Yes, Virgina, zoning causes higher housing prices

Zoning reform alone isn’t the solution to Hawaii’s housing affordability crisis, but it would be a step in the right direction, Grassroot Institute of Hawaii policy researcher Jonathan Helton told H. Hawaii Media radio host Johnny Miro this past Sunday, Dec. 4. 2022.

Helton discussed with Miro how more than 100 years of land-use regulation has restricted community growth and increased housing costs, not just in Hawaii but nationwide.

He referenced the new book on zoning, Arbitrary Lines: How Zoning Broke the American City and How To Fix It,” by M. Nolan Gray, whom Joe Kent, executive vice president of the Grassroot Institute, interviewed two weeks ago on ThinkTech Hawaii.  

Helton explained that when zoning was first implemented in New York City in 1916, followed closely by Berkeley, California, “a lot of people were moving to cities, so they wanted to try to manage growth in a reasonable pattern.” 

Hawaii’s first zoning rulers similarly were adopted in the early 1900s, in Honolulu. The 1922 code mainly addressed building height to prevent the spread of fire and was just 17 pages long. Now, Oahu’s zoning ordinance clocks in at hundreds of pages, so “you see how much the zoning regulations have grown.”

At the same time, more zoning has led to higher home prices.

For example, he said, “If you can only build a single-family home on a piece of land, it requires relatively more land to build the same amount of homes,” he said. “That’s going to drive up the price of buying a home.” 

Additionally, restricting housing options such as duplexes, triplexes and apartments creates less dense neighborhoods, which also drives up costs by limiting the amount of housing available, Helton said. 

That’s why the Grassroot Institute has been recommending that Hawaii’s zoning laws be streamlined to allow more multi-unit housing and mixed-use development such as neighborhood markets, Helton said. 

“People who might benefit the most from zoning reforms are … people who really need affordable housing but can’t afford to buy a single-family home,” said Helton. “If we reform zoning to increase the stock of duplexes, triplexes, fourplexes, lower-rise apartments, etc., it’s going to help those people.”

To hear the entire interview, click on the video below. A complete transcript follows.

12-4-2022 Jonathan Helton interviewed by Johnny Miro on H. Hawaii Media 

Johnny Miro: Good Sunday morning to you. I’m Johnny Miro. Once again, it’s time for public access programming here in our six H. Hawaii Media family of radio stations on the island of Oahu: 101.1 FM, 101.5 FM, 103.9 FM, 107.5 FM, 97.1 FM and 96.7 FM.

And joining me once again will be the policy researcher at Grassroot Institute of Hawaii, Jonathan Helton. 

He joined us a few weeks ago, and now we’re going to be delving into something that we’ve talked about before: housing. 

A little bit of a different angle with this particular discussion. It’s on zoning and a recent teleconference they had at Grassroot Institute. 

Jonathan, good morning to you, and happy Sunday.

Jonathan Helton: Good morning. Happy Sunday to you as well, Johnny. Thanks for having me.

Miro: Yeah, so we recently had a discussion about zoning and what California is doing, maybe some other states, and maybe even doing away with it to bring more housing into communities and more affordable housing. 

Can you tell me a little bit about what zoning is?

Helton: Zoning is — the simplest way to explain it: Zoning is a type of land-use regulation. 

It regulates two things. It regulates how a parcel of land can be used and how dense the use can be. 

So, for example, if you’re going to build in a Residential 2 district, that’s residential, so you could maybe build a single-family home, and then — so that would be the use — and then zoning also regulates the density. 

It says, “Alright, so is there a minimum lot size? How big can this house be? How much land do you need to build a house that’s a certain size?” So it regulates uses and densities. 

And, you know, zoning breaks up cities into different zones. So, industrial, commercial, residential. 

Here on Oahu, you have country zones and agricultural zones as well. You’ve got zones for resorts, and you have zones sometimes for public utilities as well. 

And all of that varies by county.

Miro: How far does this go back — what was the first city to actually use zoning?

Helton: Zoning goes back about 100 years. Some of the first cities to use this were New York City; Berkeley, California. 

And the people who created zoning really saw it as a way to manage urban growth. 

Because, you know, just after the turn of the century — you know, 1916, I think, is when New York City implemented zoning — and a lot of people were moving to cities, so they wanted to try to manage growth in a reasonable pattern.

But, unfortunately, mixed in there with managing growth, sometimes zoning had, like, a segregationist undertone. 

Sometimes people tried to sell zoning laws based on the fact that they would keep out people of certain ethnicities or races or people who were of different income brackets.

Miro: Yeah, you’re starting to hear a little bit more and more about that. I believe that was part of the discussion that was brought forward. 

What was the gentleman’s name that Joe [Kent] recently talked to, Joe from the Grassroot Institute of Hawaii?

Helton: Yeah, Joe spoke to M. Nolan Gray, and he’s a former city planner in New York City. 

Right now, he’s working out in California. He’s getting a Ph.D., and he’s working with some groups that are dedicated to try to reform California’s housing policies because they have a very similar problem to what we have here in Hawaii: very high housing prices.

Miro: We might have touched on it, but I guess we can elaborate a little bit more on how zoning actually works.

Helton: Yes, and I’ll, you know, I’ll add two things to that: Zoning really has two main pieces. 

The first thing you have is you have a zoning map. And a zoning map is a map, and it has every parcel in the county, and every parcel will be given a number and/or a letter. 

For example, as I mentioned earlier, maybe you have a Residential 2 zone that says the R for residential. You might have C for commercial. 

You’ve got that map. And then, in addition to the map, you have a land-use ordinance. 

The land-use ordinance, it — what it really does is, it says, “Alright. In an R2 zone, in a C1 zone, here’s what you can do. Your building has to — your building can’t be taller than two stories. You know, it has to have a certain number of fire sprinklers, etc.” 

So for each zone in the county, you have, of course — and it has its title, and that title corresponds to something in the land-use ordinance that regulates its use and its density.

Miro: Alright. So who gets to determine what piece of land belongs in what zone?

Helton: That’s usually determined at the county level. 

So, you have the County Council be the one who ultimately passes the zoning map and the land-use ordinance. 

Usually, counties seek input from the community, from the departments on this as well. So, usually, it’s a collaborative effort. But ultimately, it’s the Council’s decision.

Miro: OK. We’re talking with Jonathan Helton, policy researcher at Grassroot Institute of Hawaii. 

It’s grassrootinstitute.org for information and some of the policy papers and some of the research that’s being done over there. 

Alright, Jonathan. So when did Hawaii actually start using zoning?

Helton: Hawaii hopped on the zoning train shortly after New York City and Berkeley did. 

The first zoning ordinance passed in the state was passed in Honolulu in 1922, and this ordinance — a lot of it had to deal with height restrictions. 

There was a lot of concern about, you know, “What happens if a fire breaks out? We don’t want the fire to spread super rapidly throughout the city.” 

And this zoning ordinance was 17 pages long; which, you know, that’s — you can’t read that, you know, in just in a minute. It would take a little bit of time. 

But by comparison, the current land-use ordinance for Honolulu is over 400 pages long. So, you know, a century later, you see how much the zoning regulations have grown.

Miro: Yeah. What about the Hawaii Land Use Commission, Jonathan? 

Does the LUC zone lands, or does it do something else?

Helton: That’s a very good question. Because a lot of times, people get the Land Use Commission and zoning confused. And it is easy to get them confused. 

So the Land Use Commission is a state-level agency. So that’s one of the big differences: It’s not a county-level government agency. 

The LUC was created in 1961. And so what it does, whereas zoning regulates land at the county level, the LUC regulates land at the state level. And it doesn’t really zone land, but it does place them into four designations. 

So it puts them in either urban land, rural land, conservation or agriculture. So all land throughout the state is in one of those designations. 

And then you have, the county will come in, and the county would zone the land within those LUC designations. 

And so most of the development — most of the businesses, industries, residential development that takes place in the state of Hawaii — takes place in these urban designations.

Miro: Alright. So some people say that these zoning laws, they — it drives up the price of housing. 

Is that true? And if so, why?

Helton: I would say it is generally true, and this is one of the big critiques of zoning laws that were written half a century ago and that haven’t been updated today. 

In the 1960s and 1970s, you had a lot of federal incentives for people to take out mortgages to buy a home, so you saw a lot of people buying single-family homes. 

But zoning codes were also written with single-family homes kind of in mind. So throughout the country, and in Hawaii, [in] most cities and counties and residential zones, a single-family home is the only thing you can build. 

And that’s not necessarily bad. But in major cities, that can become a real problem. 

So zoning increases the price of housing, really, in three ways. 

First, it limits the number of things you can build. 

Because if you can only build a single-family home on a piece of land, it requires relatively more land to build the same amount of homes. And so that’s going to drive up the price of buying a home, because the price of land is one of the major components when you’re buying a home. 

The second way zoning drives the price is it limits what can be built. 

So if you have a zoning code that says you can only build single-family homes in this district, that’s — there’s no duplexes, no triplexes. And so, because it creates really these less dense neighborhoods, you have less housing.

And the final way: A lot of times people will try to get a variance for zoning, which is when they ask the county, “Hey, you know, I’ve got this property. It’s zoned Commercial 2, but I want to build something that’s not allowed in a Commercial 2 zone.” 

So they would apply to the County Council, or they’d apply to the relevant department, and they could try to get a variance. A variance might be good for them in that specific instance, but a variance takes up a lot of time. Well, it takes up a lot of their time, it takes up a lot of the county’s time. 

So that delay also contributes to higher overall housing prices.

Miro: Jonathan, tell me a little bit more about the minimum lot sizes. And why is it bad that each house have a, you know, a backyard?

Helton: Yeah, that’s a good question. 

Because, you know, you have a single-family home, you know, kind of the ideal American home — maybe not so much in Hawaii, but across the country — then you’ve got a home with a white picket fence, you’ve got a backyard. 

Minimum lot sizes essentially say, “If you’re going to build a home in this zone, it has to be built on a parcel of land that is yea big.” 

So, I’ll give you a real-world example: In Honolulu, the R5 zone or the, excuse me, the R3.5 zone, you can build a duplex or a single-family home on a parcel of land that is 3,500 square feet.

There are several of these requirements that really limit the density of housing. So you have R3.5 zones, you have R5 zones, and it keeps getting bigger. 

And minimum lot sizes, you know, you do have a backyard — which some homeowners might want to purchase a house that has a backyard — but you have to understand the downside of having that yard there. 

That yard represents land that you could have maybe put another house on. 

And so that limits the supply of housing, which, from basic economics, we know also increases the price of housing as well.

Miro: This kind of sounds like the problem isn’t zoning, but it’s single-family homes. 

Do you kind of think counties should ban single-family homes? I mean [laughs], that sounds like the problem. 

Helton: I wouldn’t go that far…

Miro: Oh yeah. [Laughs]

Helton: For sure. 

I think that part of the problem with zoning is single-family homes. And it’s not so much single-family homes themselves, but it’s that zoning codes are written so that’s really all you can build in a lot of zones. 

So I wouldn’t say that counties should prohibit the construction of single-family homes. 

I would just suggest that counties should look at allowing other types of denser housing — maybe duplexes, triplexes, maybe allow more low-rise apartments in certain zones. 

So that if someone wants to buy a single-family home, those homes would be available. But, if they can’t afford one — which, you know, a lot of people can’t in Hawaii because you have so astronomically high housing prices — but sometimes if someone could get an apartment, someone could get a duplex, that might be cheaper, and that might be all they can afford. 

So if you have zoning codes that are written that prohibit those types of housing, it really causes a problem.

Miro: I’m talking with Jonathan Helton from the Grassroot Institute of Hawaii. 

Grassroot Institute of Hawaii, it’s grassrootinstitute.org, for all of the policy papers and the, just the general information that they bring forward. It’s pretty much on a weekly basis. 

And does zoning cause any other problems? Does it, say, like, harm the environment in any way?

Helton: Yes, I think zoning does harm the environment. 

And the main reason it does that is zoning — again, going back to single-family homes — so the zoning codes written in favor of single-family homes, that creates urban sprawl. 

You need more land, relatively speaking, to build the same amount of housing. So what does that mean? That means people end up building out. The city expands. 

And that creates two big problems.

The first problem is that if you have a large amount of urban sprawl, people have to commute to work. 

And so, you know, that does a couple of things. That — first of all, it raises the amount of emissions that cars emit because you’re having to drive further. It may also make commuting more dangerous. Because if you have to drive, you know, 45 minutes, that’s a higher risk as opposed to 15 minutes or if you could even walk to work.

And the second way zoning harms the environment, I would say, is this: If you’re using land to build housing, that’s land that you can’t use for something else. 

So I realize, here in Hawaii, a lot of people are talking about wanting to conserve land, wanting to grow crops on agricultural land, and zoning might contribute to some of these problems. 

Because if you’re using land to build a house and you’ve got the land as a backyard, well, if you instead had built denser housing there, you could have saved more land for conservation purposes.

Miro: Now, let’s go back to this Berkeley, California, topic you brought up earlier — what started over there in Berkeley, California. 

Now, you mentioned that zoning might have had some segregationist history. Now, is that correct?

Helton: Yes. As I mentioned, in Berkeley, California, one of the major marketing tools to get them to pass zoning, some people said, “Well, we can keep Chinese laundries out of certain districts.” 

There was a segment of the population at the time that was very anti-Chinese, very anti-Asian, and that marketing tactic appealed to them, unfortunately.

Miro: Are there any other cities that are without zoning? 

It doesn’t seem possible these days. It seems like every city wants to have some type of zoning. 

What do those cities do to manage land use then?

Helton: Houston, Texas, does not have zoning, and if you Google “Houston without zoning,” you get some bizarre pictures

You get a picture of a single-family home right beside a roller coaster. And so that’s been a critique of Houston, is, “Well, they don’t have zoning, so their development is chaotic.” 

Well, there’s a couple of things to understand here. The first thing is that zoning is one of almost a dozen tools that cities use to do urban planning. You talk about street grids, you talk about neighborhood plans, things like neighborhood covenants, which I’ll explain in a minute. 

So Houston doesn’t have zoning, but it does have planning. And so, you do get those strange Google images if you Google “Houston without zoning.” 

But, on the other hand, Houston has relatively affordable housing, given that it’s one of the largest cities in the country. So there are upsides to not having such stringent land-use requirements as zoning often imposes.

Now, what I wanted to circle back to: Neighborhood covenants are, they’re not unique to Houston, but they’re pretty big in Houston. What these are is, these are legally enforced agreements

So if you live in a certain neighborhood and someone sells a house in that neighborhood, someone who comes in to buy that house, they have to sign the covenant. The covenant essentially says, “Hey, you know, you can’t tear down your house and build a gas station or build a skyscraper in this neighborhood.”

So what it does is it takes land use, and if people want to have a neighborhood that’s just single-family homes, they can do that. But that’s governed at the neighborhood level, as opposed to being governed at the city level by zoning.

Miro: Sounds like a gentleman’s agreement. That’s not the case — this is actually done through the city, say, of Houston. 

Because, how often, do you know, has something like that been broken and not been followed through by the letter of what they agreed upon?

Helton: Those neighborhood covenants are legally enforceable. 

In some areas of the country, I believe, these covenants are gentlemen’s agreements. 

But in Houston, Houston has agreed, “Alright, if you want to have this neighborhood be dedicated to a particular type of housing, if you sign a covenant, then we’re going to legally enforce that.” 

So you could take action against someone who’s violated the terms of that covenant.

Miro: Jonathan Helton from Grassroot Institute of Hawaii, and they recently had a guest on, we just talked about it, ThinkTech. 

Nolan Gray — very interesting topic, he brought up the book about zoning. Can you tell me a little bit about that book?

Helton: Yes. The book covers a lot of the topics that we’ve been covering this morning, and it’s called Arbitrary Lines: How Zoning Broke the American City and How To Fix It.” 

I’ve got a copy sitting right here in front of me — very interesting read. 

He advocates for completely abolishing zoning. I don’t know that that’s something that’s politically feasible, number one. 

And I think that, you know, there would be a lot of pushback to that, which I understand.

Zoning is understood as, you know, a fundamental bedrock of the 21st-century city. But it is very interesting to get a perspective that says, “Well, maybe that’s not true.” 

And so, Nolan’s book definitely gives that perspective.

Miro: He said something along the lines of “Zoning isn’t planning.” 

What did he mean by that?

Helton: That’s what Nolan told Joe on our ThinkTech show the other week. 

And so, he — I think what he meant was this: One of his critiques of zoning is that zoning is often reactive. 

A lot of city planners’ time is consumed with either updating zoning, settling disputes over zoning, granting people variances from zoning because they want to change what they can do with their property.

So [when] he said zoning isn’t planning, I think that he meant that real planning focuses on a couple of things. It focuses on basics, like street grids or providing water infrastructure, and it also focuses on regulating nuisances. 

You know, no one wants [an] industrial plant in the middle of a neighborhood, and some people are afraid that if we change the zoning too much, that’s what you get. 

But there’s other ways to regulate that use — that nuisance, in this case — than zoning.

You can have a requirement on the nuisance that says, for example, all oil refineries have to be two miles away from residential development. So if you’re going to build an oil refinery somewhere, it has to be set back from residential development. 

Now, that’s not zoning. Because what that is, that’s regulating the actual nuisance, as opposed to regulating the land that the nuisance could be built on. A very subtle difference there.

Miro: So, you’re saying the word “nuisance.” I think people need to remind that — nuisance. 

And what’s the name of Nolan Gray’s book again? Can you remind listeners?

Helton: Yes. The book is entitled “Arbitrary Lines: How Zoning Broke the American City and How To Fix It.”

Miro: OK. “Arbitrary Lines: How Zoning Broke the American City and How To Fix It.” 

Arbitrary Lines. Look that up from Nolan Gray if you’re interested in the topic and want to delve into it more. 

So what kind of response did you get from Nolan Gray’s interview on ThinkTech, and did many people agree with him that zoning should be abolished?

Helton: Yeah, well, I would say yes and no. We got some very — there were very mixed responses. 

Some people were interested in wholesale abolishing zoning. 

Many people who wrote us expressed doubt, you know, which is very understandable, given how common zoning is. 

And a lot of people, however, did express the fact that, you know, maybe there are ways to streamline zoning. 

And I think, at the Grassroot Institute, we would be advocating for ways to streamline zoning. I’ve mentioned a couple.

You know, allow more duplexes in certain areas. Allow more triplexes. Allow more mixed-use development. 

I’ll give you an example: In a lot of cities, you know, before zoning became so restrictive, it would be very common, you’d have a neighborhood market, you know, down on the corner. And so you could walk down to the neighborhood market, get something real quick if you needed.

But if you have restrictive zoning codes in place, in a residential district, you’re not going to be allowed to build a gas station or build a neighborhood market, because that’s going to be considered commercial. 

So things like this could really change zoning for the better. And, you know, that’s really what we’re interested in working on.

Miro: Alright. Now, if cities don’t want to abolish zoning, what can they do to make it better? 

I mean, how can zoning be changed to allow more affordable housing? That’s — because that’s the goal here.

Helton: Yes, I mean, that really is the goal. And so more multi-family housing, as I mentioned. 

I think in some places, you could allow taller buildings. I realize that has been a very sore spot downtown, as to some buildings that people believe are too high or that broke zoning codes. But maybe in some places, you could have a little bit taller buildings. 

I think, you know, allowing mixed-use, allowing neighborhood markets to be built in certain neighborhoods, would be good.

And there’s one thing that Minneapolis, Minnesota, has tried, which is abolishing parking requirements. So, for example, if you’re going to build a business or if you’re going to build some sort of building that businesses can rent from, maybe you don’t have parking requirements. 

And parking requirements can lead to increased costs because, if you have to build a parking garage inside your business, obviously that’s [going to] substantially increase cost. And so in cities that do have mass transit, you don’t actually have to build that parking garage there.

And so what Minneapolis did is they got rid of that requirement. So that saves people — let’s say people who are building these businesses — it saves them a good bit of money.

Miro: Just to throw a little wrench into that, now we have the city here putting a lot of requirements in for EV chargers. How will that affect things?

Helton: Yes. Well, you know, we could talk about electric vehicles. That’s sort of a different topic as to the pros and cons there. 

One thing is, I mean, very clear: If you require an EV charging station, whatever the benefits of that might be, that is going to increase costs.

Miro: OK, OK. Because I kind of tied that into the parking, because…

Helton: Yeah.

Miro: Yeah, yeah, OK. 

So if cities that try to change the, you know, the zoning laws, what are the primary — who’s opposed to this? Who are the primary opponents?

Helton: Normally the people who will oppose zoning [are] maybe people in certain neighborhoods who don’t want to see the neighborhood change too much. They want to see the neighborhood remain the same. 

So they are, that’s, that is then — those have been people who have come out against zoning changes in the past. I think covenants like the legally enforceable covenants in Houston might be a way to make a compromise with these people.

If certain neighborhoods don’t want their neighborhood to change — they want the same type of housing there — well, then maybe we should allow them to have it. 

But maybe that could be at the neighborhood level, as opposed to being at the county level.

Miro: Alright. A few more questions for policy researcher at Grassroot Institute of Hawaii, Jonathan Helton. 

Jonathan, which people could benefit, OK, the most, from zoning reforms?

Helton: I think it’s what you said a minute ago, Johnny. I think that you said the goal is affordable housing. 

So the people who might benefit the most from zoning reforms are the people who don’t always have a voice in the normal political process. 

You know, the people who work two jobs; they don’t have time to research zoning policy; they don’t have time to come to the City Council meeting and testify. 

These people who really need affordable housing but can’t afford to buy a single-family home, for example.

If we reform zoning to increase the stock of duplexes, triplexes, fourplexes, lower-rise apartments, etc., it’s going to help those people. 

So the — you know, zoning won’t fix Hawaii’s affordability crisis. Zoning reform won’t fix it. But, you know, it’s a step in the right direction, along with other tools to help fix it.

Miro: Last question: Are any counties here locally trying to change their zoning codes?

Helton: Yes. Honolulu right now is going through the process of updating that, you know, over 400-page document land-use ordinance. 

They had a Bill 41 that would update it. That bill ran into some controversy. 

I think a lot of people were upset that they didn’t get a lot of public notice as to what the bill was going to change. And so right now, that bill’s on hold. It is a mixed bag. I think it does some good things; it does some bad things.

You know, but once the City Council decides to pick that bill up again and try to push forward with it, I think we’ll see a change. And, you know, we can analyze it then. 

So I just want to thank you for having me on here. And, I guess, if they remember one thing: What does zoning do? 

Zoning regulates use and density. And unfortunately, right now, zoning is written so that it often increases the price of housing.

Miro: And we have an incoming governor — I believe on the 5th [of January] — and so we’ll see if, what he does. 

It seems like he’s adamant about bringing affordable housing, as a lot of administrations — new-coming administrations — are initially. So we’ll see how that plays out. 

Alright, Jonathan. Thanks so much for spending some time with us once again. Mahalo, and enjoy the rest of your day.

Helton: Thank you. You, too.

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