Houston has almost no zoning, and its houses cost less to prove it

Somewhere in a coastal city tonight, a young couple with two jobs and a baby is looking at a one-bedroom apartment that costs more per month than their parents paid for a mortgage on a four-bedroom house. They will do the math, sigh, and start looking at Texas. And in Texas, they will discover something that the people who designed their coastal city's rules would find faintly scandalous: a very large city where, if you own a lot and the neighbors have not signed a private agreement against it, you can mostly build something on it.

I am talking about Houston, the fourth-largest city in America, the largest in the country without a conventional zoning code. Folks, it is the great embarrassment of the planning profession. Nobody told Houston it could not have a functioning housing market, and so it went and had one.

What "no zoning" actually means

Let me be precise, because the claim is sometimes exaggerated by both sides. Zoning is a legal system in which a city divides its land into districts and assigns each district a list of permitted uses: this area for single-family homes, that one for apartments, another for shops, another for factories. Zoning also commonly dictates how big a lot must be, how tall a building may rise, how much of the lot may be covered and how many parking spaces are required.

Houston has no such map. A property owner there does not need a rezoning to put a store beside a house or a duplex beside a bungalow. But Houston is not the Wild West, and it is not a city without rules. It has building codes, fire codes and floodplain rules. It has ordinances on setbacks, on lot sizes, on parking, on the width of streets, on signs and on sexually oriented businesses. What it does not have is the tool by which a city says that a particular parcel may be used only for one purpose. Land use is shaped by the market, by those ordinances and by something else that deserves a section of its own.

Three times the voters said no

Houston's lack of zoning was not an accident of history. It was a choice, made repeatedly, by voters.

In 1948, 1962 and 1993, the city put zoning to a public vote, and each time the voters turned it down. The 1948 and 1962 rejections were decisive. The 1993 vote was far closer, and it still lost. A city that wants to know what its own people think about a rule of this kind could ask them three times over forty-five years, and the answer was the same.

The reasons that opponents gave varied from decade to decade. Some feared the loss of property rights, some feared that the zoning map would be written by developers and insiders, and some thought that a growing city needed room. I would add a Founding-era comment: the Supreme Court upheld zoning as a valid use of the police power in Village of Euclid v. Ambler Realty Co. (1926), so the practice is constitutional. The question is whether it is wise, and Houston's voters kept answering that question for themselves.

What Houston uses instead: private deed restrictions

Now the part that surprises people. Houston's neighborhoods are not an anarchy. Many of them are governed by deed restrictions, also called restrictive covenants: private agreements, recorded with the land, that bind every owner in a subdivision. A deed restriction can say that lots may be used only for single-family homes, that houses must be set back a certain distance, that fences have a maximum height and so on. They run with the land, so a new buyer inherits them.

Many of Houston's best-known residential neighborhoods have such restrictions, and the people who live there enforce them. A homeowners' association or an individual owner can sue to enforce a covenant. The significant thing is who writes the rules. In a zoned city, the rules are written by a city council and can be changed by a vote of the council, often at the urging of a developer with a lawyer. In Houston, the neighbors who bought into a subdivision wrote, or inherited, the covenant, and changing it requires their consent.

That is a very conservative idea, and it is worth saying plainly. It treats land-use rules as contracts among property owners, which can be negotiated, priced and enforced, and not as commands from a public body. If you want a quiet street of single-family homes, you can buy into one that has a covenant to that effect. If you want something different, you can buy somewhere else. Both choices are available.

Smaller lots

Houston is not a free-for-all in lot sizes, and its recent history shows the city nudging itself toward more housing, not less. The city has had a minimum lot size ordinance for decades. In 1998, the city reduced its minimum single-family lot size from 5,000 to 3,500 square feet, which opened the door to townhomes and small-lot houses in the neighborhoods nearest downtown. The effect of those changes was a wave of new construction in the inner neighborhoods: tall, narrow townhouses, replacing older single-family homes, in neighborhoods that a zoned city might have frozen in place.

I would point readers to the city's own planning department for the exact numbers and the dates, since the ordinances have been amended more than once. The direction is not in doubt. When Houston wanted more homes, it relaxed a minimum standard. When the people in other cities want more homes, they hold public hearings for three years.

The prices

Now to the headline claim. Does the absence of zoning make houses cheaper? The honest answer has two parts.

The first is the economics. Price is determined by supply and demand. Houston is a large, growing city with a strong job market, so demand for housing is high. What keeps prices in check is that supply keeps up. A builder who sees a profitable opportunity can build, without a rezoning hearing, a variance petition or a neighborhood fight, and so more homes appear to meet the demand. In cities where the process of getting permission to build takes years and can be defeated by a few vocal neighbors, supply cannot respond, and prices rise.

The second is the evidence, which I invite you to check, since figures change every quarter. Compare the median home price in the Houston area with the figures for large coastal metros such as Los Angeles, San Francisco, San Jose, Boston and New York, from a source such as the Census Bureau or a national real estate data service. The gap is large and has been for years. Houston's median home price sits at a small fraction of the coastal cities', and its rents, relative to incomes, are among the lowest of the largest metropolitan areas. I will leave the dollar figures for you to look up for the year you read this, because I will not quote a number that goes stale.

I will add a caution. Houston is not the only difference between Texas and California. Land is cheaper, the state has no income tax, and the Texas economy has drawn people for decades. Not every dollar of the price gap is the result of the missing zoning code. But economists who study housing supply, from across the political spectrum, have pointed to land-use restrictions as a major reason why housing is scarce where it is scarce. Houston is the case in which the restriction is absent, and prices are not high.

The steelman: planning protects neighborhoods

Here is the best case for zoning, in words its defenders would accept.

Cities are shared spaces, and what one owner does affects the others. A factory next to a school, a bar beside a nursery, a high-rise that blocks the light from every house on the block: those are real harms, and zoning exists to prevent them. A planned city, with orderly districts, can make better use of roads and utilities, protect residential areas from noise and pollution, and give homeowners confidence that their largest investment will not suddenly lose value because a neighboring lot changes use. Zoning is also democratic, since it lets a community decide what kind of place it wants to be. And, the argument concludes, it is a legitimate use of the police power, as the Supreme Court has said since 1926.

I accept most of that, as far as it goes. Nuisance is a real harm, and the law has always handled it. The question is whether a comprehensive map, drawn by officials and amended by political bargaining, is the best way to prevent nuisance, or whether the older tools do it with less cost: the law of nuisance, private covenants, environmental and safety codes and the simple requirement that a builder deal with his neighbors. Houston's answer is that those tools are enough for most of what zoning is claimed to do.

The objection: unplanned growth, sprawl and flooding

Now the objection that every visitor raises, and it is a serious one. Houston flooded badly in Hurricane Harvey in 2017, with tens of thousands of homes damaged. Surely, the critics say, a city without zoning builds in the wrong places and covers the ground with concrete, and that is why the water rises. Houston also sprawls.

Let me take those in turn.

Flooding. Houston sits on a flat coastal plain crisscrossed by bayous, in a region that receives heavy rainfall, and no land-use scheme could make it high ground. Harvey dropped rain of historic proportions, and cities with zoning have flooded too: flood damage in a storm is a function of rainfall, drainage, elevation and floodplain rules, and zoning governs only what use a lot may have. The relevant question is whether Houston's rules on drainage and floodplain building were adequate, and after Harvey, the city moved to tighten its floodplain building standards. That is a reform in the building code and the drainage rules, which Houston has, and not in the use map, which it does not. A flood-control regime can exist without zoning and can fail with it.

Sprawl. Houston is physically enormous, and it has grown outward. But sprawl is a result of cheap land at the edge of the city and of the desire of families for more space, and a city with zoning can sprawl too: a map that limits density in the center pushes growth to the fringe. Houston also builds up and in, and its recent inner-city townhouse boom is exactly the kind of infill that zoned cities find so hard to approve. A city that lets you build near downtown will see less pressure to build at the edge, not more.

The numbered argument

1. Housing is a supply question. Where it is easy to build, homes are cheaper. Where it is hard, they are expensive. Houston is a large-scale example of the first.

1. Rules can be private. Deed restrictions give neighborhoods the protection they want, by agreement among owners, without requiring a city map.

1. The voters chose this. Three times, in 1948, 1962 and 1993, the people of Houston declined zoning. A conservative should respect a city that decides for itself.

1. Flood risk is a drainage problem, not a zoning problem. The fix after Harvey was in the floodplain rules, which any city can adopt.

1. The alternative is not an absence of order but a different order. Property, contract and local knowledge do much of what a planning commission claims to do.

The Founding angle

Madison wrote in 1792 that government is instituted to protect property of every sort, and that a man has a property in his land and in the free use of it. The tradition behind the Constitution is a tradition of owners who may use what they own subject to the law of nuisance and the rights of others. Zoning flips the presumption: you may do nothing with your land that the city has not pre-approved. Houston flips it back. And it does so as a local choice, which is the kind of choice the Constitution leaves to the states and their cities, a point developed in Federalism Lets Fifty States Experiment, and the Constitution Planned It.

If you want the other half of the housing story, the one about what happens when a city caps rents instead of building homes, read Rent control's record from Stockholm to San Francisco is the same story. For how the federal government helped to inflate a housing bubble, see The 2008 housing crash began with Washington's push for easy mortgages. And for a similar story of one state's rules getting in the way of work, see arizona's universal license recognition and the case for copying it.

What other cities can copy

You do not have to abolish zoning to learn from Houston. The practical lessons fit in a short list.

• Allow smaller lots and more homes on each lot, by right, without a hearing.
• Reduce or end minimum parking requirements.
• Make approval a matter of meeting a written standard, not winning a vote.
• Let neighborhoods that want covenants adopt them privately.
• Keep strict, enforced rules on drainage, floodplains, fire and safety, since those protect life and are not the same as use zoning.

The case in brief

1. Houston, the largest American city without conventional zoning, rejected zoning by referendum in 1948, 1962 and 1993.
2. Neighborhoods are protected by private deed restrictions, which are contracts among owners, and by building, fire and floodplain codes.
3. Houston cut its minimum lot size in 1998, and its ability to build lets home prices stay far below those of coastal metros, as the census and market data show.
4. The flooding objection confuses land use with drainage. Houston tightened its floodplain rules after Harvey, and zoned cities flood too.
5. The lesson for other cities is to let people build, protect neighbors through contract and nuisance law, and keep real safety rules strict.

What you can do: look up your own city's minimum lot size and parking requirements in its zoning code, and ask a council member to explain why they are what they are.