Zoning is always troublesome for hard-core, free-market economists.
There are a few true-blue libertarians in the discipline. They argue that government should not regulate who does what where. But most economists accept the argument that some level of zoning can make an economy more efficient as well as more equitable.
In other words, zoning is not just a question of fairness or protecting people from having nuisances constructed right next to their existing homes or businesses, but it’s also a question of efficient use of resources.
By correcting problems of external costs and imperfect information, effective zoning programs can foster greater satisfaction of peoples’ needs and wants with the same use of resources than they would have without zoning. Zoning potentially can give a society more bang for the buck.
Such benefits of fairness and efficiency are only potential, however. Not every zoning program is well thought out or carefully administered. Bad zoning programs can be counterproductive and make society both poorer and less fair.
Recent news stories point out some of the ways in which zoning and land use planning can become problematic. Last week, a Minnesota court ruled that Carver Country no longer could block construction of a slaughterhouse intended to meet the dietary preferences of Hmong households.
However, another news report a week earlier described how a similar ethnic slaughterhouse proposed for Rice County was facing bureaucratic hurdles greater than those faced by 250 similar facilities already operating in the state.
The city of West St. Paul refused to let an existing retail business introduce check-cashing services despite obvious consumer demand because, the mayor said, “Check cashing is not the image we want.”
Auto dealers, trucking companies and other “undesirable,” land-intensive businesses have complained to legislators that municipalities increasingly employ extortive uses of zoning and land use regulation to force them to move elsewhere. “If it were not for your damned tanks, we could be an Edina,” an official in one Twin Cities suburb reportedly told the managers of a petroleum terminal.
The United States is nearly unique in how municipally fragmented the suburbs of major cities are. When such municipalities have unlimited control over land use, NIMBY impulses — not in my back yard — can run rampant.
Most households in our country have one or more automobiles, but few municipalities welcome auto dealerships. Most use thousands of gallons of gasoline per year, but no city wants a petroleum tank farm.
Tens of thousands of people want to buy meat, but no one seems to want a new slaughterhouse. Thousands of people want a place to cash checks, but we allow city officials to arrogantly decide, “There are enough bilingual people in the area banks for that type of thing.”
The outcome of uncontrolled municipal discretion about land use can easily become inefficiency and inequity. That is, we as a society end up with less satisfaction of peoples’ needs and wants than we would if zoning discretion were less broad. When zoning is abused, we pay more for our gas and travel farther to get to our car dealer and our financial institutions.
We also end up with a less fair society. Some people do not get the food they want, or have to pay more for it, because of their skin color, language or religion. Others do not get the financial services they prefer.
Ideally, municipal officials would keep broad societal needs in mind when administering land use regulations rather than some narrow “image of what we want.” If they fail to do so, for whatever reason, it would be wise for the Legislature to step in and protect the needs of Minnesota society as a whole by limiting opportunity for arbitrary, capricious and even bigoted local discretion.
© 2003 Edward Lotterman
Chanarambie Consulting, Inc.