The Neighborhood Veto And Its Discontents

The Issue Neighborhoods have effective veto power over rezonings near them. When a rezoning is proposed, neighbors of the affected property get notice City governments have incentives to favor neighborhood input over property rights or citywide interests: landowners proposing rezoning may have one (or zero) votes, while neighbors may have many

Two problems with neighborhood veto 1. Housing supply and affordability – neighborhood veto means city cannot easily rezone land to add more housing, which means housing supply permanently stunted, which means higher rents 2. Sprawl- neighborhood veto artificially reduces housing density, causing automobile-dependent development, causing more greenhouse gas emissions

Housing supply Neighbors have incentives to oppose any rezoning that adds new housing. They suffer 100 percent of any negative externalities from new apts or houses, but because housing markets are citywide they may benefit only slightly from reduced rents, or suffer from lower property values if they are homeowners. Less rezoning= lower housing supply= higher rents

Housing supply vs. housing costs % post-2000 change in housing supply median monthly rent Austin 58 1144 Las Vegas 55 800 Orlando 44 975 Houston 39 962 Phoenix 39 800 NYC 7 2500 Los Angeles 8 1760 Boston 9 2400 San Francisco 10 2323

Counterarguments “If we zone for more houses land costs will rise”- but landowners can compensate by adding more housing units “If we have more houses/apts they will only be for rich people”- but they still might lower costs of older apts

Neighborhood Veto Reduces Density – What’s wrong with that? Neighborhood veto= less density, as new housing shifted to undeveloped areas where there are fewer neighbors to object In thinly populated places very few people can live within walking distance of anything. Example: public transit use minimal in places with under 7-10 housing units per acre because few can walk to bus stop. More driving = more greenhouse gas emissions Car-dependent low-density= less mobility for nondrivers

Other defenses of neighborhood veto Mostly “beggar thy neighbor” arguments- shifts problem elsewhere rather than reducing it For example: traffic- if new residents don’t create traffic in YOUR neighborhood they will create it wherever they move Community character- again, new residents will change community character wherever they move

Solutions: radical or moderate? Radical- all housing shall be treated equally. No more density limits. Moderate- pay off neighborhoods to support less restrictive zoning In between- similar to radical but only in certain areas