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Sunday, July 1, 2001

Adventures in Zoning

Governments Don't Write Rules to Protect Private Interests

I live on a quiet dead-end street in a small suburb of Cleveland. A local developer’s plans for a little vacant lot across the street from my house recently led me into the arcane world of municipal land-use planning. The story of this lot illustrates several important lessons about how governments actually function.

The lot in question once held a house (the ruined foundation still stands) that was destroyed years ago. According to a neighbor, it was the home of two stereotypical elderly, somewhat batty old ladies and many, many cats. In addition to the cats, one sign of their battiness was the old ladies’ insistence on holding large amounts of cash on the property. When a supposedly well-meaning relative had the house condemned and the residents moved into an old folks’ home, members of the public were allowed to tear down the house brick by brick in search of the cash.

The lot then sat there quietly until a developer bought it and decided to build five duplexes—a number that my neighbors and I thought excessive for the lot size and our small street. So we trooped down to a planning board meeting to learn what our options were.* People yelled, gavels were banged, and we learned that . . . our options were not especially satisfactory. It turned out that the zoning ordinances permitted five duplexes on the lot in question and, the town officials informed us, there was nothing they could do about it. The meeting was not a total waste of time—we discovered that the town “master plan” did not include our street at all!

The public meeting produced pressure on the developer to meet informally with the neighbors to discuss our concerns. Why? Because our neighborhood’s city councilman was angry that the developer had not called him before announcing his plan to the neighbors. The councilman got a series of calls from constituents about an issue he knew nothing about—an embarrassing event for a councilman.

As often happens, one good meeting leads to another, and soon we were sitting down informally with the developer and a town planner. At this meeting we heard a strange address from the bureaucrat, who got all dreamy eyed at the duplex plans. Our town “needed” the duplexes, he told us, since they would have first-floor master bedrooms and the lack of “enough” such housing was hurting the town. How? Older residents were moving to neighboring towns to find homes that didn’t have stairs.

Keep in mind that I live in a continuous string of suburbs—the only noticeable differences between towns are the tax rates and the little signs at borders signed by each mayor welcoming visitors to his fiefdom. These elderly folks weren’t moving to Arizona in search of that elusive first-floor master bedroom or even very far within Ohio. They were just moving down the street. Was it the emotional burden of the loss of these older folks’ sentimental attachment to the town that bothered our friendly local planner? Was it a craving for just the “right” mixture of old and young residents, to satisfy some urge to create a utopian community?

No—it was that these old folks would then die as residents of another town. Ohio law, it turns out, awards a share of the state’s estate tax to the town where the deceased resided. As our town’s population aged, people moved out and other towns got “our” share of these estate-tax revenues. (Since we just voted down a local income-tax hike, the city fathers are especially sensitive on this point.)

The Master Plan

And what about that “master plan” that suggested we didn’t even exist? We needn’t worry, our new friend assured us, that the town had any evil designs on our street just because it doesn’t exist on the master plan. That was just the town’s way of telling developers that if they could buy up the properties on the street, the town would be happy to change the zoning from residential to something more suitable to accommodate other forms of land use (perhaps a facility for wealthy and suitably frail elderly people?). The town wouldn’t force us to sell out; it just wanted to encourage interest in our street.

The “master plan” was thus just a signal that the price for rezoning our neighborhood was especially low. Of course, that master plan also has an impact on the price of our houses now—why invest in a home on a street that is being advertised as the equivalent of a Kmart bluelight special? And given the sad history of municipalities forcing people out of neighborhoods, like Poletown in Detroit, we didn’t find his reassurances too convincing.

Although when I first wrote this article it looked as though the development was a fait accompli, the town has since rejected the developer’s subdivision plan (for now). It turned out that the developer failed to cross his t’s and dot his i’s properly. His application was riddled with minor errors that surfaced when the planning commission took a harder look at it. Given the political heat generated by the constant appearance of my neighbors at council meetings, those errors led the town to reject the application.

The history of the little vacant lot across the street teaches four important lessons about the fallacy of relying on governments to “plan” and “control” land use (or anything else):

Power is used against the weak and helpless, not to protect them. The ladies with their cats got moved out of their home and had it destroyed by a mob hoping to steal their property—all with the sanction of the government. Why? They were weak (old, odd, had lots of cats) and the interfering busybodies were strong and well-intentioned (finding some cash would surely have been just a bonus!).

Governments don’t write rules to protect private interests. The town wasn’t interested in preserving the character of my neighborhood. It was interested in getting some housing suitable for people who might die there with an estate the town could tax. As a result, the “protections” of zoning laws turned out to be nonexistent. We could have done better by banding together with the prior owner of the lot to write mutually restrictive covenants into our deeds (as was routinely done before zoning). But no one bothered because we thought we were “protected” by zoning laws.

Bureaucrats strive to maximize tax revenue, not social welfare. Libertarians often worry about planners’ attempts to force us to live according to some utopian blueprint. It is often much simpler—the planners just want our money. Getting people with assets to die as residents of our town was the point, not some social-engineering attempt to mingle the elderly and the young.

You’ve got to kiss the right rings to get ahead. The developer made one mistake: he forgot to kowtow to the city councilman before handing his plans to the city officials. That omission made our councilman lose face before his constituents, a dangerous situation for the developer that cost him time and money. Then the developer made some typographical errors on his application—and it was all over. He didn’t lose out because his development failed to meet substantive criteria—he lost out because the political calculus turned against him and he had not spent enough time proofreading his filings!

So next time someone touts the virtues of planning, point him in the direction of a planning-board meeting. Have him speak to the planners about why the plans are the way they are. At the very least it will make the planners nervous and—contrary to the old saying about not watching while laws or sausages are made—seeing government in action can be a powerful wake-up call.

* I know, I know—as a libertarian I shouldn’t even have been at a planning board meeting (unless I was there to engage in civil disobedience)—the developer owned the property and he ought to be able to do what he wanted with it. But since my town forces me to do all sorts of silly things with my property, I wanted to be sure he wasn’t getting out of any silliness on his.

  • Andrew P. Morriss is the D. Paul Jones, Jr. & Charlene A. Jones Chairholder in Law and Professor of Business at the University of Alabama. He is coeditor (with Roger E. Meiners and Pierre Desrochers) of Silent Spring at 50: The False Crises of Rachel Carson, forthcoming from the Cato Institute.