Robert Poole wrote a defense of single-family zoning on Reason.com, a libertarian website. He claimed that abolishing single-family zoning would violate a contract between a municipality and its single-family houseowners. He said that homebuyers accepted restrictions to protect themselves from negative externalities. He described California's attempt to invalidate single-family zoning as a pre-emption of local government.
There were many responses to Poole. This is a good one, written by another libertarian on Reason.com. But I want to talk about the fundamental origins of zoning from a libertarian perspective. By talking about the fundamentals and fairness, maybe we can get insights to improve our laws.
Let's say I own land in a neighborhood. There are plenty of things my many neighbors could do that will lessen my enjoyment of my land. Any of them might make noise. Or cut down trees and pave over nature. Some might build tall buildings that shade my garden. They all make traffic on my street. Most fill up the parking spots. And so on. There are literally thousands of ways each might annoy me, from the big to the small. These are the negative externalities that Poole mentioned.
And the reverse is also true. I can do thousands of things that might annoy one or all of them. I want to draw your attention to one aspect of this: these are all one-sided. I benefit from the restrictions on my neighbors and they benefit from restrictions on me. There aren't win-win restrictions here. Even something like "don't pollute" is one-sided, because it is a restriction on what I can do (even if I don't intend to do it right now). SEE NOTE AT END
Because these annoyances are one-sided, any contract can be balanced by money. You could imagine one landowner paying all their neighbors to not do things that annoying them. Paying them not to make noise, cut down greenery, build tall, make traffic, etc.. And, you could imagine the same for every other landowner in the neighborhood. Each paying their neighbors to not do the things that annoy them. You might have one landowner in the neighborhood paying $100 to second landowner to be quiet and that second landowner paying $100 back for to the first for them to be quiet.
But the payments don't have to equal out. Each landowner has their own preferences. And the land is different. The person with land at the top of the hill may worry less about shade and flooding than a person at the bottom. And a rich person might be willing to pay more to have their way than a poor person. The freedome to contract means there might be lots of different contracts.
Where should the government get involved in this? A strong libertarian might say it shouldn't, unless a landowner doesn't follow an agreement. That's a defendable position, but an expensive one: there are lots of similar but not identical contracts and everyone would have to hire a service to measure and prosecute violations on noise, trees, height, etc.. Enforcement would be cheaper if the contracts had only a handful of variations and everyone agreed on a single enforcement organization.
This where local government comes in: it is a low-cost solution. Local government is helpful when it can cheaply enforce the most common contracts between neighbors.
But local government is harmful when it uses the power of the state to require landowners have one of those contracts. When a landowner doesn't have a choice, when they cannot cannot broker their own agreement with others, is where the violation of freedom happens.
In many areas, while this theoretical problem exists, it isn't a practical issue. A city is often divided into many zones with different laws (mutual contracts) and most would-be property owners can find a piece of land that has a set of laws they find acceptable. If they want quiet, they buy in the quiet neighborhood. If they want trees, they buy in the tree-lined neighborhood. (If they can afford it.)
But this becomes a practical issue in changing cities. Austin is a fast growing city. There is a lot of land near downtown that is zoned single-family with a large minimum lot size. There is ginormous demand by potential property owners for houses on smaller lots or condos. And they are unable to find equivalent land with the zoning (mutual contracts) that they'd accept.
The practical solution is to change the zoning laws (mutual contract) on some land. That is, remove the minimum lot size and allow multi-family units.
City governments try to do this. They often propose to change the zoning on land near major roads and at the borders of the neighborhood. But the residents of the neighborhood protest. The reason is two-fold. First, the residents chose that neighborhood because it was quiet, sunny, and low-traffic and they don't want annoyances nearby. Second, the residents currently have a large piece of land near downtown for cheap rent and, under a freer market, they will not. These groups of residents are often called "NIMBY"s for "Not In My Backyard".
And because we let local government craft and enforce contracts, these NIMBYs use their votes to stop zoning changes and require new landowners to keep the contracts (zoning rules) of previous owners. And by forcing contracts on owners, the government limits their freedom. When zoning changes are allowed, it often comes with extractions for NIMBY projects drawn from new owners. It is legal extortion.
Thus, Poole is wrong. Zoning has always been restriction on liberty. Even if past property owners entered into it as a form of "mutual contract", enforcing it on new property owners is clearly wrong.
But many people had already written against Poole's ideas. The point of this essay was to get insight on what zoning is justifiable as a libertarian. So, what zoning laws should libertarians pursue? How can we ensure freedom and prosperity?
Another issue: How do I address pollution? And noise. Libertarians often say that someone is free to use their property until it affects someone else. But pollution affects someone else. Does that mean a polluter must pay their neighbor, rather than the neighbor pay them to not pollute? And, is noise pollution? Is anything other than nature "pollution"? E.g., if they don't have lovely trees on their land, are they "polluting" and need to pay me?
If we say you need to compensate neighbors for anything that isn't "natural", aren't larger buildings more unnatural than small ones? Maybe only a little from an externalities position, because of shade. A taller building doesn't create more flooding. Still, it seems a strange form of property rights to pay someone else for doing anything with your own land. Should a self-sufficient farmer be required to pay others because they farm and the plants and barn and house are not natural? Isn't a human living on land natural?
I just found Geolibertarianism where the land is owned by the community, but improvements on the land can be owned by persons. It is a form of Georgism, where the land's users pay rent to the common. It doesn't answer my question, but it shows that some others are thinking about it.