Planning an Affordable City

Author:Roderick M. Hills & David Schleicher
Position:William T. Comfort, III, Professor of Law, New York University Law School/Associate Professor, Yale Law School
Pages:91-136
SUMMARY

In many of the biggest and richest cities in America, there is a housing affordability crisis. Housing prices in these cities have appreciated well beyond the cost of construction and even faster than rising incomes. These price increases are a direct result of zoning rules that limit the ability of new supply to meet rising demand. The high cost of housing imposes a heavy burden on poorer and younger residents and, by forcing residents away from these human capital rich areas, has even reduced regional... (see full summary)

 
FREE EXCERPT
91
Planning an Affordable City
Roderick M. Hills, Jr. & David Schleicher
ABSTRACT: In many of the biggest and richest cities in America, there is a
housing affordability crisis. Housing prices in these cities have appreciated
well beyond the cost of construction and even faster than rising incomes. These
price increases are a direct result of zoning rules that limit the ability of new
supply to meet rising demand. The high cost of housing imposes a heavy
burden on poorer and younger residents and, by forcing residents away from
these human capital rich areas, has even reduced regional and national
economic growth. While scholars have done a great deal to identify the
problem, solutions are hard to come by, particularly given the strong influence
of neighborhood “NIMBY” groups in the land-use process that resist any
relaxation of zoning limits on housing supply.
In this Article, we argue that binding and comprehensive urban planning,
one of the most criticized ideas in land-use law, could be part of an antidote
for regulatory barriers strangling our housing supply. In the middle of the last
century, several prominent scholars argued that courts should find zoning
amendments that were contrary to city plans u ltra vires. This idea was,
however, largely rejected by courts and scholars alike, with leading academic
figures arguing that parcel-specific zoning amendments, or “deals,” provide
space for the give-and-take of democracy and lead to an efficient amount of
development by encouraging negotiations between developers and residents
regarding externalities from new building projects.
We argue, by contrast, that the dismissal of plans contributed to the excessive
strictness of zoning in our richest and most productive cities and regions. In
contrast with both planning’s critics and supporters, we argue that plans and
comprehensive remappings are best understood as citywide deals that promote
housing. Plans and remappings facilitate trades between city councilmembers
who understand the need for new development but refuse to have their
William T. Comfort, III, Professor of Law, New York University Law School.
 Associate Professor, Yale Law School.
Many thanks are due to Vicki Been, Annie Decker, Bob Ellickson, Chris Elmendorf, David
Fontana, Heather Gerken, John Mangin, Carol Rose, Kenneth Stahl, John Witt, Thomas Witt,
Katrina Wyman, and participants at workshops at Yale Law School and the Furman Center for
Real Estate and Urban Policy for their comments. Also to Jeremy Greenberg, Daniel Rauch, and
Bryn Williams for their terrific research assistance.
92 IOWA LAW REVIEW [Vol. 101:91
neighborhoods be dumping grounds for all new construction. Further, by
setting forth what can be constructed as of right, plans reduce the information
costs borne by purchasers of land and developers, broadening the market for
new construction. We argue that land-use law should embrace binding plans
that package together policies and sets of zoning changes in a number of
neighborhoods simultaneously, making such packages difficult to unwind.
The ironic result of such greater centralization of land-use procedure will be
more liberal land-use law and lower housing prices.
I. INTRODUCTION ............................................................................... 93
II. THE DEBATE OVER PLANS AS IMPERMANENT CONSTITUTIONS ....... 96
A. CHARLES HAARS CASE FOR THE “IMPERMANENT CONSTITUTIONS
OF PLANNING ............................................................................ 97
B. THE LAWS EQUIVOCAL ADOPTION OF THE PLAN AS IMPERMANENT
CONSTITUTION........................................................................ 100
C. THE CASE AGAINST PLANS AS “IMPERMANENT
CONSTITUTIONS .................................................................... 104
1. Carol Rose and the Case Against the Politics of
Planning ......................................................................... 104
2. Fischel, Nelson, and the Economic Case Against
Planning ......................................................................... 106
III. A REVISED CASE FOR PLANS: PLANS AS CITYWIDE BARGAINS TO
INCREASE THE MARKETABILITY OF URBAN PROPERTY ................... 108
A. PLANS AS A MECHANISM FOR ENFORCING CITYWIDE DEALS ....... 111
1. Distributive Politics in Land Use .................................. 111
2. Plans as a Solution to the “Ironclad Rule of Aldermanic
Privilege” ........................................................................ 112
3. Why Sorting Doesn’t Solve the Problems of Excessive
Land-Use Restriction ..................................................... 115
B. PLANS AS A MEANS TO INCREASE THE MARKET FOR PROPERTY: THE
ROLE OF PLANS IN REDUCING INFORMATION COSTS FOR
BUYERS ................................................................................... 116
1. Property Law and Information Costs: From Bundles of
Sticks to the Greatest Grid ............................................ 117
2. The Case for Plans as a Method of Reducing
Information Costs and Increasing the Marketability of
Land ............................................................................... 120
2015] PLANNING AN AFFORDABLE CITY 93
IV. MECHANISMS FOR CITYWIDE DEALS AND GREATER CERTAINTY IN
LAND USE ...................................................................................... 123
A. THE PLAN AS A CITYWIDE DEAL: BUDGETING PRINCIPLES FOR
PLANNERS ............................................................................... 124
B. STANDARD “PRICE SHEET FOR DENSITY INCREASES .................. 129
V. CONCLUSION: WHAT HAPPENED TO REAL PROPERTY IN MODERN
PROPERTY LAW THEORY? .............................................................. 134
“Plans are worthless, but planning is everything.”—Dwight D. Eisenhower1
I. INTRODUCTION
America faces a housing affordability crisis in its most economically
dynamic cities, including metropolises like New York City, San Francisco, Los
Angeles, and Boston where prices are rising faster than construction costs.2
Over the past three decades, the price of housing and office space in many of
the biggest and richest cities in America has increased wildly, a result of both
increasing demand and substantial zoning and other restrictions on new
construction.3 Such cities increasingly look like collections of exclusive
suburbs, with neighborhoods filled with homeowners stopping the
construction of needed commercial and residential development.4 The result
is that working- and middle-class citizens cannot afford to live where their
labor would be most productive, instead settling for cities where housing is
cheaper but human capital spillovers are lower and jobs are less plentiful and
less remunerative.5 Moreover, accumulating evidence demonstrates that these
1. Pres ident Dwight Eisenhower, Speech to the National Def ense Executive Reserve
Conference in Washington, D.C. (Nov. 14, 1957), in NATL ARCHIVES & RECORDS SERV., PUBLIC
PAPERS OF THE PRESIDENTS OF THE UNITED STATES: DWIGHT D. EISENHOWER 818 (1957).
2. See EDWARD GLAESER, TRIUMPH OF THE CITY: HOW OUR GREATEST INVENTION MAKES US
RICHER, SMARTER, GREENER, HEALTHIER, AND HAPPIER 184–93, 240–42 (2011); Edward L. Glaeser
et al., Why Is Manhattan So Expensive? Regulation and the Rise in Housing Prices, 48 J.L. & ECON. 331,
331–33 (2005); David Schleicher, City Unplanning, 122 YALE L.J. 1670, 1692–98 (201 3).
3. See RYAN AVENT, THE GATED CITY loc. 860–81 (2011) (ebook); Roderick M. Hills, Jr. &
David N. Schleicher, Balancing the “Zoning Budget, 62 CASE W. RES. L. REV. 81, 85 (2011);
Schleicher, supra note 2, at 1692–98.
4. This is stark contrast with the long-dominant belief that big cities are dominated by
“growth machine” coalitions of developers and allies in labor and elsewhere, as famously argued
by Harvey Molotch. See Harvey Molotch, The City as a Growth Machine: Toward a Political Economy of
Place, 82 AM. J. SOC. 309, 309–10 (1976). Molotch’s view was pretty universally held until a few
years ago. See Schleicher, supra note 2, at 1672–73. For empirical evidence that many big cities
do not look like growth machines, see generally Vicki Been et al., Urban Land-Use Regulation: Are
Homevoters Overtaking the Growth Machine?, 11 J. EMPIRICAL LEGAL STUD. 227 (2014).
5. See AVENT, supra note 3, at loc. 883–98; Schleicher, supra note 2, at 1692–98; Peter
Ganong & Daniel Shoag, Why Has Regional Income Convergence in the U.S. Declined? 1 (Harvard

To continue reading

FREE SIGN UP