Subtle barriers to development.

Subtle Barriers to Development

Subtle Barriers to Development

Moneybox
A blog about business and economics.
March 7 2012 3:51 PM

Subtle Barriers to Development

The big challenge of trying to write for a broad audience about regulatory issues that are largely in the hands of local authorities is that it's extremely difficult to do justice to all the nuances of the topic. I think this Andrew Smith review of The Rent Is Too Damn Hight makes a great point:

Yglesias focuses much of his energy discussing building heights, which I’ve said before is a fairly lazy way of considering density. Kowloon Walled City achieved a density of 3.25 million people per square mile without a single high-rise. Of course we don’t want to live like that, but the fact is you can achieve fairly extreme densities without tall buildings; not all tall buildings are dense, nor are all dense neighborhoods tall. Yglesias briefly mentions other restrictions—such as parking requirements—but makes no mention of regulations that restrict supply based on costs, possibly by making construction very expensive with lots of rules and review polices and the like. Anyone who remembers the “Mosque at Ground Zero” controversy knows the issue wasn’t that they weren’t allowed to build a tall building or that historic protections prevented them from building where they wanted or in the style they wanted.
I think this is where a lot of the low-hanging fruit of housing supply lies. It is easily to imagine a situation where you had land where you could build a much bigger building legally, but the paperwork, codes and by-laws were too burdensome to make the project worth while. This essentially happened to a friend of mine, who wanted to construct an accessory dwelling unit in his back yard in the Central District but when faced with the paperwork and permitting finally decided that it wasn’t worth the effort. If more dense development in expensive cities is a police goal we want, then we should think of these other ways of inducing the construction and increasing incentives. Obviously current zoning in Seattle allows for a lot more development than is being realized; there are two huge empty wholes in the ground downtown where literal skyscrapers can go up. There are also dozens of parking lots through the city where dense development could happen. There have to be more reasons than just zoning that these haven’t been developed, and we should explore what these issues are.
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Building height is very salient where I happen to live, and it also has the virtue that it's extremely easy to explain the connection between a rule against tall buildings and a lack of residential density. But as he says here, there are a lot of other issues in play. To really understand the details in any given city you have to look at local conditions and the ins-and-outs of the planning and approval process as it occurs in practice. I don't think any quick national overview summary can really do justice. The takeaway point that does apply across the board is that differential "cost of living" between different metro areas generally reflects regulatory constraints and not some inherent quality of Portland, Ore. that makes it more expensive than Portland, Maine.