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III. Land Use Controls,
Household Sorting, and Poverty
A. Land-Use Controls and Zoning
1. Controlling population
growth
Limit population growth to
control undesirable side effects (pollution,
congestion, crime, etc.)
a. Urban boundaries
Control population
growth by limiting land area of a city
Urban growth
boundary - no development beyond a
boundary
Ex. - Portland
Urban service boundary
- refuse to extend urban services (sewers,
roads, schools, parks) beyond a boundary
Ex. - Boulder
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Consequences:
- Supply of land
decreases, price of land increases
- Price of land
outside boundary decreases to
agricultural level
- Population is
lower because housing prices higher
- Supply of labor
lower, wage higher
- Higher wage =>
increased migration, increase in
quantity of labor supplied
- Increased density,
increased residential area
- Higher wage =>
higher production costs, decrease in
quantity of labor demanded
- Decreased
employment density, decreased
business area (CBD)
- Winners =
residential land owners
- Losers = land
owners outside boundary, business
land owners
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b. Controlling building
permits
Limit number of
building permits issued
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Consequences:
- Equilibrium price
of housing increases.
- Cost of producing
housing decreases - demand for land
decreases, price of land decreases.
Permits distributed by
auction to highest bidders, point system to
rank development proposals
2. Zoning
Designate appropriate uses
for land in a city
a. Nuisance zoning
Separate land uses that
are incompatible - land use generates
negative externalities
(1) Industrial
nuisances
Noise, glare, dust,
odor, vibration, smoke
(a) Industrial
zoning
- Keep
industrial uses in one area
- Doesn't reduce pollution
- Effluent fees more effective
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(b) Performance
zoning
- Set standards
for pieces of land
- Can locate on
land if standards met
(2) Retail nuisances
- Congestion, noise,
parking problems
- Performance zoning
allows retail if standards for
parking, traffic, and noise are met
(3) Residential
nuisances
- Traffic,
congestion, noise, shortage of
parking, deprivation of views - associated with high
density housing
- Performance zoning
allows residential if off-street
parking, street improvements, and
building design standards met
b. Fiscal zoning
Public services
financed with the property tax - exclude uses
that cost more in services than bring in in
tax revenue.
(1) High-density
housing
Apartments, small
lots => less revenue, more costs
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(a) Exclusionary
zoning
- Require large
lots => high housing costs,
more revenue
(b) Inclusionary
zoning
- Require
developers to build low-income
housing
- Part of cost
borne by other homeowners,
developers
(2) Fringe land use
More expensive to
supply services in fringe areas
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Solve by:
- Impact fee
(development tax)
(3) Commercial and
industrial development
Infrastructure required
c. Design zoning
Concerned with design
of city
(1) Directed
development
Direct development
to certain areas of city
Transferable
development rights - rights to
develop given out, can be sold
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(2) Open-space zoning
Land zoned as
"open space,"
"greenbelts,"
"agricultural preserves"
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d. Is zoning necessary?
Ex. - Houston =
no zoning
- Location of
industry similar to other cities
- More strip
development than in other cities
- More low income
housing, lot sizes smaller
- Landowners
negotiate restrictions on land use
- Market forces keep
incompatible uses apart
3. Legal basis for land-use
controls
Standard State Zoning
Enabling Act (1926) - U.S. Department of Commerce
Police power -
control private behavior to promote public
health, safety, and welfare
Criteria for
constitutionality of zoning:
a. Substantive due process
- Zoning must be for
legitimate purpose using reasonable means
- Zoning legitimate if
some benefits generated - monetary,
physical, spiritual, aesthetic
- Key court case: Euclid
v. Ambler (1924)
b. Equal protection
- Must be applied in
non-discriminatory manner
- Zoning requiring
diversity considered okay by courts
- Key court cases:
- Ybarra v. Town of Los
Altos Hills - zoning that
discriminates according to income is
legal
- Southern
Burlington County NAACP v. Mount Laurel
- exclusionary zoning hurt low-income
outsiders, low and moderate price housing
required
c. Just compensation
Taking clause -
landowner must be compensated if land taken
away by government
(1) Physical invasion
- Compensation
required if government occupies land
(2) Diminution of value
and reasonable beneficial use
- Compensation
required if zoning reduces value by a
large amount - uncertain about what is
large amount
(3) Balancing means
(benefit-cost)
- Compensation
required if cost of zoning exceeds
benefits
(4) Harm prevention
- Compensation not
required if zoning is to prevent harm
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