermath of that is a lot of these cities start scrambling for an alternative way to get that type of segregation. And what they settle on is modern zoning, because if you can, for example, say, Hey, the only types of homes you can build in two-​thirds of our city are 2000 square foot single-​family homes on 10,000 square foot lots, and they need to have a two-​car garage, well, you’ve put…

0:21:16.0 M. Nolan Gray: That’s a pretty high price floor to put on housing, and in American… In a US context, particularly at that time, the racial implications are pretty clear. So what you get is this sort of reversion to a more class-​based segregation to say like, Oh well, if you don’t consume at least this much amount of housing, you’re not allowed to live in this part of town. And that’s fairly explicit. I mean, a lot of these cities that had their zoning ordinances thrown out after Buchanan v Warley, literally go to some of the early zoning framers and are like, What can you do for us? And in some cases, those early documents like dance around the race issue. In some cases, they’re fairly explicit, they’re like, Hey, don’t worry, we’re just gonna get exactly what we used to have, but without having the Supreme Court on our case.

0:21:54.1 M. Nolan Gray: And I think… It’s very easy to, I think, hear a story like that and think like, Oh, that’s really bad, I’m really sad that happened in history. In many cases though, these codes are still on the books, right? Like, in many US cities or like… In many cases… In some cases, they’ve actually got worse, they’re even more restrictive. So for example, a lot of cities didn’t have maybe stuff like minimum parking requirements or even single-​family zoning, or New York City didn’t have anything like single-​family owning in 1916, that was a later addition. And that’s true of many other cities. So in many cases these codes have actually gotten worse. And there’s pretty robust evidence, right? Cities that adopted these codes earlier, maybe 50 years down the road, have much more extreme levels of segregation, both on the basis of race and class.

0:22:43.3 Trevor Burrus: Another one of the rules I go by is that you can have… You can put thumbs on the scale in very subtle ways or very explicit ways as zoning is. 100 years ago, and it could be racist to put those thumbs on the scale, but you run that story forward to modern day, and now there’s a different constituency around it. Assume it’s no longer about racism, but what is it about now in terms of maintaining these codes that maybe a 1926 code that was adopted by a bunch of racists, who are the constituency around it now?

0:23:12.3 M. Nolan Gray: Yeah, so I think there’s a few theories here. You know, a theory that I highlight in the book is The Homevoter Hypothesis. It’s essentially this notion that for most Americans, their largest investment is their home, naturally, because of course, we heavily, heavily subsidize that in many ways, including through tax policy. And so naturally, they respond to this by advocating for policies that increase the value of that asset. So that includes both building less housing and make the quality of the housing higher. So, this is this notion of essentially this original 1916 New York City thing of, great, I’m an incumbent property owner, I wanna increase the value of that, I want less supply coming online. I think there’s something to that, for sure, I think it’s a pretty compelling case.

0:24:07.1 M. Nolan Gray: And you can go to these planning hearings and people will literally say stuff like, I oppose this new development, it’s gonna lower my property value. [chuckle] Now, it’s kinda funny because a lot of the evidence actually isn’t great. So for example, there was a recent paper that came out that even income-​restricted housing near you doesn’t actually lower your property value, let alone like, market rate, multi-​family or maybe it’s something like a corner grocery. There’s just not a lot of evidence that this lowers your property value. And this I think it’s maybe to the broader constituency for zoning is, I think for the past 100 years, we’ve habituated people to think, Okay, when you buy into a neighborhood, it’s never gonna change. And so, I think people… Now, they’ve responded to that regulatory framework to say, cool, I don’t want my neighborhood to ever change, I’m gonna be extremely conservative about any change that happens, and I’m just generally gonna oppose anything changing in my neighborhood. And I think that’s an extremely unhealthy sort of status quo that we found ourselves in, and it’s gonna be very hard to back out of that because it’s not just… There’s a cultural element to it, I think.

0:25:01.5 Trevor Burrus: I like how you tell a story, which I’ve encountered these, where you maybe have a new constituency around maintaining or at least capping growth in cities. You talk about a meeting in California where they say now the problem is, is we just have too many people, cities are dirty, and they’re environmentally harmful. And so one reason we just need to cap this is just to make sure that we’re preserving land, and we’re doing a good job by the environment, which is a very common and completely wrong-​headed way of looking at this.

0:25:35.1 M. Nolan Gray: Yeah, absolutely. I mean, I think the nature of the forces underwriting exclusionary zoning definitely changes in the second half of the 20th century, so it becomes… Especially in a California context where this crisis is at its most extreme, it becomes much more of an environmental consideration. So people say, we need to stop growth because growing cities is gonna destroy the environment. This is another… Less so with the first round of zoning. Yeah, I’m some sympathetic to some of the concerns. Of course, you need to protect truly outstanding natural areas, and of course, in the ’70s, there were just a lot of incredible unmitigated environmental issues that needed to be rectified, but I think to a certain extent, that generation overcorrected. And exactly like you said, there’s this population growth control thinking that starts to seep in, which I think is a very nasty way to look at the world.

0:26:30.3 M. Nolan Gray: I mean, you essentially become a Theranos, right? Where you start to think like the problem is just there’s too many people, and so we can solve all these problems by, I guess, getting rid of people who are already here and stopping more people from arriving. Of course, that doesn’t actually work in the long term, and we’re kind of at the end game of that, so to speak, [chuckle] here in California, And so, I think the irony here too, I would say underwriting this, is that cities are actually probably one of the most incredible environmental institutions humanity’s ever devised, right? So of course, as people live maybe in homes on smaller lots or in multi-​family buildings or in-​town houses, they’re consuming just less natural area, so that eases pressure on natural areas to be developed. But also of course, these types of housing, just people in a town house or an apartment use less energy.

0:27:21.8 M. Nolan Gray: They generally produce less trash. They’re able to maybe walk or ride a bike or take transit, which of course doesn’t involve the greenhouse gas emissions of driving. So again, I’m not… I don’t approach this with, I think the way some urbanist approach it, where they say we need to force this type of development. You know, this is… We need to sort of corral people into communities like this. I think that’s a little bit overstated, but people have made arguments like that. My argument is, Hey, some people wanna actually live in this really environmentally friendly sort of urban walkable lifestyle, Why does government regulation stop them from doing that? And why does, at the same time, this regulation effectively mandate and aggressively subsidize emotive living that actually has huge environmental costs? And so, I think zoning is key to that. Zoning writes this into law that, Hey, everyone’s gonna live in a single-​family home out on the periphery and they’re gonna drive everywhere for all their trips. Again, no problem if you want that, but the idea that the state should be involved in enforcing that, I think is completely wrong-​headed.

0:28:21.3 Trevor Burrus: Now, let’s… As you do in the book, let’s still man zoning here for a bit, there’s one obvious one, and we’ve kinda brought it up that essentially is to say that they are conflicting land uses, whether that’s a glue factory as you brought up, or a beer garden in a residential area, or urban residential area where beer gardens can get pretty loud, so all different types of ways that property rights and different uses can conflict. So, one of the things that we should be doing, and this is not like crazy, is maybe preempt-​ing those, so we could solve them ex-​post. We could solve them after the beer garden goes into place and then makes everyone upset, because it’s super loud at 2:00 AM, or we could just make sure that it never happens in the first place and say we won’t have any permitting of large bars or whatever sort of zoning restriction is going to keep that kinda conflict from happening. And of course, the glue factory would be another one, and all different types of conflict in between, so that’s… It’s taking away… I mean, I think this is important.

0:29:26.2 Trevor Burrus: There are many things that began racist, but it doesn’t make them still racist today. You know, minimum wage had many people who supported it for racist purposes doesn’t make people who support minimum wage today racist. So just take the best argument here and say take away the sordid history and say, this general idea is not crazy by itself, and maybe that’s not the wrong approach when creating a city.

0:29:49.6 M. Nolan Gray: Yeah, I just wanna say, I think I said earlier, I think I said Theranos instead of Thanos. Yeah.

0:29:53.8 Trevor Burrus: You did say Theranos. [chuckle] Yeah, I’m a big moral fan. It’s Thanos, yeah, yeah. Theranos is the…

0:29:58.9 M. Nolan Gray: Sorry.

0:30:00.2 Trevor Burrus: It’s the blood company. Yes.

[chuckle]

0:30:00.3 M. Nolan Gray: I always get the two mixed. It’s great that these two great villains are so close, but also so…

0:30:04.9 Trevor Burrus: Exactly, exactly.

0:30:06.3 M. Nolan Gray: I had to address that before I get a thousand replies on [laughter] your Twitter and my Twitter, so excuse me.

0:30:10.9 Trevor Burrus: Exactly.

0:30:11.9 M. Nolan Gray: Thanos, we’re in the Endgame. Okay.

0:30:12.8 Trevor Burrus: Yeah.

[chuckle]

0:30:15.9 M. Nolan Gray: To your point, still manning zoning. Yeah, so I think this is really important to do before we kinda set up the case, we’re getting rid of zoning. So I think, as I said earlier in the conversation, zoning is trying to do two things, it’s trying to segregate land uses and restrict density. So, I think the most sympathetic argument for maybe, let’s take the segregate uses piece is, of course, there are certain uses that are incompatible. Like, there are certain types of uses that just make bad neighbors. Now, there’s extreme and obvious examples of this, like I don’t want a oil refinery opening up next to my house, but also there’s subtle examples, like you know, a bar might be fine, but a bar that blasts really loud music and has smokers like hanging out out front until 4:00 AM, I don’t want that near me, right? And I’m highly sympathetic to people who are concerned about stuff like that.

0:31:04.9 M. Nolan Gray: Zoning comes in and it’s kind of a blunt instrument way of solving that problem. It’s saying like, Okay, flat out, We’re gonna solve most of this problem by saying there’s industrial districts and there’s commercial districts and yeah, there might be some bars that it would be nice to have in a residential neighborhood, but we’re just gonna solve this problem completely and say no commercial in residential areas. And there are even more ambiguous edge cases, right? Like, corner groceries. A lot of people might like a corner grocery in their neighborhood, certainly that’s the most desirable neighborhood, and many US cities has developments like this. But other people might say, I don’t want the traffic generation, I don’t want the strangers coming into my neighborhood, I don’t want… I don’t want the smells of a garbage can in the background. And so, yeah, zoning is just a really, really blunt instrument for solving these problems.

0:31:51.4 M. Nolan Gray: You know, I would say you can go out and look in heavily zoned places like New York City and LA and still find conflicts that fly under the radar. Or, I think in many cases, this is used in discriminatory ways. So for example, the densest forms of housing are generally only allowed in areas near industry or commercial. But yeah, I think there’s a sense in which if done right, this system makes sense. The second is, of course, it’s somewhat obvious, right? Of course, growth needs to be coordinated with infrastructure. And so, there’s two ways of doing that, there’s the… Have the infrastructure follow the growth or have the development follow the infrastructure, and zoning is essentially opting for the second way of solving that problem, saying, Hey, we’re only gonna allow new development near where we have infrastructure capacity.

0:32:44.2 M. Nolan Gray: I think this argument fails… I think the two arguments fail, as I suggest in the book. I would say on the first piece of the youth segregation, the first is that, of course, there are obvious and extreme cases of like the oil refinery next to the home, but we actually solved that problem, for the most part, both with regulation and through market. So, these land uses just don’t wanna be in the same places, right? Like, the oil refinery doesn’t wanna be next to the home either. Partly because that’s gonna be a potential litigation and complaining, but also partly because that oil refinery needs to be on major transportation infrastructure or maybe next to a port. And of course, that’s not the ideal place to have a single-​family home. Of course, that doesn’t solve all problems, like, there’s still gonna be elements like that. But then two, you can have regulations that solve that problem without having something so extreme and destructive as zoning.

0:33:34.9 M. Nolan Gray: You’re gonna say, Hey, if you’re a heavy industry, we’re gonna have a heavy industry district and you can go to town in that district, but we are gonna restrict you to that district. And historically, that’s what the cities did pre-​zoning, they would take the most noxious uses like slaughter houses or tanneries and say, Alright, sorry, you’re a slaughter house, you do have to be out on the edge of town. And that’s… As we can talk about in the case of Houston, that’s essentially how Houston solved some of these problems. So they pick these truly offensive uses and they say, Okay, we are gonna have maybe something kinda like districting for you, but we’re not gonna do this weird game where we separate duplexes from single-​family homes.

0:34:12.6 M. Nolan Gray: And I would say the other element of the use segregation piece is, I would say the way to solve these problems is to actually regularly impacts. So if you’re worried about smells or if you’re worried about traffic generation, maybe we couldn’t measure these things really effectively in 1916, but we can definitely measure these things now. Noise is I think a great one, because you look at many cities noise ordinances, and it’ll be like one or two sentences, and it’ll be like no noise unreasonable to a person with excellent hearing after 10:00 PM. And you’re like, this is like, Medieval ordinance. It’s like we can do much… Like, we can set pretty clear standards and we can also measure this and say, we’re gonna hold people to it in a really systematic way. Or same with traffic generation or same with smoke or… Smells get a little bit more complicated, but I’m optimistic about the capacity for our city planners to solve that problem.

0:35:03.0 M. Nolan Gray: The second piece too is, I think with coordinating growth with infrastructure, I think we just have it backwards, right? You don’t stop growth until you have the infrastructure. The infrastructure should be following the growth, right? So, I draw a lot on the former World Bank urban planner [0:35:19.6] ____ in the book, where what we need to be doing is we need to be sit… We need to sit down, have a realistic conversation about the growth that’s coming, the infrastructure that’s gonna be acquired, and we just start planning to accommodate it, right? As opposed to this notion of, Okay, we’re gonna restrict development until we have enough infrastructure to get out to you. These things need to be working in tandem, and of course, they need to be interacting. But this notion of like, Okay, let’s just stop growth, and we’ll get around to the infrastructure piece eventually, I think it’s just the problem understood in reverse.

0:35:49.9 Trevor Burrus: So you’ve mentioned Houston a couple of times. Let’s talk about how this famously un-​zoned city of Houston, Texas looks and what it allows and how it goes about solving some of these problems that you mentioned that are in themselves inevitable if you live in a city.

0:36:07.2 M. Nolan Gray: Yeah, so Houston is really fascinating. It’s America’s fourth largest city, probably soon to be third largest city, sorry Chicago. And Houston is interesting ’cause it doesn’t have zoning. Houston doesn’t have zoning because they’re the only major city that actually put zoning to a referendum, and in all three referenda, it failed. Mostly from opposition, from working class Houstonians of all races. Now, Houston’s a little bit weird as an example for my case, right? ‘Cause it pains to say this in the book, Houston made almost every other government planning mistake you could have made in the 20th century, right? So they did bad urban renewal. They built urban freeways that destroyed neighborhoods, and they made a whole bunch of planning mistakes, and you know, I stress all that in the book. But I argue that Houston is really interesting, because they didn’t make this one really big planning mistake and that’s they didn’t adopt zoning.

0:37:01.0 M. Nolan Gray: And so, as a result of that, Houston has become one of the most affordable and one of the most diverse major cities in the US. It’s this place where it’s very easy to maybe take a single-​family home and turn it into two or three town houses. It’s very easy to take maybe a former strip mall on a major corridor and turn that into ground floor shops with apartments over top. In any other US city, these would be these huge ordeals, they would acquire huge zoning rewrites, they would require a huge planning studies. In Houston, because they have this flexible land use framework, it’s just able to happen. Now, that’s not to say that Houston doesn’t have any land use regulations, far from it. They have a lot of rules that regulate, for example, uses that are gonna be offensive just about no matter where they go.

0:37:42.4 M. Nolan Gray: They have rules regulating impacts, things like noise or storm water management. And then of course, they have this very, very interesting system of private deed restrictions. Essentially, a private form of land use regulation where people who want maybe something other than non-​zoning can voluntarily opt in to something that might look like zoning. So I think that, you know, is this an ideal arrangement? I don’t know, but we’re operating in a no-​perfect solutions policy environment, and what I think you have is, you have a lot of people who want something like maybe that R1 zoning district that only allows single-​family homes, doesn’t allow apartments or commercial, and requires two-​car garages, a 30-​foot deep front yard, some people want that. And the question is, what’s the best way to satisfy that preference?

0:38:29.7 M. Nolan Gray: You can have the government come in and say, “We’re gonna impose that and enforce it until the end of time.” Or you can say, “Hey, if you wanna voluntarily opt into that, the city will back you up, we won’t issue permits that don’t comply with that, but you have to voluntarily opt into it, you have to play a role, you have to cover some of the cost of enforcement, and you have to at least regularly, somewhat regularly have somewhat of a conversation about whether you wanna change or renew or let those rules expire.” And so, in parts of Houston, of course, you end up getting some neighborhoods that look like maybe an R1 zoned neighborhood, but then in huge portions of the city, you have almost total freedom of property owners to do what they like with their property. And so it’s a compromise that I think works and has made Houston uniquely functional among American cities. It’s a little bit provocative, ’cause we’re not used to thinking of Houston as like this planning model, but I actually think in this particular sense, they actually are a leader in many senses.

0:39:21.5 Trevor Burrus: There’s a political economy story there too, because if you have gone down a bad path toward establishing a system of privileges and extreme vested interests, which of course is a lot of what government does in many different ways, the only way to get out of it might be that you have to kinda give them a little something in the practical course of moving toward a more free, less planned-​oriented kind of way, which is what they did, they kinda gave them, You want this, here you go, you can have this. But as you point out, the end policy prescription is a ball of Sony. It just is. Why you go that far? Why is that the sensible position here?

0:40:05.2 M. Nolan Gray: Yeah, I think we’re living in a really great moment where there’s a lot of reform happening, so. Right, so of course, you have the MB movement all across the country pushing for the end of the most extreme forms of exclusionary zoning, stuff like single-​family zoning or parking mandates are really, really large minimum lot sizes, all of these things that restrict what people can do with their property and just make it really, really hard to build. And so that’s great. In the near term, I think reforming a lot of those regulations makes a lot of sense, but for reasons I set out in the book, I think we can take the argument a step further. I think for all the reasons that I’ve set out, both in the terms of the contemporary costs and then the historical origins of this policy, I think it’s okay to just admit like, “Hey, zoning isn’t like this good policy that was misapplied that we can do better.” Zoning is deeply dysfunctional, and it has objectives that I don’t think reasonable people today would support, and to the extent that it has, I think real planning applications, it hasn’t really achieved those, and the proof is in the pudding with a lot of US cities. And I think when you really look at what the alternatives might look like, it starts to look pretty desirable.

0:41:16.4 M. Nolan Gray: We can have a city where there’s a lot of flexibility in terms of what land uses can go where, but we can also have pretty clear and transparent regulation on things like impacts, or we can say, Hey, if you want structured land use regulations within your community, you can voluntarily opt in to them, and that’s okay. You don’t need to take the whole city down with you, [chuckle] so to speak. But so I set this vision out, and of course, I’ve tried to stress in the book, I don’t think this means there’s no role for planning, far from it. I actually think we don’t do a lot of things that many people actually think planners do and want them to do.

0:41:56.1 M. Nolan Gray: So of course, I worked as a planner, and the typical planner in the US today just spends so much time micro-​managing the number of parking spaces for street malls or trying to keep fourplexes out of single-​family homes or getting yelled at crazy public hearings on a Thursday at 10:00 AM. This is not the best use of city planning capacity. And meanwhile, for example, a lot of cities don’t even do street plans. So this is why American suburbia ends up having this kind of chaotic and incomprehensible form, is that we don’t actually sit down and do the things that government actually might be relatively good at, which is I sit down and just come up with a street grid and let people do what they want on their property, but they have absolute certainty of like, Hey, this is where the street’s gonna go, this is gonna be the width of the street, and beyond that, go for it.

0:42:46.1 M. Nolan Gray: This is an important thing for municipal planners to be doing, is to stewarding the public realm, and we actually don’t do a lot of that. Planners are so focused on what people are doing on their private property than in many cases, like the actual public realm has just really gone to hell in the US, and we get these streets that are poorly designed, if they’re designed at all, we get communities where maybe there’s not a park within walking distance of where you live, or we live in communities where the school is way out on the edge of town, and it’s designed like a prison compound, and you of course have to drive there, you can’t walk there. I would contend the planners are misused in this sort of crazy zoning system, and then actually that could be much more effectively used doing the things that I think people across the ideological spectrum would agree. Yeah, okay, this is actually what government might be good at, setting baseline rules of the game for urban growth and expansion, and then stepping back and letting cities design themselves.

0:43:41.6 Trevor Burrus: If there’s something very quixotic about some of these plans. I remember at my hometown of Denver, they’re… In the Colorado history museum, there is… You can see the city plan of 1958, which I think was projected to be a 50-​year plan, so we’re gonna plan the city out for up to 2008. If you think about it, it is just kind of bonkers. And so you could do this in two different ways, you could say, alright, let’s just build the streets out and say, Here’s the good sensible street thing, if you wanna put your house there, but we’re not gonna say how many people can live in that house, ’cause we don’t really know what kind of living situation people are gonna need in the future. We might be living like Popular Mechanics Magazine in 1958 or we might be living in an urban hellscape. Either way, we’re not exactly sure what people are going to want to do with their housing and their commercial and their industry in 2008. So that’s the hubris you discussed, ’cause a lot of those plans are like 50 years long, which of course goes against every kind of idea that there’s an organic-​ness to letting people make choices and trade offs and figure out which ones they want as opposed to someone else telling them which ones they’re allowed to do…

0:44:47.1 Trevor Burrus: Yeah, absolutely. I get very high Hayekian on this stuff. So what can government planners know and what can they not know? I think it’s a reasonable case to be made of, Hey, a planner can add real value by setting down and laying some basic rules of the game and saying, we’re gonna have rules on measurable impacts and you know with absolute certainty that extreme nuisance uses are gonna be in certain areas and not this area, and there’s gonna be a street grid, and it’s gonna follow this relative pattern, and there’s gonna be parks every so many blocks. And then beyond that, do what you like it ’cause I think planners, that type of knowledge is absolutely not the type of thing that can be aggregated into a plan. I mean, this is really what zoning is trying to do. Zoning is saying, what use is allowed on every single lot and at what density, over a 50 year timespan. I mean, this is like nutty stuff, right? You don’t have to be like inhaling high Hayek to start to see like some of the concerns with this, right? Like, we just can’t know. Like, imagine how much Denver has changed over the course of 50 years, we just can’t know that.

0:45:56.4 M. Nolan Gray: We can know with relative certainty that, yeah, Denver in 50 years should have a street grid, and Denver in 50 years should have maybe some parks regularly spread out around the city. Great. That’s what planning should be doing. What we can’t know is, Yeah, well, there should be a supermarket on this corner. And this street should just be single-​family homes, and they should have four bedrooms, and, you know, all of this other stuff that gets baked into zoning. And so of course, like these ordinances, the older they get, the more just crazy out of line with reality they are. And you know, in a city like New York City, they’re operating on a zoning ordinances that was largely written in 1961. I would contend that New York City has slightly changed between 1961 and 2022. I’ll give you an example of this right? Many US cities, of course, as I’ve mentioned multiple times in this conversation, impose single-​family zoning. So only like a single-​family home on a single-​family lot, a planning norm that I think was really, really developed in the ’50s through the ’70s. At a time when you know, the nuclear family was really strong, right?

0:46:56.7 M. Nolan Gray: Maybe family sizes were probably double what they were now. Families were larger, you had more multi-​generational families, you needed more space and you had a lot more young children. Of course, in many metropolitan areas, the form of the family has changed, right? More people are living alone. Maybe they want more studio or one bedroom units, or maybe more people want to live in co-​living arrangements that, you know, might involve a private bedroom and a private bathroom, but maybe a shared kitchen. There are all these different small ways that society changes. Zoning just kind of basically just throws sand in the gears, right? And just slows people running these experiments with ways of living and ways of engaging in a city. And I think that’s like, I don’t get too much into this in the book. But I think that’s like a deeper cost of zoning. It’s just all these experiments that people could have been running and all these different ways of living and engaging with the city that we could have been exploring, that we just don’t get to do because zoning keeps cities in a straitjacket. And so, you know, I think there’s a sense in which the project of the book is negative and critical, and, you know, sort of saying, hey, this policy hasn’t worked. It sucks, we should get rid of it. All of which I think is true.

0:48:07.9 M. Nolan Gray: But I think there’s a real positive project here in terms of, hey, what does the next American city look like? This is actually a really exciting opportunity, when you really think of how much zoning has constrained the cities that we live in. There’s all these innovations and all this potential progress that’s just sort of we’re leaving on the table. And that includes planners, right? I mean, we can develop systems of land use regulation, that actually makes cities better and more livable, and more comfortable. And we can have planners do things that are actually socially valuable and useful. And they’re largely wasted today. That’s something that I’ve been surprised. I expected a little bit of blowback among some of my planning colleagues. And the typical… Of course, the person who hates the book probably isn’t going to message me, the person who really hates the book is definitely gonna message me, but the person who’s just slightly irritated by the book is gonna, like, ignore me. But I’ve been impressed by how many people have reached out to me, saying like, you know, hey, I’m a practicing planner. So glad you said this. And I totally hear you. Like, I work with some really great smart people, and we’re just being wasted on the zoning system. So yeah, I think there’s a really, really exciting city waiting on the other end of zoning, and it’s just kind of waiting there to be discovered.

[music]

0:49:29.9 Trevor Burrus: Thanks for listening. If you enjoy Free Thoughts, make sure to rate and review us on Apple podcasts or on your favorite podcast app. Free Thoughts is produced by Landry Ayres. If you’d like to learn more about libertarianism, visit us on the web @libertarianism.org.