Anything Zoning Can Do, Covenants Can Do Too
Posted 63 days ago by Yevgeny Shrago
Slate economics blogger Matthew Yglesias recently released a new eBook single, titled The Rent is Too Damn High. Yglesias’s book blames high rents on inefficient land use, caused largely by various governmental anti-density restrictions. I’m highly sympathetic to Yglesias’s position. Ideally, desirable land would be used as densely as the market would bear, lowering rents on each unit to make housing more affordable while increasing the effectiveness of government services and raising overall land values. However, Yglesias’s focus on zoning and other governmental restrictions ignores the important private bars on density caused by restrictive covenants.
Although many communities enact zoning restrictions in order to maintain their neighborhood character, either in terms of architecture or income composition, communities subdivided from a larger plot of land have had the opportunity to restrict density without government intervention since the British case of Tulk v. Moxhay. By subdividing the land pursuant to a master plan, developers can and often do set restrictions similar to those that would be created politically. Private ordering can create minimum lot sizes, setback requirements and bans on guesthouses, all enemies of density that Yglesias correctly identifies. Such covenants are not a small-scale phenomenon that collapses outside the subdivision scale. Houston’s famed (at least in urban planning circles) lack of zoning is largely a mirage, as deed restrictions and other mechanisms, like parking lot requirements, impose identical requirements. Zoning requirements might be viewed as an agreement by property owners to avoid the hassles that come with trying to create a covenant, as well as the potential pitfalls of eliminating it if circumstances change, while reaping similar benefits. Read more
