Regulatory Review for the States

Regulatory Review for the States

Housing regulations are ancient and often motivated by obvious risks. Boston banned thatched roofs in 1630, the year of the city’s founding, in the wake of an urban fire. New York’s Tenement Acts first focused on urban fire risk in 1867 and then moved to mandate better ventilation and light in the interest of reducing contagious disease. Single-use, or Euclidean, zoning was also originally justified, in part, as a tool to keep noxious industrial activities away from residential dwellings.
Structural safety continues to be one reason that states and localities restrict new construction with building codes, but over the years, new rationales emerged for limiting new development. New York City’s landmark zoning code of 1916 mandated setbacks to ensure the flow of light, in reaction to the massive shadow cast by the Equitable Building. After the destruction of New York’s old Penn Station, a new era of landmarks preservation emerged where individual structures or even entire neighborhoods are placed under heavy supervision to limit change.
Perhaps the most potent form of current land-use regulation is the restriction of minimum lot sizes, which can range from small slivers of land to 60 acres in places like Marin County, California. The motivation for these laws varies, ranging from desires to reduce congestion or local expenditures to a wish to preserve a traditional rural character. But there is little doubt that mandating a minimum amount of acreage ensures less construction in high-demand areas, and, if the laws of supply and demand still operate, this reduced supply will also raise prices. Evidence from several studies suggests that these restrictions do, in fact, make places less affordable and thus adversely affect prospective home owners. Consequently, rules that limit construction can effectively zone poorer residents out of certain areas, creating segregation via regulation.

Edward Glaeser and Cass Sunstein

National Affairs

Summer 2014

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