Urban Land‐Use Regulation: Are Homevoters Overtaking the Growth Machine?

• Author: Vicki Been,Simon McDonnell,Josiah Madar
• Published date: 01 June 2014
• Date: 01 June 2014
• DOI: http://doi.org/10.1111/jels.12040

Urban Land-Use Regulation:

Are Homevoters Overtaking

the Growth Machine?

Vicki Been, Josiah Madar, and Simon McDonnell*

The leading theory about urban land-use regulation argues that city zoning officials are full

partners in the business and real estate elite’s “growth machine.” Suburban land-use officials,

in contrast, are thought to cater to the interests of the majority of their electorate—

“homevoters.” A unique database regarding over 200,000 lots that the New York City Plan-

ning Commission considered for rezoning between 2002 and 2009 allows us to test various

hypotheses suggested by these competing theories of land-use regulation. Our analysis

reveals that homevoters are more powerful in urban politics than scholars, policymakers,

and judges have assumed.

I. Introduction

“No one is enthusiastic about zoning except the people,” quipped Richard Babcock almost

50 years ago.1Despite its apparent popularity among citizens and local practitioners, many

*Address correspondence to Vicki Been, New York University School of Law, 139 MacDougal St., Rm. 213, New York,

NY 10012; email: vicki.been@nyu.edu. Been was the Boxer Family Professor of Law at New York University School of

Law, and Director of the Furman Center for Real Estate and Urban Policy when this article was written. After the

article was completed, she took a leave of absence from NYU and currently is serving as Commissioner of the New York

City Department of Housing Preservation and Development; Madar is Research Fellow at the Furman Center for Real

Estate and Urban Policy; McDonnell is Senior Policy Analyst in the Office of Policy Research of the City University of

New York.

The authors thank participants in the Wolf Family Lecture Series at the University of Florida Levin College of Law,

the Norman Williams Distinguished Lecture in Land Use Planning and the Law at the Vermont Law School, the

Boxer Family Chair Lecture at New York University School of Law, the 2011 Association for Public Policy Analysis and

Management Conference, the 2012 Property Works in Progress Conference, the 2010 American Law and Economics

Conference, the New York University School of Law Colloquium on the Law, Economics and Politics of Urban Affairs,

and the Furman Center Brown Bag Lunch Series. We also are grateful for comments from Ted Eisenberg, William

Fischel, Richard Revesz, and two anonymous referees. We are indebted to an incredible group of current and former

research assistants: Sean Capperis, Brice Chaney, Adam Eckstein, Tyler Jaeckel, Ira Klein, Jeff Leyco, Aaron Love,

Marshall Morales, Gabriel Panek, Jennifer Perrone, Clint Wallace, Ben Winter, and Courtney Wolf. We benefitted

enormously from the expertise and wisdom of our Advisory Group: Lenny Boxer, Donald Elliott, Michael Kwartler,

Jay Furman, Alex Garvin, Mark Ginsberg, Marvin Meltzer, Ross Moskowitz, James Power, Carol Rosenthal, and others

who prefer to remain anonymous. Professor Been is grateful for the support provided by the Filomen D’Agostino and

Max E. Greenberg Research Account. Although this research was conducted by faculty and staff of the Furman

Center, which is affiliated with NYU’s School of Law and Wagner Graduate School of Public Service, it does not

purport to present the institutional views (if any) of NYU or any of its schools.

1Richard F. Babcock, The Zoning Game: Municipal Practices and Policies 17 (1966).

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Journal of Empirical Legal Studies

Volume 11, Issue 2, 227–265, June 2014

227

critics have charged, over several decades, that zoning and other land-use regulations

unconstitutionally interfere with private property, meddle inefficiently in the real estate

market, serve as a tool for exclusion, and drive up housing costs.2Even if zoning might be

defensible in the abstract, others argue, public officials are too often “sloppy” and “self-

serving” in its application.3More recently, zoning has been charged with stifling economic

growth and promoting economic inequality by shutting workers out of our most productive

big cities, helping to inflate the housing bubble, and even adding to American waistlines.4

Many commentators accordingly have called on federal, state, and local governments,

courts, and voters themselves to reform the processes by which land use is regulated. But the

appropriateness or viability of the proposed reforms depends in part on the political

economy of the targeted land-use restrictions. Efforts to guard against inefficient land-use

regulation by imposing heightened judicial scrutiny of rezonings, for example, likely will not

improve zoning decisions if scrutiny focuses on evidence of developer influence when it

should be looking instead for signs of excessive risk aversion by neighbors.

Public choice theorists have generally fallen into two camps about the politics behind

land-use decisions. The “growth machine” theory views land-use officials as part of an elite

coalition concerned primarily with economic growth.5Adherents of the growth machine

theory, led by John Logan and Harvey Molotch, see zoning and other land-use regulations

as the “mild sticks” that government uses to distribute development in ways that benefit

elites in the coalition.6Other local government theorists, led by William Fischel, focus

instead on the political power of homeowners and their “mercenary concern with property

values.”7In this view, policymakers cater to homeowners’ demands for low property taxes

(for homeowners, anyway), high levels of public services, uncongested public amenities,

and protection from competition in the housing market when it comes time to sell. The

2See, e.g., Andres Duany, Elizabeth Plater-Zyberk & Jeff Speck, Suburban Nation: The Rise of the Sprawl and the

Decline of the American Dream (2001) (highlighting Euclidean zoning’s typical ban on mixed-use development and

promotion of low-density housing); Edward L. Glaeser & Joseph Gyourko, Zoning’s Steep Price, 25 Regulation 24

(2002) (finding evidence suggesting that land-use restrictions are responsible for high housing costs in New York City

and California); Rolf Pendall, Local Land Use Regulation and the Chain of Exclusion, 66 J. Am. Plan. Ass’n 2 (2000)

(arguing that low-density zoning tends to exclude the poor and racial minorities from many suburban jurisdictions).

3Daniel R. Mandelker & A. Dan Tarlock, Shifting the Presumption of Constitutionality in Land-Use Law, 24 Urb. Law.

1, 2 (1992).

4Peter Ganong & Daniel Shoag, Why Has Regional Income Convergence in the U.S. Declined? (Harv. Kennedy

School, Working Paper No. RWP12-028, 2013), available at <http://papers.ssrn.com/sol3/papers.cfm?abstract_id

=2081216##>; Paul Krugman, Op-Ed, That Hissing Sound, N.Y. Times, Aug. 8, 2005, <http://www.nytimes.com/

2005/08/08/opinion/08krugman.html>; Joseph Schilling & Leslie S. Linton, The Public Health Roots of Zoning: In

Search of Active Living’s Legal Genealogy, 28 Am. J. Preventive Med. 2, 96–104 (2005). See also Ryan Avent, The

Gated City (Kindle Single, 2011).

5E.g., John R. Logan & Harvey L. Molotch, Urban Fortunes: The Political Economy of Place (1987).

6Id. at 155.

7William A. Fischel, The Homevoter Hypothesis: How Home Values Influence Local Government, Taxation, School

Finance and Land-Use Politics 18 (2001).

228 Been et al.

growth machine is typically thought to describe urban land-use politics, while the

homevoter theory explains suburban land use.

Recently, however, cities have begun to engage in land-use practices long associated

with suburbs—downzoning land to more restrictive regulations, imposing substantial fees

for development approval, and taking significant quantities of land off the market through

programs to preserve historic landmarks and open space. That shift should lead to a

reexamination of received wisdom about urban land-use politics. Empirical testing of the

leading theories about what influences local governments’ land-use decisions, however, has

proved challenging. Using changes within a jurisdiction to understand the political

economy of zoning is difficult because local governments seldom adopt new comprehensive

zoning codes, and existing codes are often riddled with hard-to-assess flexibility devices or,

in practice, are merely the starting place for negotiations between the local government

and the developer.8Comparisons among different jurisdictions or metropolitan areas

risk glossing over idiosyncratic regulatory histories and subsequent path dependence, and

raise practical challenges of data compatibility and of modeling multiple, complex zoning

codes.

In this article we take advantage of a period of unusually high rezoning activity

in New York City to investigate empirically the politics underlying zoning. Since 2002, the

city’s Department of City Planning (DCP) has successfully initiated more than 120

neighborhood-sized rezoning “projects” throughout the city’s five boroughs, each of which

rezoned multiple lots, often in multiple ways. Using several data sources, we develop a

lot-level data set of more than 230,000 lots that were considered for rezoning as part of

these projects. We then categorize the lots according to how they were rezoned, and use

associations between the characteristics of the lots and the neighborhoods in which they are

located, on the one hand, and the zoning changes the city imposed, on the other, to test the

primary theories about how local governments determine the restrictiveness of zoning.

We find a surprising level of empirical support for the homevoter-based theory, even

though New York City is probably the last place in the United States that one would expect

to see zoning policy catering to the interests of homeowners, rather than the growth

machine. New York City has the lowest homeownership rate of any major city in the nation,9

for example, and its land-use policies have long been associated with the interests of the real

estate industry.10 Nevertheless, our results show considerable evidence that homeowners

have much more influence on land-use policy than the received wisdom about urban

land-use politics would predict. The finding that cities may cater to homeowners, even when

they are a minority of eligible voters, and even when their interests run counter to those of

8See, e.g., Babcock, supra note 1, at 6–11.

9Christopher Mazur & Ellen Wilson, Housing Characteristics: 2010, in 2010 Census Briefs (U.S. Census Bureau No.

C2010BR-07), available at <http://www.census.gov/prod/cen2010/briefs/c2010br-07.pdf>.

10See, e.g., Tom Angotti, New York for Sale: Community Planning Confronts Global Real Estate (2008); Roger Sanjek,

The Future of Us All: Race and Neighborhood Politics in New York City 98 (1998); Marc A. Weiss, Density and

Intervention: New York’s Planning Traditions, in The Landscape of Modernity: New York City, 1900–1940 46 (David

Ward & Oliver Zunz eds., 1997).

Urban Land-Use Regulation 229