1. The Neighborhood Veto
And Its Discontents

2. The Issue
Neighborhoods have effective veto power over rezonings near them.
When a rezoning is proposed, neighbors of the affected property get notice
City governments have incentives to favor neighborhood input over property rights or citywide interests: landowners proposing rezoning may have one (or zero) votes, while neighbors may have many

3. Two problems with neighborhood veto
1. Housing supply and affordability – neighborhood veto means city cannot easily rezone land to add more housing, which means housing supply permanently stunted, which means higher rents
2. Sprawl- neighborhood veto artificially reduces housing density, causing automobile-dependent development, causing more greenhouse gas emissions

4. Housing supply
Neighbors have incentives to oppose any rezoning that adds new housing. They suffer 100 percent of any negative externalities from new apts or houses, but because housing markets are citywide they may benefit only slightly from reduced rents, or suffer from lower property values if they are homeowners.
Less rezoning= lower housing supply= higher rents

5. Housing supply vs. housing costs
% post-2000 change in housing supply median monthly rent
Austin
Las Vegas
Orlando
Houston
Phoenix
NYC
Los Angeles
Boston
San Francisco

6. Counterarguments
“If we zone for more houses land costs will rise”- but landowners can compensate by adding more housing units
“If we have more houses/apts they will only be for rich people”- but they still might lower costs of older apts

7. Neighborhood Veto Reduces Density – What’s wrong with that?
Neighborhood veto= less density, as new housing shifted to undeveloped areas where there are fewer neighbors to object
In thinly populated places very few people can live within walking distance of anything. Example: public transit use minimal in places with under 7-10 housing units per acre because few can walk to bus stop.
More driving = more greenhouse gas emissions
Car-dependent low-density= less mobility for nondrivers

8. Other defenses of neighborhood veto
Mostly “beggar thy neighbor” arguments- shifts problem elsewhere rather than reducing it
For example:
traffic- if new residents don’t create traffic in YOUR neighborhood they will create it wherever they move
Community character- again, new residents will change community character wherever they move

9. Solutions: radical or moderate?
Radical- all housing shall be treated equally. No more density limits.
Moderate- pay off neighborhoods to support less restrictive zoning
In between- similar to radical but only in certain areas