Zoning and Suburban Housing Costs: The Effects of Legal Rights and Government Structure

摘要

This report examines the causes and consequences of 'excessive' land use controls, particularly with respect to suburban housing. To demonstrate that local land use controls, especially in the suburbs, are too restrictive, three new approaches to the land use problem are used. First, a simple theoretical property rights model of zoning issues is outlined, which enables the examination of possible causes of excessive zoning restrictions. The model reveals that monopoly is but one of four possible reasons for the phenomenon of high housing prices coupled with low production. The second approach to the issue is made from an institutional point of view. By examining the operation of zoning and its legal limitations, the attempt is made to show in what direction and to what extent zoning restrictions may be excessive. The evidence thus gained indicates that the institutional structure of zoning has made it at least plausible that the nonmonopoly theories of zoning do have an effect. The strongest indicator of this conclusion is the inability of communities to exchange zoning controls for other types of benefits. The third approach investigates the monopoly motive empirically. The monopoly hypothesis requires a chain of causation with a concentrated structure enabling those who stand to gain from higher prices to alter their conduct so that the performance of the industry is different from the competitive ideal. This hypothesis is challenged at each link in this structure - conduct - performance chain by the institutional analysis. It is argued that relatively few metropolitan areas in the U.S. have a structure of local government which would permit monopoly gains. Nor do the political and institutional constraints on the behavior of local governments allow for monopoly conduct. Finally, the performance of two metropolitan areas with suburban monopoly structures is compared to that of several areas with highly competitive structures, revealing no obvious differences in housing prices according to government structure. Because evidence does not show that monopoly structure leads to excessive land use controls, it is deemed inadvisable to adopt municipal antitrust policies. Instead, a policy is recommended based on 'reasonable' federally established zoning standards to be met by local communities as a condition for receiving Federal funds. Tabular and graphic data are supplied; a bibliography of about 50 entries is provided.