Housing and zoning
“Overly restrictive local zoning is the fundamental cause of America’s housing shortage,” according to the Mercatus Center at George Mason University. “Cities and counties have employed their state-delegated zoning power to outlaw certain housing types or to impose costly mandates on builders for land or parking,” they write. By limiting the quantity and type of housing that can be built, these regulations restrict supply, which drives prices up.
Property rights
In addition to their impact on housing affordability, some argue that zoning laws represent a restriction on property rights. The Institute for Justice argues that “For more than a century, the freedom to use property has been eroded through abusive zoning practices that disregard individual liberty and emphasize top-down planning over property rights. Those property rights have been further denigrated by the courts, where property owners have found little comfort from all but the most abusive zoning practices.”
Externalities
Last week, the courts denigrated the property rights of Minneapolis landlord Hamoudi Sabri. “[I]n July this year,” the Sahan Journal reports, troubled by homelessness in the city:
Sabri decided “enough is enough,” and welcomed homeless people to set up camp on his property on 2716 E. Lake Street, beside Universal Academy Charter School.
On September 15, KSTP reports:
…at around 10 p.m., an officer working off-duty at a Target store near 28th Avenue South and East Lake Street was approached by people running into the store, reporting gunfire.
The officer left the store and heard gunfire coming from the area of an encampment nearby.
It was Mr. Sabri’s encampment, the one next to the school.
Officials say that seven people in total were shot:
Three women and one man were brought to Hennepin Healthcare
One man walked into Children’s Hospital and was later brought to Hennepin Healthcare
One woman walked into Abbott Northwestern Hospital
One man later arrived at Regions Hospital
One of those shot, Jacinda Oakgrove, 30, died in hospital four days later. A judge has now barred Mr. Sabri from allowing homeless encampments on any of his Minneapolis properties indefinitely.
“Externalities” occur when someone undertakes an action, some portion of the costs or benefits of which accrue to some other person or persons. An example I’ve given before is that while cranking “The Nile Song” all the way to 11 at 3am might be my idea of fun, my neighbors might not agree. In this case, I am imposing a negative externality upon them, unless they’re big Pink Floyd fans, in which case it’s a positive externality.
It would be hard to argue that Mr. Sabri’s decision to turn his property into a homeless encampment didn’t impose some significant negative externalities on the people living and working nearby. One could argue that their property rights were being denigrated.
The events at Mr. Sabri’s property are extreme, to be sure, but more mundane examples abound. My wife, to give one, is a keen gardener and is in several Facebook groups on the subject. In one, recently, a resident of a house built in 1880 and in which she has lived since 2003 asked for advice on what to do since a four-story apartment block was built overlooking her back yard in 2023 which had blocked the sunlight almost completely and killed all her plants. The owner of the neighboring parcel had exercised his or her property rights, and in doing so had imposed a reasonably significant negative externality on this homeowner.
In such cases, there needs to be both some way of adjudicating when someone’s exercise of their property rights is impinging on that of others too much and of enforcing that. Zoning laws, however imperfect, are part of that process. No doubt many are onerous, have exactly the impacts on house prices that the Mercatus Center suggest, and need to go. But, at the same time, few would argue that an individual should be able to turn their property into a homeless encampment whenever they feel like it. There are some limits to what property rights allow us to do with that property. The balance is somewhere in the middle.
