Value Capture: DPD, Councilmember Clark Hang Out “No Vacancy” Sign

In her post describing Smart Growth Seattle’s appeal of a proposed downzone of Seattle’s LR3, Erica Barnett explains that opponents of growth say that proposals to create more housing are

Being rationalized [because] the added densities are needed to . . . get people out of their cars, curb sprawl and save the planet from global warming.

The difference between the views of urbanists like Valdez and density opponents like [John] Fox is that the former group thinks that’s a good thing.

Our efforts to support more growth and housing in the city, and the work to stop growth by its opponents, is really about values; what is best for the future of the city, a vibrant place with lots of housing and jobs, or an expensive city with scarce housing that consumes the incomes of poor and moderate income people? Do we value the opportunities and diversity that come with growth, or is growth a fundamental threat to the good life we, already here, have?

It makes sense to be worried about the change that will come with 120,000 new people in coming decades. There will be challenges, but what isn’t as easy to understand is how those worries transform themselves into a values system that holds that growth is bad and that we should use zoning to stop it. Zoning has gone from a way to make life in the city better, to a way to force uses and people apart, to a tool to thwart change.

In a comprehensive and articulate study of contemporary land use law and economics, David Schleicher, makes an extensive case against zoning—or at least zoning as we do it today. It should come as no surprise that Schleicher isn’t a planner, but an Associate Professor, at George Mason University School of Law. His article called appropriately titled, City Unplanning, provides a solid intellectual grounding for our appeal. At the heart of DPDs proposal is a planner driven effort, urged by Councilmember Clark and her NIMBY supporters, to limit what we’re afraid of rather than encouraging what we want.

Schleicher points out that zoning became transformed from a way of dealing with nuisances—pigs in the parlor to quote the Euclid decision—to becoming a tool for planners to control the future.

Zoning regimes did far more than reduce traditionally-adjudicable nuisances. Particularly after World War II, zoning policy expanded from traditional height limits and “cumulative zoning” — which barred higher intensity uses like heavy manufacturing from single-family areas but not vice versa — to more aggressive techniques that gave planners both more flexibility to condition approvals on meeting conditions set by the city and more ways to restrict building, including non-cumulative zoning rules that specifically assigned uses to specific areas.

But this shift is running against a growing realization that agglomeration—the pushing of people and uses together—is not only better for the environment, but a huge benefit economically and socially for a community. And zoning, particular punitive and restrictive zoning, undermines agglomeration economies.

Further, certain agglomerative factors, particularly information spillovers between highly-educated residents, have become increasingly important in the modern economy. As zoning regimes reduce density and separate individuals and businesses that would like to be near one another, the increasing empirical validation of the importance of agglomeration economics has helped explain how strict zoning regimes harm the efficiency of property markets and regional economies.

What is best, if we value change and diversity, is less strict zoning that promotes not just zoning that is less strict, but also agglomeration of uses and people. But that isn’t what’s happening today in Seattle.

While economic thought has moved substantially against increased stringentness in zoning (and intellectual movements inside city planning have pushed for increased density and mixed use development), practice has moved in the other direction. Zoning policy has gotten much, much stricter over the last 30 or so years, and has done so in ways not predicted by those who study the political economy of urban development.

Schleicher connects this strictness with housing prices. More zoning means higher prices. It just does. And why that would be the case is obvious: add more rules to the production of anything and the price will go up. The point is not to eliminate the rules, but to make the right ones. But the latest proposal instigated by Councilmember Sally Clark and promulgated by the DPD isn’t a wise set of rules, but a response to what a few dozen neighbors are afraid of over and against the growth of a region. The reduction of development capacity and more rules contributes to the gap between the costs of housing and the price of housing.

Now, such gaps have emerged in virtually every metropolitan area on both coasts of the United States and a large number of inland regions as well. And where such gaps have emerged, they have grown substantially. In the most regulated regions, legal restrictions on the supply of housing are likely responsible for as much as half of the cost of any given housing unit.

So Councilmember Clark and DPD’s proposal to make housing harder to build in the LR3 doesn’t fulfill the original charge of zoning to protect people from harm, but it also codifies the idea that the LR3 isn’t a place new people coming to the reason should look for housing because supply there will be suppressed. Councilmember Clark and DPD are hanging a “No Vacancy Sign” outside our neighborhoods best equipped to welcome new businesses, ideas, and most importantly, people.

That’s the basis of our appeal on environmental grounds, because Councilmember Clark and DPD have set the City against the principles of the Growth Management Act. Here’s Schleicher:

These changes in the strictness of land use policy have caused massive shifts in population across the country. Rich, restrictive regions like San Francisco and Boston have seen massive increases in housing prices but only small increases (or decreases) in population. At the same time, there were huge population inflows into less productive but unrestrictive regions like Houston.

What values will prevail in Seattle? Will we grow where it makes the most sense, provide the best opportunities for agglomeration, and increase housing supply to lower price, or will we tell new people to go somewhere else? Let’s see what the hearing examiner says next month.

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