Thursday, August 11, 2016

What can Nashville learn from Palo Alto?

How not to use zoning policy.

In the past 15 years, increases in demand combined with restrictive zoning policies that prevent new supply have caused the median price of a  house in Palo Alto to increase four-fold, to $2.5 million.
At root, the failure of wealthy coastal areas like Palo Alto to address their housing shortages may be a symptom of broader cultural illness—in particular, the tendency of elites to prioritize their own enrichment at the expense of the public interest, and the decline in appreciation for the importance of community, and the young and middle-class families that are required to sustain it. Public policy can’t directly treat this disease. But it can treat the symptoms. And a modest shift in the state-local balance of power for setting land use regulations may be the best medicine for the short term.

Jerry Brown, who famously vetoed zoning mandates in the past, may have his eyes on something similar at the state level:
California Governor Jerry Brown, to his great credit, is pushing legislation that would “sidestep the endless layers of local approvals that bog down badly needed housing construction,” according to the San Francisco Chronicle.
UPDATE:  Palo Alto Planning Commission member resigns to protest no-growth zoning plans:

The people who bought their homes a long time ago lucked into a windfall and they resentfully lash out at anyone trying to cut in on that windfall. But notice how un-American these claims are. The current residents want to protect their gains by telling other people how they can use their property. When a new restaurant starts to take patrons from an old restaurant we generally don’t think that the old restaurant–the long-term resident–has the right to prevent the new restaurant from opening. The same is true, by and large, for new technologies and ways of doing business. Yet when it comes to residential land we give the old residents a veto on the new.


  1. I live in a neighborhood where older homes are continuously being bought up by investors and builders who then tear down the old home and construct two "shotgun style" homes on the single lot. From the large amount of "zoning hearing" notices I get in the mail, I presume that builders are able to put the two houses on the single lot due to local zoning practices being "lenient". That being said, my neighborhood is able maintain a relatively high supply, therefore keeping housing prices in my neighborhood from significantly increasing as the housing demand increases.

  2. I forgot to mention that my neighborhood is in Nashville.