A Stitch in Haste

Tyler Cowen asks a simple question:

How good would the abolition of zoning in New York City be?

Of course, that question completely drops the context within which "good" is embedded. Stated differently: "Good" -- by what metric? Real estate values? Total available housing stock? Aesthetics? Whose aesthetics?

Suddenly it's not so simple a question after all.

How about defining "good" as "respecting property rights and constitutional principles"? As I commented at Cowen's blog:

Sorry for the Clintonism, but it depends (as you note) on what your definition of "zoning" is.

First-order zoning -- an area is simply designated "residential," "commercial" or "industrial" -- is not an excruciating abomination to libertarians and can be defended, at least in the abstract, as externality-correcting.

Second-order zoning -- height restrictions are the best example -- are less defensible and should be presumed illegitimate (i.e., restrictions should be subject to heightened scrutiny). This is the kind of "zoning" imposed on most of Manhattan.

Third-order zoning -- where any and every alteration, expansion or demolition must be submitted to an unelected board with near-plenary authority to approve or reject the project -- for any reason up to and including the whim and caprice of the board members -- is per se illegitimate, and under any sane jurisprudence such an infringement of fundamental property rights would be an irrebuttable due process violation. (So-called "historic districts" -- of which there are many in New York City -- are the most egregious example.)

Yes, the "first-second-third" nomenclature is my own concoction, inspired by similar terminology in the context of price discrimination.

More thoughts from Perfect Substitute