A Story of Zoning Part 2: A Look at The Bay

In the last issue, we explored the general motivations for zoning laws and briefly surveyed their history. It was established that, at their core, zoning laws are examples of existing citizens utilizing local government fiat to advantage themselves at the expense of those not yet in the municipality. This is not merely an abstract narrative, however. The Bay Area is notorious for its zoning laws; they are among the most restrictive in the United States. By examining the city of Los Altos, we can observe how zoning laws have been used to maintain a very particular type of city. It is social engineering at a local level.

We spent much time in part one describing how zoning laws help cities achieve strategic goals. What is Los Altos’ goal? You could comb through city ordinances and make a subjective claim about their intents, or simply check the city website, where Los Altos prominently displays its purpose. The “mission of our city…is to foster and maintain the City of Los Altos as a great place to live and raise a family.”

It’s a welcomingly idyllic thought, but it has serious side effects. What makes a city a great place to raise a family? Do dense rows of cheap apartments or homes sound particularly appealing to a high-income family looking for a place to live? Now, contrast this image with the prospect of widely spaced homes with lush parks and golf courses. Well funded schools overflowing with help from parents free to volunteer because their spouse already earns enough. Homes with perpetually high equity. No crowding or traffic or bustling city center. These outcomes would probably not arise permanently in a lightly regulated housing market. To meet its strategic goal of making a city a good place to raise a family, the Los Altos city government must engineer a situation that deviates from a natural market outcome. It uses an extremely powerful tool to do the job: the zoning code.

The specifics of Los Altos’ zoning laws cannot simply viewed as an archaic set of limits; they tell a story about how a city made a conscious choice to create a specific environment at the expense of certain people who do not fit into this notion of an ideal town. The smallest lot size any single-family home in Los Altos can occupy is 10,000 square feet. Apartment complexes can only have one unit per 1,800 square feet and they must be two stories tall. But here’s the catch: if an apartment is located within a hundred feet of a single-family area, it can only be one story high. The city must of course look pretty and pesky apartment complexes cannot be permitted to blight the neighborhood.

What possible city service can these severe restrictions improve? How can a city run more efficiently if an apartment complex cannot exceed one story near a single-family area? All of these restrictions limit the responsiveness of the housing supply to changes in demand. Artificially restricted supply increases prices, making it difficult for those with average incomes to move into Los Altos. Cities are not independent political entities; they are part of a wider political nexus and this blatant form of social engineering, especially on the scale present in Los Altos, should have a small or nonexistent place in a society that places a premium on eliminating income inequality.

It can be difficult to muster outrage at these laws when their result is so aesthetically appealing. The image below is a Google Earth image of a street near Los Altos High School Notice the wide spacing between the homes and the lush green area between lots. This image captures the appeal of zoning regulations far more effectively than any textual evidence can. Some of us may even live in neighborhoods like this. These laws help evoke the idealized version of the American dream in places like Los Altos. That is, for those who can access this.

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A typical street in Los Altos.
If the motivation for these laws is worrying, the effects they are frightening. According to the U.S. Census Bureau, only 11% of housing structures are multi-unit, compared to 31% in California. The median household value is $1 million, compared to $0.42 million statewide. Only 1.7% of the population is below the poverty level. We must be careful not to confuse those who reside in multi-unit housing with those who earn low or even average incomes. If an individual made only a modest amount of money per year and wanted to find an apartment in Los Altos, he would be disappointed: 85% of apartments have rents above $1,500 compared to just 30% statewide. These statistics paint a bleak picture. A $1 million home that is unaffordable due to free-market forces is very different from a $1 million home that is unaffordable because government fiat made it so. This is not a partisan issue: using government to price people out of an area to make an area more attractive is unethical. We cannot control people’s desires, nor should we try, but allowing government to carry those plans is a dangerous misuse of power.
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