Pacific Southwest Airlines post-deregulation ad (1985), showing their expansion beyond California. Image from Airbus777 on flickr.

Last week, Ilya Somin published a piece in the Washington Post’s Volokh Conspiracy blog entitled “the emerging cross-ideological consensus on zoning.” The lede:

In recent years, and especially over the last few months, economists and other public policy experts across the political spectrum have come to realize that zoning rules are a major obstacle to affordable housing and economic opportunity for the poor and lower middle class. By artificially restricting new construction, zoning and other similar land-use restrictions greatly increase the price of housing, and prevents the market from adjusting to increasing demand. This emerging consensus is a good sign, though it may be difficult to translate it into effective policy initiatives.

The issue isn’t zoning per se, but zoning (in practice) as a constraint against matching housing supply with demand. Somin notes that arguments about negative impacts from overly strict zoning come from across the political spectrum, ranging from the kinds of libertarian, free-market scholars you might expect, to Paul Krugman (noted previously here), writing “this is an issue on which you don’t have to be a conservative to believe that we have too much regulation.”

Somin draws the parallel to a past cross-ideological consensus in favor of deregulation: Airlines.

Airline deregulation is a bit of a misnomer. The Airline Deregulation Act of 1978 only removed government regulation of the airline business model; air travel is still highly regulated, particularly for safety purposes.  Here, the parallel with zoning is useful: zoning is just one set of regulations that govern development in cities. Building codes still apply; just as airlines are still subject to safety regulations.

Before deregulation, the Civil Aeronautics Board (CAB) controlled all of the key elements of the airline business: what routes could be flown (and by which airlines), the schedules of those services, and the fares airlines could charge. The market for air travel was completely controlled by the regulators.

Airlines couldn’t compete based on price, nor could they easily add new routes or serve new markets. With this tremendous constraint on capacity, they had no choice but to compete by offering luxurious service. Perhaps this sounds familiar to anyone who’s recently apartment-shopped in a tight housing market.

However, despite the conceptual similarities, there is one key difference: airline regulation was centralized in the federal government. Reforming things was relatively simple. Zoning is ubiquitous in American cities, but control over zoning is decentralized. There’s no national zoning office, no obvious equivalent of the Civil Aeronautics Board.

Because the Federal government can only regulate interstate commerce, the controls of the CAB did not apply within states. In big states that could support commercial air traffic wholly within their boundaries, there was already a preview of deregulation: Pacific Southwest Airlines (within California) and Southwest (within Texas). However, this intra-state experimentation in airline business models didn’t have the large impact on the industry until taken to scale nationwide. Likewise, because of the regional nature of housing markets, there’s not sure to be a benefit to a single city in a region to be the first mover on looser zoning.

Because of the decentralized nature of legal control over zoning, even an emerging consensus among legislators and policy-makers would have to be much deeper than the kind of consensus that deregulated the airlines. And even with a broad and deep consensus, the sheer number of jurisdictions that would need to take action is enormous.

For that reason, it’s hard to imagine action to change zoning on a scale akin to airline deregulation without some kind of intervention from the courts. Charlie Gardner covers the history of the jurisprudence of single-family-only zones and notes how long it’s been since these issues have been before the court – and how some of these issues have never been directly addressed:

Ninety years after the Euclid decision, land use debates in the United States continue to be distorted by this same dichotomy between “single-family zoning” and “multifamily” areas. Rather than talking about housing in terms of units/acre, or total floor area, or some other similar metric, we tend to use purported building types — whether single-family, duplex, triplex, ADU or other such classification. Yet these classifications are in a sense illusory. Whether a builder puts up three detached homes on a lot, three stacked units in a triplex, or three side-by-side units in rowhouse form really shouldn’t matter a great deal to the regulator.

The court’s confusion on this point may have stemmed in part from the lack of a concrete controversy. The respondent, Ambler Realty, was seeking to use its property for industrial purposes, and had no intention of constructing any residential buildings, much less apartments. The dispute was an abstract one which only pertained to the value of the land. Had the court been confronted with a scenario in which an individual builder sought to construct a two-unit building conforming to height and bulk regulations within a single-family zone, it could not have evaded the question so easily.

Charlie also cites Sonia Hirt’s excellent book Zoned in the USA, which documents America’s unique and ubiquitous single-family only zoning and how much of an outlier these regulations are in the world. In other words, outside of the consensus.

Would a challenge in the courts bring the US in alignment with the kinds of regulations used elsewhere in the world? Would posing the question to the courts embrace decades of regulatory momentum – or look to academics and policymakers for a new emerging consensus?