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Houston Miracle Resembles Glen Cove’s Free-Market Past

By   /  July 16, 2014  /  1 Comment

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The old post office. Credit: DanTD / Wikimedia

There’s an interesting article up on The Wall Street Journal website about Houston’s success story–”a blueprint for metropolitan revival”–that ought to be read and applied to Glen Cove to contrast the successes and failures of policy.

Houston’s landscape of plains and grasslands and hot, humid weather isn’t what attracts people to the city. Yet since 2000, Houston has grown by 35%, while established cities such as New York and Los Angeles only grew by 5%. Since 2008 Houston has added 263 thousand jobs, while New York only saw 103 thousand.

Some of this can be attributed to the energy sector, which employs 240 thousand in the area. The average cost-of-living-adjust salary in Houston is $75 thousand, compared with $50 thousand in New York. Houston has also added mid-skill level jobs at a rate of 6.6% annually, while in New York these have contracted by more than 10%.

But Houston’s success is much better attributed to simple rules that enable entrepreneurs to get started quickly–sometimes in a single day.

Houston’s growth is more than oil-industry luck; it reflects a unique policy environment. The city and its unincorporated areas have no formal zoning, so land use is flexible and can readily meet demand. Getting building permits is simple and quick, with no arbitrary approval boards making development an interminable process. Neighborhoods can protect themselves with voluntary, opt-in deed restrictions or minimum lot sizes.

The city’s non-zoning approach received attention in 2008 when, at the height of the housing crisis, Houston’s real estate market remained exceptionally strong. “The market-driven nature of the city’s land market means that the housing sector is likely to rebound faster than in other cities facing traditional regulation through zoning,” wrote Samuel Staley of the Reason Foundation.

And it turns out gainful employment and access to affordable housing both profoundly impact the standard of living in cities and metropolitan areas. Forbes recently ranked cities based on factors of “cool”. These included net migration, unemployment rates, median age, non-chain restaurants, and diversity. Houston ranked first, while New York ranked tenth.

Glen Cove used to be what Houston is now. In fact, there was no zoning when Glen Cove became a city and grew abundant with industry, mom and pop shops, hotels, restaurants, and theaters. After Euclid v. Ambler, a 1926 U.S. Supreme Court that upheld single-use zoning, the city apparently followed other municipalities toward a trend of increased regulation of land use.

Even the Master Plan–the city’s framework for more regulation–laments that “Glen Cove is overwhelmingly single use.” In fact, this is supplemented with a table which illustrates the city’s over-regulated market. Here is the data in two pie charts.

Percent ParcelsLand Use by Area Glen Cove

 

 

 

 

 

This regime of single-use enables cronyism and even when the laws are well-intentioned, create all kind of distortions and externalities they were written to prevent.

Big Developers can lobby the City to write zoning laws in their favor to increase their land value while shutting out competitors. This could be why the “Marine Waterfront-3 District” ordinance takes 20 pages and 8 thousands words to describe permitted uses where the proposed waterfront stands vacant. On one side of Garvies Point Road, the zoning allows for 860 units of apartments and condos and a 260-unit hotel, while on the other it is an “R-1 Residential District” which allows only dwellings on one-acre lots.

On one side of town, the zoning allows for two-family dwellings, while in a similar neighborhood on the other side, it does not, effectively pushing all two-family dwellings on the side that allows it. Along the Cedar Swamp Road corridor, the zoning may call for an “I-1 Light Industrial District”, a “B-2 Central Commercial District”, an “R-4 Residential District”, an “I-2 Light Industrial District”, or an “R-4 Residential District”.

The question becomes, “how do they know?” and do they know better than a spontaneous entrepreneur who sees a better use?

A return to laissez-faire zoning would not equate anarchy. As the legal scholar Richard Epstein writes, this “choice of title suggests that, without zoning, individuals could do whatever they wanted with their own land-which tends to underestimate the role of nuisance law.”

The benefits of enabling Glen Cove’s entrepreneurs to use their superior knowledge in shaping the city’s future far outweigh the costs and unintended consequences of central planning through City Hall. The private actors who can revive Glen Cove should not have to go through the brain-frying zoning maze. Politicians should embrace Glen Cove’s free-market tradition and just get out of the way.

This would leave the people of Glen Cove free to prosper.

 

 

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About the author

Founder, Executive Editor

Before founding the Beacon, Mike worked at AOL Patch, Anton News, and most recently at Reason Magazine.

1 Comment

  1. […] been a busy week, but another article caught my attention. I’ve written about Houston, Texas on this site and why I believe it is doing so well. So, Businessweek reported that in August, […]

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