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Liberalizing cities | From the bottom up

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Ranking State Land Use Regulations

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Yesterday, the Mercatus Center released the third edition of Freedom in the 50 States by Will Ruger and Jason Sorens. The authors break down state freedom among regulatory, fiscal, and personal categories. At the study’s website, readers can re-rank the states based on the aspects of freedom that they think are most important, including some variables related to land use and housing. The available variables include local rent control, regulatory takings restrictions, the Wharton Residential Land Use Regulatory Index, and an eminent domain index.

Using only these “Property Rights Protection” variables, Kansas ranks as the freest state, followed by Louisiana, Indiana, Missouri, and South Dakota. Texas, sometimes cited as the state without zoning, comes in at 18th. The least free state is New Jersey, with Maryland at 49th, followed by California, New York, and Hawaii. This result — states with some of the most expensive cities being the most regulated — is unsurprising.

In the places with the freest land use regulations, where a developer would be able to build walkable, mixed-use neighborhoods without going through a burdensome entitlement process, there isn’t demand for dense development. This may be one reason why the Piscataquis Village project, an effort to build a traditional city, is happening in a sparsely populated Maine county because new development of this sort is simply not permitted near any population centers.

As Stephen recently pointed out, public opinion in New York tends to see city policies as wildly pro-development:

In spite of the popular impression of New York as a builder-friendly city that’s constantly exceeding the bounds of rational development, the city’s growth over the past half-century has been anemic, and has not kept pace with the natural growth in population.

This ranking of New York near the bottom of the index demonstrates what urban economists already know — new development is not permitted to be built where rents are highest and it’s most needed in spite of perception of pro-development policies. Does anyone have development experience in some of the freest states? Does this ranking match your perception?

Update: For full disclosure I was a project manager on Freedom in the 50 States.

  • Is there any possibility that the “freest” places simply haven’t codified laws because, in part, they don’t need to? Here in Austin, TX, the state legislature is starting to take an interest in restricting development in Austin (see, e.g. http://www.austincontrarian.com/austincontrarian/2013/03/the-congress-avenue-overlay.html) on the heels of many proposals for large buildings along the main commercial strip. If nobody had ever proposed building large buildings, there’d be no reason to pass a law prohibiting them.

  • Emily Washington

    Yes, I think in large part land use reg is driven by local policymakers’ NIMBY bases who haven’t influenced policy as much in less developed states. I’d be interested in learning more about Louisiana historical land use policy though, as a state with some of the country’s oldest cities. Maybe it has remained a low-regulation state because its cities’ growth rates slowed before zoning became common?

  • northendmatt

    I want to preface this by saying I’m extremely skeptical of Mercatus’ work. For example, is “freedom from tort abuse” 6x as important to an average person as “Occupational and Licensing Freedom”? Or is it 6x as important to a person who wants to make states with strong tort liability look bad? I can’t help but think that the weights assigned to different variables are rigged to generate a predetermined outcome. When it comes to land use, “mandated free speech on private property” is basically irrelevant to what we are talking about here, and regulatory taking index and eminent domain are not as important as rent control and residential land use restrictions.

    When I look at the map, I go a little xkcd on it. Basically they are telling me that it’s hard to build stuff where there’s already a lot of stuff built. Duh.

    The issue with land use in America is pretty fundamental and universal: we only have one mode of development, sprawl, that is able to proceed at a pace fast enough to accommodate growth. And in places like California, sprawl mode is running into geographical limits like 10,000 foot mountains, as well as practical limits of tolerable commute distance. The fast-growing sprawl areas in LA now – the AV, Adelanto, Murrietta, Perris, etc. – are a good 60-80 miles from downtown, so transportation time and cost often negates the cheaper housing. Compare that to DFW, Austin/San Antonio, or Houston – you can go 20 miles from downtown and be at the edge. So sprawl is happening more quickly in Texas because it fundamentally makes more sense. The relevant question is: when Houston reaches the geographic extents of Los Angeles, is it going to be easier to densify Houston than it is to densify LA? My suspicion is no: people in SFRs in Cinco Ranch will prove to be no different than people in SFRs in Orange County.

    I will say that it seems to me that MA/NY/CT are on another level when it comes to land use restrictions and NIMBYism. Your generic sprawl being built in Los Angeles is actually pretty dense – on the order of 4-6 DU/acre. Contrast that with the two-acre zoning of many MA, CT, and NY towns. Somewhat humorously, Deval Patrick gets accolades from some progressives for promoting a plan that would encourage developments of 4 DU/acre near transit stops.

    (Note: the regulatory environment for sprawl in CA may not be great, but it’s still probably easier than infill and densification. Despite what the CA doomers and TX boosters would have you believe, CA is growing; in fact, the combined LA/IE added more people than any other US metro last year. And though prices in CA are higher in general, I can easily find you a new suburban tract house for not much more than in TX. Difference is it will be 75 miles out, not 20.)

  • .

    I think we’re getting to very weird territory on this. People sometimes forget that inland California is more like Texas than it is like Los Angeles. People near the coast call Fontana “Fontucky” for a reason.

    If we’re going to point out that the less-free places are where “people want to live” we should point out that enormous parts of the desirable coastal states are every bit as much flyover country as South Dakota.

  • The best example of how freedom ultimately effects the economy is the differences between Virginia and Maryland. Both are geographically and demographically similar, and both border the cash cow of Washington DC. So why is the economy of one rapidly expanding, while the other has one of the nation’s worst job-creation records? Just look at their differing business climates and attitudes about freedom, as noted by this study…

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