The Role of States in Liberalizing Land Use Regulations

Abstract

Across the political spectrum, economists agree that local land use regulations exacerbate inequality, decrease opportunity, and hinder economic growth by inflating housing prices. Local governments are structurally ill-equipped to solve this problem, which must instead be solved at the state level. Advocates of local control, however, decry nascent state intervention efforts as unprecedented overreach by state officials.

These efforts are not unprecedented, but they are misunderstood. Contrary to assumptions embedded in both the political debate and the land use scholarship, state-level liberalization of zoning has benefited users such as family day cares and mobile homeowners for at least forty years. These interventions remove local authority to ban certain land uses, while expressly permitting local governments to address a limited set of potential impacts of those land uses. This kind of tailoring requirement, which both addresses local governments' propensity to overregulate land use and recognizes local competency to address discrete aspects of development, ought to serve as a model for contemporary state intervention efforts. These intervention efforts, in turn, are a key component of any effort to address growing barriers to economic opportunity.