Upzoning Bills: Free-market Policy or Government Coercion?

The broad upzoning of land—which has become popular out West—may finally be moving East. In 2019, Oregon, California, and Minneapolis set the planning world afire by proposing—and in some cases passing—bills that ban single-family zoning in certain cities.

Now Eastern states are following suit. In late 2019, Virginia House Delegate Ibraheem Samirah, who represents parts of Fairfax and Loudoun Counties, proposed H.B. 152. The bill would legalize duplexes on any land statewide that’s now zoned for single-family residential (single-family homes are still allowed, and localities can still police design, setbacks, and other criteria). This week, Maryland House Delegate Vaughn Stewart will introduce a “Homes For All” package of bills, which won’t upzone all of the state, but focus on areas that are heavy in wealth, jobs, and transit.

All these bills were proposed by Democrats, and along with the upzonings, are coupled with provisions that resemble left-wing activist government. For example, Maryland’s “Homes For All” package would also include funding for public housing and new tenants’ rights provisions. Another bill from Samirah would further empower Virginia’s Housing Development Authority and its Department of Housing and Community Development. But the upzoning bills themselves are an act of deregulation. They allow homeowners to do more with their land.

But the bills have gotten strange responses from people who identify as politically conservative and might normally prefer economic liberalization. Ryan Williams, head of the Claremont Institute, called the Virginia bill a “disaster” and a “plan to racially/multiculturally re-zone every neighborhood in America.” In a now deleted tweet, Luke Rosiak, of the Daily Caller, wrote on Twitter that “state lawmakers want to override local zoning to force multi-family housing in EVERY quiet suburban neighborhood—doubling density—because suburbs and exurbs are racist.”

http://twitter.com/RpwWilliams/status/1209243741682360320

Conservative writers don’t cover the zoning issue nearly as much as liberals, but in past cases where they have, this sort of rhetoric flares up. When President Obama’s Department of Housing and Urban Development (HUD) advanced the Affirmatively Furthering Fair Housing Rule, that too was an effort to weaken restrictive zoning in wealthy areas. It got the same sort of criticism from conservatives, who framed it as an act of government coercion.

But this mischaracterizes the issue. Upzonings are an act of liberalization: they weaken a government regulation that creates cronyism and exclusion. The use of broad, incremental upzonings are perhaps the best land policy that any city or state could hope to accomplish politically nowadays. Contrary to what critics say, they would not radically alter exurbs and rural areas by shoving in high-rise housing. As these bills are written, they would spur the incremental redevelopment of single-family housing into 2/3/4-plexes, or just allow Accessory Dwelling Units (ADUs) on those lots. They would likely occur in urban or nearby suburban neighborhoods, where land values are highest and low-intensity zoning is the least practical.

Crucially, this would protect rural areas, by further concentrating growth near city centers; all while producing growth of marginal impact. In one neighborhood scenario, if 40% of single-family homeowners chose to add an ADU, and another 20% of homes were demolished and redeveloped as fourplexes, the neighborhood would double its housing stock without significantly changing its character.

Broad upzonings would also have economic benefits for both homeowners and renters. They would benefit homeowners by democratizing the wealth involved in land ownership. Right now in U.S. cities, restrictive zoning causes under-building on most land, but high densities on specific lots. This causes hyper-inflated values for those lots, which draws speculation by investors who can afford to purchase them. This model rewards big real estate interests, while suppressing everyone else’s land values.

A broad upzoning, by contrast, would gradually increase the value of everyone’s land, since it allows more to happen by-right across a city. This would help thousands of single-family homeowners, who could, for example, build and rent out an ADU on their lot, creating an extra source of income. It would also help renters, by increasing the available housing stock in well-located, amenity-rich neighborhoods. Indeed, broad upzoning is a case where oft-derided “deregulation” would benefit large swaths of society. This should make it an obvious policy win for anyone of classical liberal persuasion.

Where conservative resistance may be valid is in the language Democrats use to tout these bills. For example, after Samirah proposed the Virginia one, he tweeted that it would help facilitate more public housing in rich areas. But because public housing has such a fraught history in the U.S. —and a poor reputation in my home state of Virginia—it’s unclear why building more should even be a goal. It’s definitely not the message that will win bipartisan support.

Overall though, these upzoning bills should get support from across the ideological spectrum. They satisfy the left-wing call for social equity, class integration, and environmental sustainability; and the right-wing call for economic growth, deregulation, and supply-side economics. Hardly a case of “central planning”, they are a gradual return to liberalized markets.