How Zoning Rules Would Work in a Free Society
Like most other government legislation, zoning laws are a violation of property rights. They involve forcibly imposing a restriction on legitimate private-property use through legislative fiat. A person, who has acquired property through homesteading or through voluntary trade with another person who legitimately owned the property, should rightly be able to use his property in any way that does not intrude upon the property rights of others. FULL ARTICLE
Comments (52)
fundamentalist
Excellent article! Readers should follow up this one by reading "Jane Jacobs--the anti-planner" at http://mises.org/daily/1247. Jacobs details the history of urban planning and zoning and its destructive effects.
People in the West of the US often admire the "quaint" towns of the East, the easiness of getting around and how close to residential areas the shopping is. This is especially true of Europe. Jacobs shows in her books how urban planners destroyed that wonderful lifestyle for cities built after 1900. They insisted on segregrating activities with zoning laws and isolating buildings with vast expanses of grass and trees.
A very interesting section is her look at parks and how that most parks have become havens for criminals because they were planned instead of allowing them to develop organically.
Published: June 17, 2009 8:48 AM
Casey Boone
This may work for town complexes constructed by a single company or multiple ones built together by one or more companies, but my concern is that this does not apply to raw homesteading without introducing a government entity.
For example, suppose a basic scenario of 2 people (Alex and Bob) living on an island with room enough for 3 plots of land.
[1][2][3]. Alex picks plot 1 and homesteads it. They have, in this way, every right to plot 1, but no rights to plots 2 or 3, which are unowned as of yet. Bob comes along and wishes to construct an unsightly skyscraper. Alex really doesn't want a skyscraper on Plot 2, but cannot claim any zoning rules on plot 2, because he does not own it. Instead, he can only make offerings to Bob in hopes to strike a deal (I give you this, and you agree not to build your skyscraper on Plot 2), which Bob may or may not accept. If Bob does not accept, he could just go ahead and build the skyscraper on Plot 2 anyways, and Alex is unhappy. The only other option to Alex is to perhaps beat Bob to plot 2 and homestead it as well, and then restrictively sell it to Bob. But this is unlikely to happen, because Alex probably wouldn't know about Bob's plans until Bob is already there and ready to build.
I do not see how zoning rules can apply to this scenario without introducing a government entity - that is to say, granting Alex some kind of rights to Plot 2 that he does not actually have since he did not homestead it.
Of course, don't get me wrong, I'm a fan of Free Societies, this is just a doubt I've always had in my mind, and ultimately I think it just comes down to playing the game and hoping for the best. Sometimes it helps to just buy a house in the middle of an already developed place so that you know that the neighbouring properties won't suddenly grow up 20 stories.
Published: June 17, 2009 9:29 AM
roy
Casey... if Bob was misguided enough to spend limited resources in building a skyscraper in a deserted island... I'm sure Alex would end up being able to buy plot 2 from Bob for peanuts after the housing bust!
;-)
Published: June 17, 2009 9:39 AM
Michael A. Clem
Excellent article on zoning and alternatives. Casey, this was addressed in both the article and by roy. The value of land varies, and its perceived value determines what uses the land is put to. There's no profit in building a skyscraper on a deserted island, even assuming he could get the necessary materials and tools to build it! So your scenario just doesn't make sense.
Most such scenarios involve irrational decisions such as this ("suppose some eccentric bilionaire decides to..."), but even accepting the possibility of such irrationality, I fail to see how applying to the irrational decision-making of political bodies would do anything but encourage more irrational land use, not less. Your wealthy eccentric is always going to have more power to influence governmental boards than your less wealthy landowner who will be affected by it.
Published: June 17, 2009 10:42 AM
fundamentalist
Casey: "If Bob does not accept, he could just go ahead and build the skyscraper on Plot 2 anyways, and Alex is unhappy."
It's not the state's job to make Alex happy. Nor is it the job of property law to make everyone as happy as possible. Neither is the purpose of zoning laws to make everyone happy, except the socialist planner. Alex may choose to be unhappy about Bob's skyscraper, but unless Bob's skyscraper infringes upon Alex's property rights, then Alex will just have to be unhappy. Or he could sell his property to Bob.
Published: June 17, 2009 11:08 AM
greg
Private homeowner associations as a model of private zoning? It is clear to me that the author never has lived in a neighborhood with a HOA.
Yes, you have a set of rules that is provided to you at time of putting an offer on a piece of property within the HOA. But these rules are administered by an elected board that put their own slant on the rules. Furthermore, the HOA with a simple majority can change the rules that take away the rights of the minority. And finally, don't pay your dues and your house could be foreclosed on and sold for past dues.
If this is the private model of zoning, I don't want any part of it!
It is also clear to me the author knows little of all the aspects of land use planning. Without getting into great depth, land use planning trys to balance development with public services such as police, fire, schools, roads, sewer, water, power. They also try to provide buffers between industrial, commercial, multi-family, single family and agricultural land.
Land zoning is not cast in stone, there are changes. And in real estate investment, the big money is made in these changes. For example I know of one developer that bought a small farm. Before the transaction closed, zoning was changed and Costco entered into a contract to purchase the land from the developer. The developer went into closing where he bought and sold the property on the same day and walked away with over $1 million.
My point here is don't fight the system because you will loose. Understand the system, work within it and profit from it.
Published: June 17, 2009 11:17 AM
Michael A. Clem
land use planning trys to balance development with public services such as police, fire, schools, roads, sewer, water, power. They also try to provide buffers between industrial, commercial, multi-family, single family and agricultural land.
Exactly right, greg. They try to protect their utility monopolies and create artificial distinctions and barriers between different uses, thus creating the modern urban mess we have today, such as our traffic problems, and the higher costs of urban living. Getting rid of zoning and urban planning is the only way to truly give us better, more livable cities.
Published: June 17, 2009 11:32 AM
David C
The recent economic downturn is bad enough, but not allowing people to do business, trade, and commerce in their homes is destructive.
Also the rise of zoning laws and the rise of the Federal Reserve are not a coincidence. By pumping an unlimited amount of printed up money go into malls and real-estate, a natural consequence is for real-estate to monetize and for people to want to control it's value. Once the FR system dies, that pressure to control real-estate value will die and the system will once again focus around optimized production instead of control over land values.
Published: June 17, 2009 11:33 AM
John
Casey,
I think libertarian property-rights theory addresses your objection completely. Maybe the owner of plot 1 is concerned that the sun will be blocked from his property, which is necessary to get the full use from his property on plot 1 (a swimming pond, or a garden, or something). In this case, it is completely illegitimate for anyone to build anything that blocks the sun from plot 1, since the owner of plot 1 was there first. He homesteaded the property, with its full access to the sun and the rain, and any intrusion into his access to them is a violation of his property rights.
If someone had homesteaded plot 2 first, and then someone moves next-door and makes his home there, and later the owner of plot 2 decides to build a building that blocks the sun or the rain or something, I think the owner of plot 1 has no right to complain. But maybe there is something more to property-rights theory that gives plot 1's owner a reasonable expectation that nothing about plot 2 will change that drastically. Or maybe plot 1's owner would have to make an agreement with plot 2's owner before moving in next-door, to ensure that his expectations are upheld.
If you're just saying you don't want an ugly building next-door, you have no complaint based in property rights. Many other economic factors, as mentioned, will typically prevent this from happening. Not always, but the benefits of freedom outweigh the costs, as always.
Published: June 17, 2009 11:39 AM
John
greg,
So, in other words, the characteristics of HOA's that make them most similar to governments are their most objectionable characteristics? That sounds about right.
Published: June 17, 2009 11:42 AM
Casey Boone
fundamentalist: Yes, this has essentially been my take on it. But then to discuss zoning rules in this situation are moot, which is the crux of my post.
roy and clem: The island concept is just to create an isolated situation to analyse without introducing more complex variables. I don't mean a literal island which may be unprofitable (although I don't know, islands tend to be great tourist traps - all the more reason to build a motel in the center of the island).
John: Yes this does clarify some things, although here you're substituting 'zoning rules' with rights claims, so yet again zoning rules are moot, and my post holds.
So I digress that zoning rules do not apply to raw homesteading, as before, but that this is essentially a non-issue or a rights-based rather than zoning-based argument.
Published: June 17, 2009 11:59 AM
s burgess
im not to sure how building permits work in the states.but its been burden to many people in my town nelson new zealand.the councel has the right to decline any right to build a home over the last 20 years the demand for homes has been massive with many people wanting to move to nelson yet there was only a token of 20 units for cheaper homes against who knows how many homes for the rich in the thousands at least.it been a classic exsample of councels choosing who they want in the town.mean while the poor students the old pay large amounts to live in slums.only when unemployment was at 7 not % but people out of over a hundred thousand did they even start to build the 20 units .with so much industry in nelson farming fishing tourism many have missed out on opportunities not avalible in the rest of the country.ive come to the conclusion that if someone wants to split up there land for sale or build a home no one should have the right to stop them.if say i dont want the risk of someone building something next to my land then i should pay the owners for the right or come to agreement(more likely givin they may want the same deal) with them not to build it.
Published: June 17, 2009 12:37 PM
gene
It is interesting the author noted that associations, etc., could enter into voluntary agreements or contracts with restrictions, etc.
While this may appear "voluntary" to those few who enter into agreement upon conception, they certainly aren't voluntary to those who follow [nor are they voluntary to those who dissent but are in a minority]. If one wishes to purchase a parcel or a completed house but has wishes other than what are described in the "voluntary" agreement, this is little different than "zoning", other than one is the government and one is private, so I suppose according to libertarian logic, that makes it better?
You can always live somewhere else in either situation, so that is not the consideration.
It seems it is easy to forget "those who follow". The power in mainstream [taking liberty with mainstream!] "free" thought seems to lay with who get there first.
Published: June 17, 2009 1:48 PM
Shay
Gene, the point is that the restrictions imposed by the association were decided on by the owners, and are therefore the best that they can come up with. If someone considers moving in but finds the restrictions unacceptable, he should look elsewhere, as he would not get along with the people already there. If his differing taste is shared by others, he should be able to find a place with acceptable restrictions. Because the restrictions don't come from a central government entity, they will vary widely if people's taste varies as well.
Published: June 17, 2009 2:53 PM
Larry N. Martin
Shay's got it right--freedom means freedom to associate with those you agree with, not force your own views of "freedom" on those you don't agree with. The private, voluntary solution has the value of economic feedback, and it offers more options than a governmental "one-set of rules-fits-all" solution. Thus, people can choose more restrictive options, if they want, but they would have to bear the burden of the higher costs for those options, instead of "socializing" those costs onto others. Freedom means more opportunities and choices, not a guarantee that all your desires will be fulfilled. Government guarantees generally mean nothing.
Published: June 17, 2009 3:04 PM
gene
Here's my point.
First I am not arguing for "zoning", this is an argument against it.
If we are supporting the individuals right to private property, then are we not supporting the right to purchase property at the asking price? Wouldn't a regulation, no matter how it is imposed whether by law or agreement, that states the buyer cannot "purchase" a house and paint it green be a restriction of the freedom to own property?
Is it the privelege of the seller of the land, which according to basic property rights, intiated under the homestead principle of ALL to claim land and convert it to their "private" property by adding their labor [or engage in a non-coercive exchange for], to now limit who he wishes to do the same, when the buyer wish to apply his labor or exchange[meet the purchase price]?
If the buyer is not imposing "harm or injury", such as turning a neighborhood into a toxic waste dump, what gives the seller and his associates the right to limit the freedom of the buyer to "land", that which is most basic to sustainance, when he can meet the principles of basic property rights?
This appears to be nothing less than a smaller scale version of governmental zoning. If the association then has "representatives" that can change "bylaws" or refers the vote to the majority, where is the big difference?
Does the freedom of associating with people who have similar "tastes" and preferences override the private property rights?
Citizens can do whatever they want [barring harm and injury of others] on their property. Contracts and agreements that restrict this, what owners do on their own property, is a violation of property rights. That is, unless the homestead principle doesn't apply anymore?
Published: June 17, 2009 3:36 PM
Johan
Since the author is from Australia one could take Sydney's beautiful harbour as an example. If there's no zoning laws one might expect that the owners of the properties next to the water would build as tall as possible. This is economically rational and also good for all residents in the building. However there's not a pareto optimality since a lot of people will get their views blocked and the city would loose a lot of it's unique attractiveness which might be negative for tourism and the overall economy.
I have hard to see how private zoning agreements could fix this problem? At least I'm concerned about the aesthetics of cities and prefer a well arranged city like Sydney over a mayhem of non planned skyscrapers in say Shanghai.
Published: June 17, 2009 4:04 PM
HM
Like so many Libertarian ideas, an interesting intellectual idea but not very usefull in practice. Kind of like Marxism...
I'm not sure what planet you folks are from, but you are obviously viewing America thru different car windows than myself. Even with zoning laws, so much property is a disgrace. Ever been to downtown Detroit ? LA's east side ? The backroads in Alabama ?
Anyway, it was an interesting read. Thanks for the chuckle.
Published: June 17, 2009 5:25 PM
BioTube
None of the places you mention are exactly icons of prosperity; using them to argue for zoning laws is a joke.
Published: June 17, 2009 6:09 PM
Mashuri
Johan,
The point of private zoning is that people are not forced by government to pay for others' benefits. On your Sydney example, I imagine that property owners who want to keep their view of the ocean would be willing to enter into contracts with the owners of said coastal property, compensating them for not building too high. This way, the cost of keeping an ocean view is assumed only by those who stand to benefit, rather than an entire tax-payer base. This is only one example, of course, and the beauty of a free market is that endless solutions to these "problems" would arise -- as opposed to one-size-fits-all mandates from government.
Published: June 17, 2009 6:16 PM
gene
Mashuri,
What you are implying by your example is that the lot "closest" to the ocean "owns" the ocean view proportionate to the amount of capital which they have available to spend on building "up".
Because of this, the lot behind the ocean front lot must now match the capital and the future return on any story above a certain height that they want to prevent, in order to preserve their view.
Because of this, the lot behind the lot behind must also match, etc, ad infinitum...........
So, the price [value] of the lots are now determined by the ability to "block" the ocean view rather than the ability to view!
The issue is not being able to "purchase" the view, as the view is there to all until someone is able to "purchase" a barrier to view which allows them to possess more view than those behind.
In other words, their access to more capital than the next guy, allows them to take value from those behind and add value to their own parcel.
In some sense, it has the same effect as zoning in a upside down sort of way.
Maybe it gets down to who you believe "owns" the view?
Published: June 17, 2009 6:42 PM
Ben O'Neill
Thanks everyone for your comments on my article. I think there are a lot of good questions that have been raised, which I will try to address:
Casey: Thanks for your comments. The three plots example you give is a good way of boiling the problem down to essentials, so kudos for that. There are two points I would like to make about it. The first, which I mention in the article, is that irrational land uses like this are unlikely to arise, given that (in a free society) people build property with a view to either their own enjoyment or profit from the sale of the property (or both). The second point, which John raised, is that libertarian property-rights theory protects certain features of one’s property, which can (in some cases) include access to sunlight, water, etc. My understanding is that the common law has a tort of nuisance which used to deal with these kinds of situations before zoning legislation came into play. This kind of cause of action could potentially be used to get an injunction against the building of a skyscraper which would block the sunlight to one’s own small property. It seems to me that these kinds of laws would still exist in a libertarian legal system (though I am open to debate on this point). I think you would have to look more deeply into tort law and libertarian property-rights theory to see exactly whether these things would apply.
Greg: I find it is usually best not to make self-assured assumptions about the living arrangements of an author one has never met. In point of fact, I live in a small townhouse under a body corporate arrangement analogous to the homeowners’ associations you mention. It is correct that these bodies corporate generally run using a majority elected board who are charged with administering the rules of the body (though there is no reason why other arrangements could not be made). However, these rules apply mainly to the common property areas in the complex. Individual homeowners retain a far greater measure of inalienable rights against the resolutions of the body corporate than they do against their government. Moreover, in my experience, the other home-owners in complexes like this lack the power-lust and busy-body mentality of government bureaucrats. If you don’t want any part of it, that would be up to you in a free society – precisely the point of my article.
One question that arises in your aversion to HOAs is this: if the idea of limited majority rule within such a small body worries you so much, then shouldn’t zoning legislation by of a government with almost total majority rule and wide coercive powers be even worse?
You mention an example in real estate development in which a developer bought a small farm and then had the government change the zoning so he could immediately sell it for a huge profit (over $1m on the same day). You then advise that, rather than fight this corrupt system, I should work within it to profit from it. You will have to forgive me, but I think I will choose not to establish political connections with corrupt zoning officials in order to fleece small farmers, if you don’t mind.
gene: Thanks for your comments on the article. I’m afraid fail to see how buying into an existing complex with restrictions on property use is involuntary. You can choose to accept the terms, or you can look elsewhere. The “purchase price” you mention can include more than just money. It can include whatever consideration the seller is asking for. Moreover, if the seller has restricted the use of his own property by his own restrictive covenants with others, then he simply has no right to sell his property unencumbered, since he does not own it unencumbered himself (he cannot sell rights he does not own). In my view, this is not analogous to government zoning legislation since the former are restrictions imposed by contractual agreements by genuine property owners.
HM: You say “even with zoning laws, so much property is a disgrace” [emphasis added]. I think if you reflect on the consequences of zoning laws and government ownership of property, you will see that these things contribute to the degradation of property, rather than mitigate it.
Cheers,
Ben.
Published: June 17, 2009 8:33 PM
Franklin
So then, HM, what is your point?
"...not very useful in practice..."
Okay, so then I presume you endorse zoning as effective and appropriate?
But then you say, "...even with zoning laws...property is a disgrace."
So which is it? Can't have it both ways.
As an aside to those who support the voluntary associations, I've witnessed, and been directly impacted by neighbors, who all acknowledged the neighborhood covenants (so-called private zoning laws). After a time, some neighbors just chose to ignore them. Tried pleading, reminding, firmly citing... I and the rest of the neighborhood were confronted with a "tough tooties" attitude.
Sure, we could have gone to court and had it all arbitrated (gotta love the irony, eh?) but wasn't worth it.
I've come to believe the market works best with a strict propertarian approach. Local covenants, zoning rules, voluntary associations, all claptrap.
If it ain't my property, I've got little to say about it unless it's polluting my stream.
Published: June 17, 2009 9:25 PM
gene
Hi Ben,
Thanks for the fine article.
I guess my question would be, should non-owners be allowed to restrict the use [outside of harm and injury] of property owners?
If so, then it certainly could be argued that "government" zoning that was passed by vote or representation would also be okay. Those who are purchasing "zoned" property can also choose to accept the terms or look elsewhere [zoning is usually county or state wide, not national, but even if it was, one could still look elsewhere].
Because there was a vote, or representation, is it not also 'consentual'? I may not agree with the zoning, but maybe there were also dissenting votes when the original agreement was created.
A "purchase price" or "contract" can never violate basic rights. Do we have a basic right to do as we wish with our own property? Or can we be contractually bound to perform certain acts or not, for the indefinite future on property that we hold free title to? If that is true, wouldn't we want to consider that type of property "collective"?
Published: June 17, 2009 9:36 PM
RWW
At least I'm concerned about the aesthetics of cities and prefer a well arranged city like Sydney over a mayhem of non planned skyscrapers in say Shanghai.
Yes, and you love to force your preferences on everyone else.
Published: June 17, 2009 10:11 PM
Ohhh Henry
From what I've heard about Canberra, if one lives there one would certainly become an expert on zoning.
On the subject of private enterprise and zoning, I once witnessed a bunch of hi-tech owners and managers shoot down a proposal to build a McDonalds among their temples of tech. Doesn't go with our clean, green image. It'll be an eyesore, blah, blah. But of course it was their own employees who would've patronized the restaurant right next door to their offices, and since the restaurant wasn't built they continued doing what they did before, namely, driving or walking farther away to other restaurants and taking longer lunch breaks than they would have otherwise.
Similarly I saw the government shut down and evict an auto garage which was right next to the campus of a very large and very highly regarded (by the government) hi tech company, because the "image" was all wrong for that neighborhood. You know how much time workers waste fooling around dropping their cars off at the nearest garage three miles away and waiting for a shuttle to take them to work, and then taking off from work early to get to the garage before it closed? (and dragging another worker away from work to give them a ride there)
That large, shiny hi tech company is now BANKRUPT and the clean, green hi tech campus the government was so proud of is now turning to weeds.
So much for "zoning".
Published: June 17, 2009 10:24 PM
scott t
"A "purchase price" or "contract" can never violate basic rights. Do we have a basic right to do as we wish with our own property? Or can we be contractually bound to perform certain acts or not, for the indefinite future on property that we hold free title to?
i wondered about this too. is it like contracting that the sky is green...is property really property then?
personally i believe property should be under the property owners full control.
Published: June 17, 2009 11:39 PM
Shay
Scott T, the original owner has full control of his property, which is why he can voluntarily give up some in exchange for others around him doing the same, so that he benefits more than he sacrifices (the essence of any voluntary exchange in capitalism). If he then sells the property to someone else, the new owner can't just ignore these previous commitments, as they are effectively part of the property (or so I understand). All the current owners can of course get together and make changes or entirely eliminate these restrictions at any time. That is one of the central points, that the current owners and only the current owners determine what the current restrictions are. They don't have to deal with outside interests making the rules unfavorable, or making one-size-fits-all rules.
To gene, who asked what is different about someone looking to buy and facing either government zoning or owner-decided restrictions, just consider a hypothetical situation: the government dictates uses a family must make of the various rooms in their house. Compare that to each individual family deciding; in either case, there will be rules about what rooms are used for and how they are kept, but it's clear which one would be more desirable.
Published: June 18, 2009 12:51 AM
Gil
It should go without saying, Johan and greg, that 'views' are 'commons'. You don't 'own' views you merely have the luck of enjoying whilst no one else does anything to disturb it. An average schmoe who has a good view of the beach along his back verandah has no claim to the view unless actually owns the land right up to beach. If the homeowner doesn't and a develop buys up the land and builds a large apartment complex right in the path of the homeowner then it's tough cheese. By the same token someone who has solar panels on his roof and gets a great deal of free electricity ought to have no claim to sunlight he receives since the Sun nor the atmosphere nor the photons that travel from the Sun to his solar panels are his to claim (except when they pass into his property boundary). Should a developer build a large apartment building that cuts out virtually all of the light that would otherwise hit the solar panel then it's 'tough luck'. It would be the same as villagers who use water from a nearby stream for everyday living - if a develop buys the land upstream and dams it off to irrigate a large-scale farm then it's tough luck to the villagers as they have no right to claim ownership of H20 molecules that happens to be upstream on someone else's property.
Published: June 18, 2009 1:08 AM
Fred Mann
I would add that, in a free market, insurance companies would likely play some role in "zoning".
If it could be known in advance that a certain structure may cause conflict, the insurance company may be reluctant to insure the structure and/or the builder of the structure if he is to reside/frequent that location. For example, if one plans to build a brothel in an area with an already-established family-oriented population, the insurance company would reasonably predict that this venture would be met by protests from his neighbors. If the brothel-builder went ahead with his plans, it is very possible that violence or property damage would result -- fights, persistent vandalism, etc.. Insurance companies would certainly be able to predict these types of problems in advance (or they'd learn to, as real conflicts arise), and would either refuse to insure the brothel builder, or raise his premiums. This would create an obvious financial disincentive to build structures that would cause outrage and/or heated conflict.
Published: June 18, 2009 2:30 AM
Artisan
@ GIL "By the same token someone who has solar panels on his roof and gets a great deal of free electricity ought to have no claim to sunlight he receives since the Sun nor the atmosphere nor the photons that travel from the Sun to his solar panels are his to claim (except when they pass into his property boundary)."
Oh yes? That's an arbitrary interpretation of homesteading I would say.
If someone builds a mill down the river, he has no claim to the water flow that runs his business then, because "the rain dripping down from the mountain are not his to claim"
Frankly, I see the zoning problem as just one more remote attempt to put reality to the libertarian society concept. There are many reasons to think that a society without monopoly government would reorganize around a few competitive large insurance companies, that would take over the traditional tasks of State.
Nothing indicates that the people wouldn't want to reorganize the land in zonings within those competitive structures either.
It might be interesting to consider specific differences of zoning in such a context however... if there are any.
But it seems it would be definitely too much effort for most individuals to create personalized contracts for each acquisition of property.
Published: June 18, 2009 4:21 AM
Johan
Gil:
Of course nobody own views, but a nice well balanced city is a big part of peoples life quality. Somebody mentioned private contracts to stop the developer to build tall but the price to stop him would be much to high for the households behind. Even if the residents of twenty houses joined they could probably not afford to compensate the developer because he wold maximize income if he built say a 30 floor building with perhaps 60 apartments with a harbour view. There's few people in every country that continuously could compensate for lost rent from 60 apartments.
Another aspect is that as a developer I could live in one country and make business in another and thus all the civil pressure doesn't affect me. If I had the capital i would build tall buildings on all prime locations in world cities.
Finally how do you fix the heritage listing problem? If I buy a old heritage listed building, what would keep me from destroying it if I don't agree with the buildings historic value? Because if against zoning restriction one must be against heritage listing since that's also a violation of the current property owner rights?
So my biggest objection is that without zoning laws cities tends to be unaesthetic which lower life quality and probably is bad for the economy in many ways (tourism, population growth etc).
Ben:
How come your in Canberra and not in Sydney if working at UNSW? Just curious.
Published: June 18, 2009 6:41 AM
RWW
If he then sells the property to someone else, the new owner can't just ignore these previous commitments, as they are effectively part of the property (or so I understand).
That's not quite right. A previous owner's commitment, by itself, can in no way bind the new owner. What must also be contracted by the previous owner is that the property can only be sold under the condition that the new owner agrees to the same commitment, along with the condition. It's self-referential, but it seems valid to me.
However, the idea that commitments made with property automatically transfer with the property is pernicious. For example, the idea is sometimes used to argue that current Americans are bound in some way by the decisions of the signers of the Constitution.
Published: June 18, 2009 7:18 AM
steve
The fact that, in cities such as Houston that lack zoning laws, private developers add restrictive covenants when selling their houses, suggests that such covenants are generally welcomed by house owners. Let us anyway assume that this is the case. Now consider older developments, which were constructed before such covenants were thought of or were constructed piecemeal. It is far more difficult to for current owners to get covenants into place. A hold-out may very well be rationally justified in holding out. The author's solution does not properly address this issue. I agree with him on the problems with zoning or planning restrictions. But, in their favor is the thought that they may allow owners of older properties the ability to achieve what they desire and what would rationally be incorporated within newer developments by the developer.
Published: June 18, 2009 9:05 AM
Mathieu Helie
It's deceptive to describe restrictive covenants as some kind of spontaneous organization. They are more precisely stated a product created by land developers to add value to their development.
In so doing developers are creating two markets, a market for neighborhoods and a market for houses within neighborhoods, a nested market. Because of regulations by public authorities, these markets remain underdeveloped, so we have no idea if the HOAs in their current forms are the optimal form of community ownership.
What holds back cities from achieving the complexity of historic cities is not only zoning, but also scale of development. Grid production by public bodies occurs at an enormous scale, which wasn't the case before the mid-20th century.
Published: June 18, 2009 11:06 AM
gene
Still, no one has committed to who owns a "view"?
If no one owns a "view", then it follows that no one has any right to "take" a view from others without compensation.
If one "owns" a view by their location on the earth that enables them to see the view, then the view is owned by property right. In that case, it would also be necessary to compensate those whose views are blocked by erected structures, since the view is part of the property rights of the land owner.
If those who have the most "capital" at their convenience "own" the view, then the view property owner with the most capital [and the tallest building] owns the view.
The "view" question is also the land, water and air question. Does the possession of "capital" endow one with the right to create artificial scarcity and monopoly of that which is not produced, that which was here before?
Published: June 18, 2009 11:59 AM
Michael A Clem
Sure, we could have gone to court and had it all arbitrated (gotta love the irony, eh?) but wasn't worth it.
I see no irony in expecting courts to enforce contracts--isn't that what they're supposed to do? However, instead of relying on government courts, it might be wise to include an arbitration clause, as many businesses now do, to let some private arbitration and mediation firm handle such problems. Then it might be worth it to pursue. If these contractual positions really aren't worth pursuing, then why put them in there in the first place?
Either way, this supports my point that highly restrictive covenants would be more expensive to enforce, and thus affect the sale value of property under such covenants. There is economic feedback, and thus economic incentives, to come up with workable, valuable, and worthwhile conditions and not petty or pointless conditions to such covenants.
Published: June 18, 2009 12:57 PM
RWW
I agree with him on the problems with zoning or planning restrictions. But, in their favor is the thought that they may allow owners of older properties the ability to achieve what they desire...
You could make the same kind of argument for any law that enforces your personal preferences over the property rights of others.
Published: June 18, 2009 1:23 PM
Francisco Torres
Gene,
[...] [L]and and use planning tr[ie]s to balance development with public services such as police, fire, schools, roads, sewer, water, power.
They may indeed "try" to (the zone planners), but this does not constitute a justification for planning, since it Begs the Question! (What is the reason for government planning? To allocate the services. But who provides the services? Why, the same government that imposes the zoning!) The answer would be to have the government stop with its meddling.
They also try to provide buffers between industrial, commercial, multi-family, single family and agricultural land.
Such buffers only exist in the mind of the zoning tyrants. People that value the scenery will pay for the scenery, and people that don't mind the industry or businesses will save a bundle by ignoring the scenery. That's how things spontaneously arrange themselves, no need for zoning tyrants, thank you very much.
The meddling of the zoning tyrants only makes the poor pay much more, as if they wanted the scenery.
Published: June 18, 2009 3:36 PM
gene
Hi Francisco,
I would answer your comment, but you addressed the wrong guy! Not my quotes!!
Published: June 18, 2009 6:10 PM
Ben O'Neill
Wow, lots more commentary. Thanks again everyone for taking an interest. I will try to respond to some of the points raised (apologies if I missed any good arguments/questions):
gene and scott t: Gene, you ask, “Do we have a basic right to do as we wish with our own property? Or can we be contractually bound to perform certain acts or not, for the indefinite future on property that we hold free title to?” I am not sure if Scott T is implying the same kind of question when he says, “personally i believe property should be under the property owners full control.”
I would say that, a legitimate owner with full title to property (under libertarian property-rights principles using homesteading/free trade) has the right to do as he wishes with his property (subject to the same libertarian property-rights principles). This necessarily includes the capacity to transfer all or part of his property rights to others if he wishes, so that he no longer has full title. He can legitimately lease out his property, sell an easement over his property, sell a restrictive covenant on his property, and so on. If he transfers away part of his title over his property in this way, then he can now only sell what he still owns; namely, the restricted title. A new buyer will buy the property rights the seller has, but not any rights he does not have. If the new buyer desires full title to the property, then he must renegotiate with the other parties (lessees, covenant holders, etc.) to get these rights, until he has full title.
I think the confusion here is between someone having full ownership of a piece of property, and someone who has (voluntarily) transferred away part of their rights, so that they retain some restricted title. It seems to me to be a strange position to contend that people can own private property and can sell their full property rights, but cannot sell only parts of their property rights (as in a restrictive covenant). If I own an apple, and can sell the whole apple, then it seems to me that I should also be able to cut the apple in half and sell only half of it, keeping the rest for myself.
Incidentally, what I have described is exactly what happens when a person sells an investment property that is currently tenanted. In this situation, the tenants have rights under the lease, and these rights attach to the property itself, so that if the property is sold, the new buyer buys it subject to the lease and must respect the tenants’ rights. If the new owner wants to kick out the tenants, then justice demands that he negotiate with them to get out of the lease obligations. If you disagree with this position, then it would seem to me that you would have to accept the right of a property buyer to kick out tenants who had a lease with the previous owner. This would seem to me to be a position which is at odds with most people’s sense of justice (and is certainly at odds with libertarian property-rights principles).
Regarding the alleged analogy between buying a property already subject to government zoning legislation, and buying a property already subject to a restrictive covenant (entered into voluntarily), this was dealt with in footnote 5 of the article. They are not equivalent because the restrictive covenant was a voluntary agreement (and therefore legitimate) whereas the zoning law is coercive (and therefore illegitimate).
Fred Mann: I think you are probably correct that voluntary zoning would be driven in by insurance companies, though I think in the case of the brothel example, the main disincentive would be the fact that potential clientele would be put off by the location.
Mathieu Helie: You say that “It’s deceptive to describe restrictive covenants as some kind of spontaneous organization. They are more precisely stated a product created by land developers to add value to their development.” With respect, I think that is a pretty reckless claim, especially your claim of “deception”.
In fact, restrictive covenants have a long history in English common law and probably also pre-date this by a long way (I suspect you would find them in most ancient legal systems which recognized private property rights). The use of restrictive covenants probably predates modern land developers by at least one thousand years, but I would not be surprised if they are a lot older than that. Restrictive covenants are essentially a kind of contract involving partial transfer of property rights. In a free society they would arise as spontaneously as other contracts.
Far from being more “precise,” I think your statement is demonstrably incorrect, even if one looks solely at the history of English common law. Land developers did not create restrictive covenants.
Johan: You are correct: opposition to coercive zoning legislation implies opposition to heritage laws, which also illegitimately restrict property rights. Regarding your aversion to this, I would suggest that those who desire the preservation of heritage listed buildings should either purchase them, or offer contractual terms with the owner to obtain a restrictive covenant over the property. Either course of action would allow them sufficient direct control over the property to ensure its heritage aspects are preserved (if this is what they want). If heritage supporters are unable or unwilling to offer sufficiently attractive terms to do either of these things, then this simply demonstrates (by the laws of revealed preferences) that they do not value heritage preservation as much as the heritage property owners value their own properties (and the ability to destroy/modify/refurbish their property). Whether cities are unaesthetic or not as a result would then depend on peoples revealed preferences, as shown by their willingness to pay for the aesthetic values they desire.
Regarding your curiosity, UNSW have a small campus at ADFA in Canberra, which is where I work (in the Maths/Statistics Dept).
Cheers,
Ben.
Published: June 18, 2009 8:00 PM
Gil
"Still, no one has committed to who owns a 'view'?"
I did answer your question gene - a person cannot 'own' a view if the 'view' is outside of his private property. Such a view is merely a positive externality. To say somone who enjoys the view or will lose market value if he loses his view has the right to forbid others from disturbing the land beween his land and 'his' view then this violates the 'homesteading' rule because he is barring others from land for no other reason than personal preference and is effectively claiming ownership over large swathes of land by merely declaring it "his".
Published: June 19, 2009 12:53 AM
steve
"You could make the same kind of argument for any law that enforces your personal preferences over the property rights of others."
yes, you could, but that doesn't answer the fact that if the market is satisfying the wishes of persons choosing to purchase covenanted properties, then it seems that it might be failing in the case of older properties.
Published: June 19, 2009 4:41 AM
RWW
Define "failing." The idea of market failure is generally just a euphemism for "I didn't get my way."
Published: June 19, 2009 8:20 AM
RWW
By the way, you could also say that the market is satisfying the wishes of persons choosing to purchase covenanted properties, and also satisfying the wishes of persons who do not wish to be restricted in that way.
After all, those who own "older property" but truly desire covenanted property can always sell what they have and buy elsewhere (covenants never seem to be in short supply). If they do not do so, then they are only demonstrating that their preference for covenants is not that strong.
Published: June 19, 2009 8:27 AM
gene
Hi Gil,
by your analysis then, the landowner who has access to both the view and the most capital owns the view. Ownership is the right to exclusive use, which the land owner creates in regards to the view, with the height of his building, which has a lot to do with capital. So the building "owns" the view as opposed to the property.
The homestead principle, on the other hand, is one of "common" right. Only the collective can deny "common" right through force.
Hi Ben,
what you say about "agreements" makes sense. I was confusing the "title" with outside agreement that concern title. Still, it is a bit odd that they can carry with title, but if that is what people want to do, so be it.
This tho, makes it seem even more like a small version of gov. zoning, to me. both can be forceful or voluntary, depending on whether they are "grandfathered" or forced on existing owners. and both are essentially agreements with choice [relocate, etc.]. I think the gov. version has more leeway to be tyrannical as the market can't punish poor decisions.
A
Published: June 19, 2009 2:37 PM
Gil
No gene, I said no one can own views because views aren't tangible they're "in the eye of the beholder". If you have a good view you don't 'own' it because you have building with a window in that direction but have a personal positive externatility.
An analogy may one when 'in the good old days' a person could go out to sea in a decent-sized boat and land on owned, unoccupied nearby islands and visit the unique widlife there. But suppose, thirty years on, the same person tries to visit the islands and gets turned away because the islands are now private resorts and the person can't do what they used to do. The person might complain but the islands wasn't his to forbid others from homesteading them. Hence if someone blocks your view with a building on their own land then that's your tough luck.
Published: June 21, 2009 1:16 AM
Fred Mann
One more thing...
Insurance companies have a financial interest in maintaining/raising the value of the properties they insure -- the higher the value of the insured property, the higher the premiums.
So, insurance companies would encourage their customers to make improvements that would increase the market value of their property. And since market values are determined in a "democratic" way, improvements would be in line with prevailing sentiments -- i.e. improvements which do not interfere with the "historic charm" of a building -- assuming people *actually* value the "historic charm".
Obviously, this mimics some of the "good" features of current zoning laws -- without force/confiscation.
Published: June 23, 2009 7:47 PM
gene
Hi gil,
If you say "no one" owns a view, then "no one" has the right to exclusive use. erecting a building that "excludes" the view from others, is exclusive use. So, the tallest building "owns" the view.
Same logic, does "no one" own water? or does the property owner with the biggest dam own the water?
Your island example is also good. If we all originally have "common" right to the island and because of that are able to homestead it, what happens to that right when the island becomes scarce? Have we lost our right because of time, as you say, 'that's your tough luck'? The unborn missed the game?
If the island was the last "free" property and five arrived at the same time, how would they resolve it? Would private or collective force rule or could they resolve it peaceably? If they decided the island would go to the highest bidder, who would recieve compensation?
Published: June 26, 2009 2:56 PM
Ben O'Neill
I notice that some people have reservations about restrictive covenants because they are seeing them as an instance of a former owner (or outside party) imposing conditions on a new owner, that seemingly go beyond any contractual agreement with the new owner. I think the key to understanding restrictive covenants is to know a bit about property rights in rem versus contractual rights in personum, which is something that most people without a legal background are probably not familiar with.
The position under English common law is that a contractual agreement cannot apply against someone who is not a party to the contract (with a few exceptions), but the agreement can create an "encumbrance" on the property against the original owner, which essentially means that the former owner has transferred away some of his property rights (possibly only temporarily, as in the case of a registered lease). This means that when he sells his property, he sells only those property rights that he has, and the buyer takes title to the property subject to the encumbrance (*).
On another point, I do not believe that full voluntary zoning would lead to a situation where people are living next to oil refineries. As I mention in the article, there are instances of smoke/noise pollution which are regarded under libertarian property rights theory as violations of property rights. There is also the common law tort of nuisance which protects property owners quiet enjoyment of their property. I think that many people fail to appreciate the degree to which zoning laws actually increase the likelihood that developers can build unreasonable developments in people's neighbourhoods. Zoning laws lead, over time, to regulatory capture, where developers become very "influential" with the zoning bureaucrats and politicians, and they often use these powers to muscle in on territory that they would not have been able to build on if private restrictive covenants were used instead. Some readers may have seen zoning controversies where the government sells land to developers near people's homes and changes the zoning for them so they can build pretty much what they want. I actually think this gives developers far more power than under a fully private system.
* Under common law, if the buyer is a "bona fide" purchaser without notice of the encumbrance, then he actually takes full title to the property, and the encumbrance is lost. Registration of encumbrances on the property title ensures that potential purchasers are put on notice of any encumbrances.
Published: June 27, 2009 9:08 PM
Luis
Two things I wanted to note:
1) In private homeowner associations, majority rules just as much as it does in any other democracy. You still loose a portion of your freedoms to decide what you want to do with your property. Sure, you can always move out, but the same can go for your residency in a jurisdiction that falls under a public planning ordinance.
2) What's your take on Historic Preservation zoning?
Published: July 9, 2009 12:44 PM
Ben O'Neill
Hi Luis. I think these issues were both addressed above (the former in my reply to Greg and the latter in my reply to Johan). Thanks for the questions though.
Published: October 14, 2009 9:31 PM