Abolish Zoning?

Much is made about how our cities manage the growth of the housing stock by engaging in the process of “urban planning”, that this is performed by “urban planners”, and that the colourful maps which are the outcome of this process done by these people are “plans”.

In fact, none of these things are true. 

We engage in the process of zoning, which is done by zoners, who produce zoning maps. This is not planning! A plan is an intention or decision about what one is going to do. While our zoning maps may be intentful and occasionally decisive, they do not define what is done. Rather, they define what can’t be.

Planning of the built environment is the sum of many thousands of plans made by developers and utilities providers who plan to construct buildings as well as the streets, wires, and pipes that underpin it. What land use regulation (of which zoning is one kind) exists to do is constrain the plans of those groups.

That is not to say the plans of these many actors ought to be executed unfettered. It would be a terrible waste of society’s scarce resources to be building roads in one place, pipes in another, and houses somewhere else again. Restricting uncoordinated activities is a reasonable approximation of coordinating them.

There’s also a great deal of value in coordinating production of the built environment. Building polluting industry next to a school is quite obviously undesirable. Indeed, this was the situation that zoning was invented to stop.

More broadly, urban environments are defined by the interactions of many people and things, and inevitably those actions are going to impose costs (whether economic, environmental, or social) upon others — what an economist would call an externality.

But it’s got out of hand. What started as labelling schools as sensitive to noxious activities like burning coal has devolved into labelling residential areas as ‘sensitive’ to ‘noxious’ activities like dairies, cafes, and barber-shops — while frequently labelling new housing within the urban limits as “out of character” with the existing environment, pushing development either to the urban periphery or stopping it completely.

Hold on – what is zoning?

Zoning works by assigning each lot in the city a category called a ‘zone’. This category comes with some set of rules that define what can be built on that site, and what can be done within the building – nominally to ward off some negative effects imposed upon city.

Contrary to what you might expect, a ‘zone’ is not a contiguous set of parcels that roughly correspond to a block, neighbourhood, or suburb, but rather there is a few dozen of these categories that are splattered across the city.

At a high level, these ‘bundles of rules’ regulate use – primarily sorted into three major groups: residential, commercial, and industry. Within these, you have more granular controls on the exact nature of use – for instance, residential has limits on the number of dwellings permitted before you need some degree of council discretion.

Additionally for each use, it regulates the form of buildings that get used that way – through controls like height limits, setbacks, recession planes, and site coverage maxima.

Most of these rules are not hard-and-fast, and instead allow some ‘flexibility’ through different pre-described processes. Roughly, these are (in order of severity):

• Permitted
• Council discretion
• Limited notification (hearing with affected stakeholders)
• Public notification (hearing with the public)
• Not Permitted

All of this seems like a mostly reasonable way of regulating land use. And yet, stories like this are not uncommon from people interacting with zoning for the first time:

We are well on track to spending over $500k to get consent. Some of this we would have needed to spend anyway, but lots of it is just producing nothing for us and nothing for the city.
For the gory details, the hearing documents are available here https://t.co/3RUdoStJIE

— Cohaus (@CohausNZ) September 5, 2018

So, what’s gone wrong with zoning?

The original sin of zoning is that it believes that different land uses are to be kept as separate as possible, and conversely that similar land uses are to be put together. This was a reasonable approach to limiting the damage of polluting industry, but translates to little outside this.

It does this because it’s understanding of externality is hyper-local: it rarely asks more than the question “how would use of this building affect the use adjacent ones?”

In doing so, it has become detached from the actual regulation of externalities, focussing much more on the good- and bad-faith aesthetic complaints of neighbours than activities that would do harm to the community.

As evidence of this, you’ll often find zoners will push back against a resource consent for things like supermarkets on the basis that it will cause congestion in the surrounding area.

In doing so, it locks people into having to travel further to access a supermarket — generating more VKT and congestion. But because zoning places emphasis on the externalities imposed upon local residents over the city at-large, this isn’t considered.

It followed logically from zoning that separating high-level uses was not enough, and that buildings of the same use but different form ought to be separated as well. In other words, apartments and townhouses aren’t to mix with single family homes.

While we’re overcoming this with time and great effort, the spatial segregation of our cities by use will remain. We could overcome this by allowing mixed use by-right (which would be a great reform), but there’s a sense in which the term “mixed use zoning” is oxymoron – to allow for a mix of uses and a mix of building forms is simply to not do zoning.

So why retain it? Well, there still the benefit of integrating land use decisions with infrastructure. Zoning is not the ideal tool for this, but works okay in theory – having tighter constraints on the total amount of allowable housing capacity further from higher capacity infrastructure.

But ultimately our built environment is political: if the pipes are flooding or the roads are congested, they’ll complain to their local councillor or MP, and it’s their decision whether to use public funds to improve them – and so it follows that zoning is, too.

As the outcome of a largely political rather than technical process, it doesn’t constrain plans where it is desirable to do so, but rather where it would negatively affect those with the largest voices.

This means that zoning rarely coordinates development with infrastructure. Nowhere is that more evident than Auckland: while Te Atatu turns into shitty Paris with barely a bus service, transit-rich places like Kingsland or Mt Eden nearly entirely ban more intensive development.

Okay, it’s not working well. What should replace it?

Zoning tries to be one tool to solve many problems, but ends up doing little well. A more effective approach would be to ask: how do we efficiently solve each problem that we are trying to overcome?

Integrating land use and infrastructure

Within our existing land use regimes, we occasionally use tradable credits — an example close to home is in the Auckland City Centre Zone, which uses them to manage floor space rights.

A simplified model of this is: if you hold 4,000 credits, you are allowed to construct a building with 4,000sqm of floor space. If you don’t want to construct that much floorspace, you are free to sell those credits to someone who can.

In this instance the design of the scheme is completely arbitrarily just trying to constrain development – and is consequently being abolished with the implementation of the NPS-UD, which seeks to maximise development in city cores.

But the concept is sound, and could be applied more successfully to integrate development and infrastructure. Councils could issue credits that constrain an effect down to the capacity of the infrastructure that handles that effect.

To illustrate: if it’s determined that the best way of managing stormwater run-off is with site coverage controls, then for each square meter of site that a developer wants to cover with impermeable surfaces, they would have to have as many credits. Likewise, you may decide to have a similar system controlling a development’s bedroom or bathroom count to manage drinking- and waste-water usage.

The number of credits in circulation would be proportionate to the expected drainage capacity of the area’s stormwater infrastructure. Importantly, this means that when the local authority or utilities provider upgrades the underlying infrastructure, they release extra credits, which can be sold to developers to fully recover the cost of that infrastructure.

This means that as an area becomes more desirable and development rights consequently trade for higher prices, infrastructure providers would be able to easily identify the areas where there is the greatest demand for housing – meaning housing development wouldn’t only integrate with infrastructure provision, but infrastructure provision with housing demand.

Externalities

Dealing with the output of industrialisation is the not the issue it was. In most parts of the modern city (even within an industrial area), the most toxic place you can find yourself is usually near to a busy road.

Even if your land use regime let them, it would be surprising for new industry to be built in the suburbs. There naturally exist strong incentives for industry to co-locate, mostly as moving trucks through urban environments is difficult, so it’s easiest for the industry which depends on them to be bunched together. And even if you had good truck access, factories and warehouse require massive sites — which are extremely rare in residential areas.

The issues that the modern city must grapple with are different — they are mostly the consequences of the automobile: safety, pollution, noise, and congestion. At best, none of these are solved through zoning. At worst, zoning magnifies them.

The reality is that regulating a building which potentially enables a certain type of activity with a particular externality is hare-brained solution when you really should just be regulating that activity.

That is to say, zoning or not, the future of urban externality management in Aotearoa looks like more regular enforcement of traffic laws, well designed streets, congestion charging, clean air regulations, and a more multi-modal transport system.

Neighbourhood Amenity

Houston is notable as a city which famously does not have zoning.

To the extent that Houston has integrated land use and infrastructure, it’s been with extreme highway projects and suburban sprawl. Until recently, investment in active and public transport had been next to non-existent.

It is also not without non-zoning land use controls – minimum car parking requirements exist everywhere in the city, and large minimum lot sizes which de facto mandate single family homes are persuasive.

That is all to say – it is certainly not an exemplar of good urban development and design. But it does offer a useful case study into how a city can function without zoning. Most notably, in lieu of public regulation favouring the protection of private ‘amenity values’, private restrictive covenants have become the norm.

If a group of neighbours decides that their neighbourhood is of a special character that ought to be protected, they are free to do so by agreeing to sign covenants. But in doing so, they would have to weigh up the benefit of crafting their suburban colonial enclave against a lower resale value if developers can’t do anything with it.

And conversely, if a sufficiently motivated developer is keen to re-develop a neighbourhood covered in a covenant, they can try to purchase every affected property and nullify it.

This has the effect of making it easier to weigh up the benefits of “amenity” against development than when they’re codified as pseudo-human rights in zoning.

However, Houston also shows it does require some thought and trepidation – like zoning elsewhere, many covenants in Houston are motivated by social and/or racial exclusion. Giving courts the power to nullify or modify covenants when it appears that they’re used in exclusionary or frivolous ways would likely be necessary.

Likewise, it would likely be desirable to give urban development agencies like Kāinga Ora the power to nullify or modify where the national significance of urban development is deemed to be more important than covenants, just as they can do with land acquisition and similar powers.

Do Urban Planning

Cities have tens or hundreds of thousands of stakeholders in the kinds of decisions that influence our built form – it would be infeasible for the local government to plan (rather than simply regulate) the entire city.

But there are parts of the city which are nodes of activity with relatively few stakeholders: town centres. Working with local businesses and landowners to create agreed-upon plans backed by urban designers and funds committed to do it would help to build and develop local communities.

Conclusion

With the Randerson Report (which is informing the government’s reform of the resource management system in NZ) having already identified many of the issues and future tools noted here, hopefully we can soon move to a post-zoning world – or at least one where zoning is done more rationally.

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