Regulation isn’t always the answer: zoning in green cities

I’m not sure if you knew this about me, but I’m from New York City. Ask any of my friends, they will probably laugh and groan at how much I talk about how wonderful the place is.

For all the awesome things in New York there is a lot wrong with my hometown, but one thing stands out in particular.

In the words of Jimmy McMillan, the man with the greatest facial hair since Civil War general Ambrose E. Burnside rocked the sideburns/moustache connection, “The rent is too damn high.”

Now why is the rent too damn high?

Broadly speaking, there are two things that determine price: supply and demand. Demand for housing in New York is quite high, with good reason. It has some of the best restaurants, best cultural institutions, best nightlife and some of the most interesting characters you’ll meet anywhere.

It doesn’t hurt that the average wages are also pretty high compared to the national average. Demand is so high in my neighborhood that people are willing to pay about $2,000 a month for a studio apartment. In short, people want to live in New York.

But demand doesn’t tell the whole story — not even close. We must also look at supply. At first glance, housing supply in New York looks good. Skyscrapers define Manhattan, after all. A superficial look at the skyline belies a deep underlying problem plaguing the city, though.

The barriers to building new buildings or increasing housing density are enormous.

Developers must abide by zoning regulations that impose limitations on building height, density and usage. Even if they make a proposal that meets the restrictive zoning rules, they must still contend with NIMBY (Not In My Back Yard) neighborhood activists who seek to limit the growth of new development. In no small part because of these two factors, often working in tandem, building size and density are far lower than what they could be without them.

This isn’t to say that all zoning and NIMBY activism is bad, or that all developers are good — it isn’t and they aren’t. But the end result of their collective actions is that housing supply is artificially constrained, helping to drive prices into the stratosphere.

High rent isn’t just present in New York, though. It’s a reality for cities like New York all across the country. San Francisco and Washington D.C. are two cities where the cost of rent borders on ridiculous, but the supply of housing is severely restricted. Meanwhile in cities with little to no regulation, like Houston, housing is plentiful and prices are low.

The high prices of rent in cities like New York, San Francisco and D.C have profound consequences for not just these cities, but for the country as a whole. These three areas are also some of the greenest, least car-dependent areas in the country.

By restricting the number of housing units and thus driving up prices, they restrict access to their green lifestyles. As a result, people are forced to make the economically rational decision to either move to a more affordable suburb, or as is quite often the case, to move out of the expensive metropolitan region altogether.

Where they move is to decidedly not green areas, in large part because of their affordability.

Houston is a prime example of the brown city, as in a relatively environmentally unfriendly city, with affordable housing. Housing is relatively cheep in Houston because it is so plentiful, and it is plentiful because there are literally no zoning laws to restrict construction.

Now, no zoning is probably a little extreme. It has likely led to the enormous suburban sprawl that defines Houston. However, suburban sprawl cannot happen in a place like Manhattan. The result of deregulation in New York and in marginally dense, overly regulated, environmentally friendly cities across the country would be taller buildings, increased density, more housing and, ultimately, lower rent.

Lower rent means more people can afford the option of living in a green urban environment. Allowing market forces to create housing in green urban centers like New York is an ultimately desirable outcome, both for liberals who want Americans to adopt greener lifestyles and conservatives who enjoy letting the market do its thing.

Sometimes regulation is a good thing, and sometimes it’s a bad thing. Letting the market work its will sometimes leads to ugly situations, and restricting the market sometimes just makes things worse. Different cases require different solutions. In the case of these pricey urban centers, we could stand to use a little deregulation.

Peter is a junior. You can reach him at

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