Zoning Budgets and enforceable comprehensive plans

In Schleicher and Hills (2011), David Schleicher and and Roderick Hills, Jr. proposed that local governments give themselves “zoning budgets.” A zoning budget would provide a minimum planned zoning capacity for that local government. A local government contemplating a down-zoning in one neighborhood would force itself to offset the loss in zoning capacity through an up-zoning elsewhere — in short, to balance the zoning budget. Schleicher and Hills analogized the zoning budget to federal base closing commissions. The process would force local neighborhood organizations to compete against one another to stave off up-zonings in their neighborhoods, just as federal legislators jousted with one another to stave off base closing in their districts. The problem, as they see it, forcing procedures in which reduced development entitlements in one location must be paired with increased development rights in another can “induce conflict” by pitting neighborhood groups against one another.By contrast, without a mechanism like a zoning budget, neighborhood groups have an incentive to cooperate with one another to form “log-rolling coalitions,” trading affirmative votes to down-zone each other’s neighborhoods.

An obvious problem with their zoning budget proposal is that city officials lack the political will to stand up for a balanced budget come budget time. The prevalence of aldermanic privilege makes ex ante agreements unstable. And so in Schleicher and Hills (2015), they proposed an enforcement mechanism for making zoning budgets binding: the comprehensive plan. Under their proposal, plans and comprehensive remappings would be understood as citywide deals that promote housing. Plans would set forth what can be constructed as of right, broadening the market for new construction. Plans could call for specified increases in density in exchange for “goodies” such as affordable housing or transportation infrastructure improvements.

Schleicher and Hills offer useful proposals. The comprehensive planning process in many cities does reflect a “grand bargain” dictating increased density in areas that might not otherwise receive it. The problem, though, lies in the fact that wealthy neighborhoods have a disproportionate incentive to channel up-zonings to less valuable portions of the city or to areas, such as busy commercial streets, that lack the amenities of neighborhood interiors. Austin’s Imagine Austin is a case in point. Despite widespread involvement, a repeated desire to establish a “compact and connected city,” and broader variety of housing, the comprehensive plan approved included language insulating established neighborhood interiors from radical change.