Excellent post from Maxwell Tabarrok at Maximum Progress:
In 75 percent or more of the residential area of most large American cities it is illegal to build anything other than a detached single-family home. 95.8 percent of all residential land in California is zoned single-family, which is 30 percent of all land in the state. Restrictive design laws like these could reduce GDP per capita in the US by 8–36%. That could be tens of thousands of dollars per person.
The legal authority behind all of these zoning laws comes from a 1926 Supreme Court decision Village of Euclid v. Ambler Realty Co. Ambler realty owns 68 acres in the town of Euclid, Ohio. The town, seeking to avoid influence, immigration and industry from nearby Cleveland, passed an ordinance prohibiting Ambler realty from building anything but single-family homes on its lot, although they weren’t trying to build anything at the time. guilty.
Ambler realty and their attorney (a prominent Georgist!) argued that since this zoning ordinance severely limited the potential use and value of their property, imposing this ordinance on them without compensation was unconstitutional.
The constitutional claims in this case concern the 14th and 5th amendments. The 5th Amendment to the United States Constitution states, among other things, that “personal property [shall not] taken for public use, without compensation only.” The section of the 14th Amendment related to this case only applies on the 5th to state and local governments.
The local judge in the case, which found in Ambler’s favor (overturned by the Supreme Court), understood exactly what was going on:
The plain truth is that the true purpose of the said ordinance is to place all property in the undeveloped 16 square miles of the jacket. The real objective is to control the way of life that people are likely to live hereafter. In the final analysis, the result to be achieved is to divide people into classes and divide them according to their income or according to their status in life… Besides contributing to these results and perpetuating that class tendency, this law has an aesthetic purpose; that is, to make this town develop into a town along the lines now found by the local council to make it beautiful and beautiful.
Note that overturning Euclid v. Ambler will not make zoning in the interests of health and safety unconstitutional. Indeed, it would not make any zoning unconstitutional unless it meant that zoning above and beyond what is necessary for health and safety would require compensation from property owners.
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