Wednesday, May 28, 2008

Houston’s Housing Market

While many areas of the country are struggling through plummeting real estate values and the collapse of their building industry, Houston has escaped these travails. A large contributing factor is the city’s lack of zoning, which allows developers and property owners to react to market conditions without securing government permission.

Houston Chronicle columnist Loren Steffy recently wrote about this. A report issued by the Federal Reserve Bank of Dallas found “that a key reason Houston has avoided much of the housing crisis is because zoning keeps home prices higher”. You can read the entire article by clicking here. A longer article appeared in the May 28, 2008 Houston Chronicle.

Economic arguments against zoning are important. The economic consequences of zoning and other land use restrictions are one of the practical consequences of such laws. But the primary objection to zoning is moral in nature.

Zoning represents an initiation of force against the citizens of a community. Zoning imposes the values of some upon the entire community, and it is backed by government coercion. Zoning is a violation of individual rights, i.e., the right of each individual to pursue his values without intervention from others, including the government.

Houston’s housing market has remained affordable and vibrant because individuals have enjoyed relative freedom in land use. Developers and property owners have the freedom to make choices in land use, and consumers have the freedom to embrace or reject those uses. Unlike government bureaucrats, individuals react quickly and rationally to their personal values.

Houston has stood as a shining example of freedom throughout its history. Our current housing market is just one more consequence of that freedom.

© J. Brian Phillips 2008

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