The Plan as a Deal for Housing – The Schleicher and Hills Theory

One for Students (and the students at UK Treasury) – couched in very American terms but an important paper as it couches land use plans within the framework of public choice economics\

Iowa Law Journal

plans and comprehensive remappings are best understood as citywide deals that promote housing. Plans and remappings facilitate trades between city councilmembers who understand the need for new development but refuse to have their neighborhoods be dumping grounds for all new construction. Further, by setting forth what can be constructed as of right, plans reduce the information costs borne by purchasers of land and developers, broadening the market for new construction. We argue that land-use law should embrace binding plans that package together policies and sets of zoning changes in a number of neighborhoods simultaneously, making such packages difficult to unwind. The ironic result of such greater centralization of land-use procedure will be more liberal land-use law and lower housing prices.

The context here is within a city but it should be applied in economic terms to within a housing market area.

One benefit of plans can be to facilitate cross-neighborhood bargains by giving the parties confidence that costs will be equitably distributed and citywide benefits will ultimately be achieved. It is helpful to think of such a plan as a “zoning budget,” in which regulatory restrictions are the costly item being allocated among neighborhoods. The purpose of such a “zoning budget” is to make cross-neighborhood commitments to limit such restrictions that, in the absence of partisan leadership, are difficult to supply. Such a budget would specify an overall goal of locally undesirable land uses, or simply quantity goals for different types of housing, for the entire jurisdiction. It would also allocate those land uses across neighborhoods, seeking to allay concerns from council members about being dumping grounds for new construction and to capture the benefits of cross neighborhood trades. Finally, the budget would include an enforcement mechanism, creating some sort of presumptive entitlement for developers to build the budgeted use until the citywide goal is met. None of these elements requires special apolitical expertise on the part of planners. The point is not that the plan represents some higher wisdom about the best uses of land in a city. Instead, the budget’s goal simply solves a collective-action problem from which local legislators otherwise suffer, because the goal is not focused on any particular neighborhood.

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