Monday, July 28, 2008

How Zoning Works

When I was in Hobbs, NM in 2007 someone pointed out that there is plenty of land available in Hobbs. If zoning prevented a particular use in one area, there are many other areas that would be available for the same use. This may or may not be true, but it is really irrelevant.

Imagine you went to a luncheon. The room holds 100 people. By fiat someone declares that only realtors can sit at one table, only teachers at another, accountants at another, etc. In other words, each table is zoned for a particular use. The organizers don’t want “incompatible” professions sitting together at lunch, even if the individuals want to.

Let’s also imagine that each table holds 8 people. But 12 realtors are present. And only 4 teachers are present. There is plenty of space for the teachers, but not enough for the realtors. The space for a particular use has been arbitrarily limited.

The organizers put a table in the lobby for the extra realtors. There are now plenty of seats for the realtors. However, some of those seats are not in a location that provides the same value to the realtors. They may be able to hear the speaker, but not with the same clarity. They will not be able to see any visuals he uses.

While there are adequate seats for the realtors, the value of each seat is not the same. The seats in the lobby are of less utility—they are not in the desired location.

This is what zoning does. Zoning restricts the use of each parcel of land. While there many be adequate land within the city for any particular use, it will not necessarily be in the location that provides the greatest value.

If a property owner desires a use that differs from the zoning plan, he can apply for a variance. This entails hiring a lawyer, preparing documents, attending hearings, etc. The cost of obtaining a variance will ultimately be passed on to the consumer, in higher housing costs, in higher rents, etc. The owner of the property will recover his costs, and the end user will be the one footing the bill.

When we add in the time involved in delayed projects and the costs associated with those delays, the costs increase further. Again, these costs are ultimately borne by the end user. At some point, the project may be abandoned because it has become economically unfeasible, even if the proper permissions can be obtained.

To return to our original story, let us imagine that the 4 realtors decide to seek a variance so that they can sit at the teacher’s table. They can lobby the appropriate authorities, fill out the required forms, and submit the required fees. How long do you think that they will do this? How long do you think that they will play this silly game just to sit in seats that are clearly vacant?

At some point they will decide that it simply isn’t worth the effort. All they want to do is have lunch and listen to a speaker, and instead they must jump through arbitrary hoops. They will decide to spend their time, effort, and money on activities that are more worthwhile.

This is the ultimate consequence of zoning.

While the economic consequences of zoning are very real, the primary objection to zoning is moral. Zoning prohibits property owners from using their land as they choose, and in doing so allows some citizens to impose their values upon others. There never has been, nor will there ever be, a moral justification for such actions.

Forcing realtors to sit in the lobby, when sitting elsewhere will violate nobody’s rights, is unjust and a violation of their rights. Forcing property owners to use their land in a particular manner is essentially the same thing.

The nature of an action does not change simply because it is undertaken by government and/ or has the support of the majority of the citizenry.

© J. Brian Phillips

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