Libertarianism and Zoning

One reason why libertarianism is such a hard sell is that we have no political experience with any set of institutional arrangements other than the nanny/regulatory/welfare state. Accordingly, it is difficult for voters to imagine how a polity built on laissez faire principles would address the various social problems that may arise in a modern society.  Zoning is a great example. It is ubiquitous, and critics across the ideological spectrum have accused it of causing a wide variety of harms, including housing inflation, environmental degradation, thwarting educational choice, and so on. Yet it endures, with nary a dissenting voice in mainstream politics.

Of course, as set out in my Libertarian Philosophy in the Real World (pp. 42-7), libertarians’ primary objection to zoning is rights-based. That is, it “precludes perfectly innocent activities that pose no threat to the legitimate interests of area residents.” (LPRW, 42). However, as just indicated, it is impossible to separate rights claims from utilitarian considerations. If the absence of zoning results in vicious chaos, producing widespread, serious injury to homeowners, renters, and society at large, we would be forced to rethink our principles. Accordingly, I devote substantial attention in LPRW to arguing that this is not the case. A near-final draft of this section of my book is reproduced below.

The popularity of this regulatory/bureaucratic scheme in the face of such objections is primarily attributable to the widespread perception that it is necessary to preserve property values in middle class and affluent neighborhoods by preventing the intrusion of lower income residents and obnoxious uses. But zoning is not required to protect people’s legitimate expectations, for three reasons. First, the repeal of zoning would not lead to a chaotic free-for-all where major industrial operations and bustling commercial enterprises move into sleepy residential neighborhoods. This is because businesses are driven to site their activities by financial and operational considerations that will naturally segregate them from residential neighborhoods.

For example, even in the absence of zoning, Toyota will not locate a new assembly plant in a middle class residential neighborhood because (among other things): the cost of land acquisition would be unnecessarily high; the plant would not (in all probability) be close enough to major transportation hubs, such as railroad terminals, interstate highways, ports, and airports; and it would be too distant from its pool of (primarily) blue-collar workers.  Similarly, Siegan has observed, “gas stations and shopping centers will only locate on major thoroughfares because they require ready auto accessibility to succeed.”[1] In other words, it is reasonable to expect that in the absence of zoning a “spontaneous order” will emerge, i.e. a harmonious, self-generating arrangement that in Hayek’s words “is the result of human action but not human design.”[2]

Second, real property owners can often protect themselves against unwelcome land use(s) by entirely voluntary means.[3] To take a simple example, suppose neighbors A and B own adjoining homes somewhere in suburbia. Both owners strongly prefer to live next to another single family residence and also believe that the resale value of their homes will be enhanced if potential purchasers can rely on this limitation remaining in force.

Accordingly, they agree to place restrictive covenants on the deeds of their respective properties, which will bind all future owners. Obviously, there is nothing to preclude A and B from attempting to widen the scope of their agreement to include neighbors C, D, and E before implementing it.[4] They could, for example, condition the covenant’s effectiveness on getting these neighbors to agree to the same restriction. Moreover, as mentioned above, new developments will generally be accompanied by restrictive covenants designed to protect the quiet enjoyment of these residences, while allowing complementary commercial uses.

Finally, even if a homeowner is faced with an obnoxious land use that violates his rights, a laissez faire system would not leave him without recourse. Prior to the advent of zoning, disputes between neighbors regarding land use were handled through the common law tort of nuisance, which dates back to medieval England. Most broadly, a “nuisance” consists of a “non-trespassory invasion of another’s interest in the private use and enjoyment of land.”[5] Accordingly, an aggrieved (typically residential) landholder could bring a private cause of action seeking compensation or an injunction against the allegedly unneighborly use, i.e. a gas station, factory, funeral parlor, etc.[6]  While the use of this tort for purposes of resolving land use conflicts has largely been displaced by zoning ordinances (which supersede the common law), the tort of nuisance remains good law, and thus an available remedy if zoning ordinances were repealed.

In short, there is no reason to believe that the repeal of zoning would have disastrous consequences. In fact, there are at least as good grounds for supposing that there would be net benefits. The fact that zoning persists, without substantial controversy, simply testifies as to how difficult it will be in our lifetimes to realize anything even remotely resembling the libertarian vision.
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[1] Siegan, “Best Zoning,” 128.
[2] F. A. Hayek, Law, Legislation and Liberty: Vol. 1, Rules and Order (London: Routledge, 1973), 36. The language quoted in the text originates with the 18th century Scottish philosopher, Adam Ferguson.
[3] See Ben O’Neill, “How Zoning Rules Would Work in a Free Society,” Mises Daily (blog), June 17, 2009, http:mises.org/daily/3506.
[4] See Ellickson, “Alternatives to Zoning,” 711-9.
[5] Restatement (Second) of Torts, Vol. 4, sec. 821D (American Law Institute 1979).
[6] See Ellickson, “Alternatives to Zoning,” 719-22.