Street-by-street zoning could help make the world’s cities more affordable

The YIMBY movement is definitely on to something: In many parts of the world it is too difficult to build new housing. The result is that lower-income individuals are priced out of some of the world’s most productive cities, such as San Francisco and London, because of exorbitant rents.

That’s true as far as it goes. Still, there is the question: What can be done to bring about more housing? Homeowners, who may fear additional construction will damage their quality of life, aren’t always on board with the YIMBY movement (it stands for “Yes In My Back Yard,” in contrast to the more common anti-development “Not In My Back Yard” movement). The primary strategy of YIMBY forces to date has been to try to take regulatory authority for construction away from the local level, as California’s proposed bill SB 50 would by allowing the state to pre-empt some local restrictions. Japan has a good record for allowing new construction, backed by a strong national and weaker local system of land-use planning.

There is, however, a new and very different approach to construction and zoning regulation, and it deserves further attention. I call this idea “street by street zoning,” and it has been outlined in a recent paper by John Myers, co-founder of London YIMBY. The basic idea is simple: Let each street decide on its own how it wants to zone commercial activity, including construction. Of course, in some contexts the deciding entity won’t be a street but rather a block or some other very small neighborhood area.

That might sound a little crazy, like a 1960s hippie commune dream. Yet the idea has hidden potential. If streets chose their own zoning, city-level zoning rules could be quite general and open-ended, opening up the possibilities for more construction and also for more mixed-use neighborhoods. With that liberalizing backdrop, residents on any given street always have the option of more restrictive zoning.

The upside is that street-by-street zoning would allow so much room for experimentation. Some zoning reforms might increase home values; a street might decide to allow for multiple dwellings on a lot (an in-law apartment in a backyard barn?), or make it easier to “upzone” by making it easier to rebuild. And what about allowing, say, a small Sichuan restaurant on each residential street — would that boost home values? Maybe not, but at least there’d be a way to find out.

It is easy to think of zoning and regulatory decisions that should vary by neighborhood or even by street. Should it matter if new construction blocks the sunlight or views of current owners? How much should new building be limited to check traffic congestion? How important are aesthetics relative to other considerations, such as the ease of adding extensions? And how much should gentrification be encouraged or limited? Street-by-street zoning would allow for greater flexibility than decisions made at the municipal or county level.

There is no commonly known example of street-by-street zoning, but some partial instantiations of the idea can be found. In New Zealand, individual homeowners can waive some rules governing neighboring properties, and the English system of neighborhood planning allows for some use of local development plans, backed by local referenda.

To be sure, there are problems with street-by-street zoning. For instance, homeowners on most streets might be more restrictionist than the status quo. Still, the status quo seems so broken in so many places that perhaps it is worth taking that chance — new construction is already basically at the zero lower bound. At least there would be a direct incentive for homeowners to involve themselves in the decisions and support value-enhancing changes to the rules.

Another possible problem is that the street-level community meetings will involve so much debate that neighbors will come away with hard feelings for each other, leading to local enmity rather than community. Or perhaps residents don’t have the legal knowledge to make informed decisions on the particular wordings of zoning ordinances, and they would be manipulated or even bribed by developers.

Some of these problems may be a feature rather than a bug. If outside developers find local communities easier to manipulate than a city-wide board, it may actually result in more new construction. If neighbors on some streets really are not sure what they want, maybe it’s not a bad thing if they are nudged toward approving more new construction.

Neighborhood power can very much be a doubled-edged sword, but the point is not to institute this reform nationally or even statewide. How about starting with the experiment of a single town or city or county — or, for that matter … a single street?