Houston is the only major American city without zoning. Some argue that Houston is effectively zoned, as many neighborhoods have covenant restrictions that limit development. But in his new book on zoning, M. Nolan Gray points out that only 25% of Houston is covered by these covenants, and even in those cases the restrictions are less stringent than express zoning laws. So how are things playing out in Houston?

For the most part, Houston’s positives are associated with its lack of zoning, and its negatives are largely unrelated to zoning. Many people imagine zoning as somehow protecting people from negative externalities. In fact, ordinances against public nuisances have been around since long before zoning was first adopted in 1916 (in NYC and Berkeley), and even Houston has many such ordinances. Here’s what Gray Houston describes:

According to city regulations, the slaughterhouse—a primary zoning boogeyman—must be 3,000 feet from the nearest resident; Oil wells cannot be within 400 feet. Strip clubs and other adult-oriented businesses cannot be within 1,500 feet of a school or church; Liquor stores and bars cannot be within 300 feet (obviously, cravings are more aggressive than gluttony.) and billboards are widely prohibited throughout the city.

So how does Houston benefit from the lack of zoning? Think about how cities were built before zoning was created. The densest area (say Manhattan) is in the center, where there are many tall office buildings. A little further (say Brooklyn) you have townhouses and large apartment buildings. Even further out (say Long Island) you have plenty of single family homes.

After zoning was adopted and tightened in subsequent decades, this natural growth pattern was artificially suppressed. In a free market, there would be many more large apartment and condo buildings in Central Los Angeles.

Central Houston developed more naturally than that the fairies, as the city has grown into America’s largest metro area (approximately 7 million people, of which 2.3 million live in Houston itself.) In central Houston, residential lots, including an old ranch house, are rapidly being converted into three modern townhouses. Many large apartment buildings and condos are being built on the nearby west side. The city is constantly being rebuilt, in a style that aptly reflects its growth into a major city.

in Tweet belowYou can see how Houston’s permissive permitting rules allowed a residential area to become denser in just two decades.

You might be thinking, “But I prefer single-family homes with big lawns.” Then I have good news for you. A free market like Houston still has plenty of such neighborhoods (and many more in the suburbs.) At the same time, the market tells us that there are plenty of people who prefer to live in dense neighborhoods near major urban centers. Areas Unfortunately, most zoning plans make such neighborhoods illegal.

Not all of Los Angeles County has to look like Brooklyn. But LA deserves an area like Brooklyn that’s close to major job centers.

Houston is not as attractive a city as LA (or even Austin.) It’s hot, humid, flat, prone to flooding, and (AFAIK) has the largest collection of petrochemical facilities in the world. Yet despite all these negative attributes, lots of people move to Houston every year. (Both rich and working-class immigrants.) This is partly due to its housing policy, which keeps prices reasonable despite abnormal population growth.

Rest assured. There have been three referendums in Houston to allow zoning and it has been rejected all three times. Gray suggests that this is partly because working-class voters tend to oppose zoning, and more affluent areas were bought with the promise that private covenant restrictions would continue to be enforced. In American politics, no one ever achieves anything without compromise.

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