The surprising benefits of ‘zoning lite’ in Houston

The city of Houston, as you may have heard, doesn’t have zoning.

It does have a bunch of land-use rules. There are neighborhood deed restrictions — enforced by the city — that keep shops and offices from popping up on residential blocks. There are also minimum-parking and lot-size requirements that shape development, historic districts, setback restrictions and other rules.

In 2011, after residents of a wealthy neighborhood near Rice University protested plans for a 21-story apartment building, the Houston City Council even approved an ordinance that provides for “major activity areas” where high-density development is encouraged and “buffer areas” that protect residential neighborhoods from high rises.

Together, this amounts to what Matthew Festa, a professor at the South Texas College of Law in Houston, has been calling “de facto zoning.” Yes, Houston has land-use rules, but they’re far less restrictive than in most other U.S. cities, especially cities along the Atlantic and Pacific Coasts.

The Wharton Residential Land Use Regulatory Index, devised a decade ago, ranked greater Houston as one of the least restrictive metropolitan areas in the country — and that includes some of the city’s suburbs that have quite strict zoning rules. If you want to put up a big new building on a commercial property in Houston, or townhouses on a single-family plot, you can generally count on getting permission.

For decades, Houston’s zoning-lite approach, while celebrated by the occasional libertarian law professor, was mainly a source of head-scratching and even derision outside the city. Lately, though, zoning regulations have been coming under fire for restricting economic growth, exacerbating income segregation and causing an outright housing crisis in the San Francisco Bay Area.

Houstonians seem to understand a basic economic truth that many people in other cities have a remarkable amount of trouble getting their heads around — that allowing more housing to be built makes housing more affordable.

And while boom times over the past few years drove Houston real estate prices up and pushed the area down in national housing-affordability rankings, prices in the Houston area are still cheap relative to most of the big cities of the East and West Coast. And they’re likely to get cheaper with housing developments that were started during the boom being completed at the same time as the most important driver of the local economy — the oil and gas industry — struggles.

Most of Houston’s new housing construction over the decades has been on the city’s edges, in suburban towns and in newly annexed areas. There are big environmental costs to this sprawl, both because Houstonians use lots of energy to fuel their big automobiles and cool their big houses and because paving over and subdividing the area’s flat, boggy terrain has exacerbated local flooding problems. It’s not clear, though, how stricter zoning would have done anything to address these problems, as just about every U.S. city that has come of age since the rise of the automobile has followed growth patterns similar to Houston’s.

And lately, as growth patterns have begun to shift at least a little bit away from sprawl, with demand on the rise for housing in walkable, close-in neighborhoods, Houston’s zoning-lite approach has actually been looking pretty good.

Houston-area developers have been putting up apartments at an impressive pace. Apart from city subsidies for development in the downtown proper, the move toward denser housing seems to be market driven — although abetted by public investments in transit and in parks.

Here’s how Christof Spieler, a structural engineer and member of the board of the regional public transportation authority, described Houston’s approach to me: “Because we don’t have the level of land-use regulations that other places have, the public sector is focused more on the public realm. That actually seems like a pretty rational way to divide responsibilities.”

Yes, it does, actually. The general American tendency to strictly limit what landowners in cities and suburbs are allowed to do with their property is really odd, when you think about it. It’s worth considering some alternatives.

Bloomberg View columnist Justin Fox writes about business.