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Source link: http://archive.mises.org/4819/zoning-is-theft/

Zoning is Theft

March 21, 2006 by

Zoning, writes Jim Fedako, is typically defined along the lines of a government-regulated system of land-usage imposed in order to ensure orderly development. Zoning is usually a component of the larger conceptual ideal called regional planning. Of course, planned development is really the name of the road toward planned chaos. Those who advocate zoning really believe that acting man does not have the ability to create communities that are functional and prosperous. FULL ARTICLE

{ 64 comments }

Paul Edwards March 23, 2006 at 5:37 pm

Tz,

You are free to define property as necessarily not subject to any covenant. However, that is not the usual view. And it’s not the libertarian view.

There is something about how the words “voluntary” and “coercive” come into play here, that I don’t think we’re seeing eye-to-eye on. You don’t have to buy property that is subject to a covenant, and no one is violating your rights by not selling to you unless you accept the conditions of the covenant. The covenant was created voluntarily in the first place to benefit the property owners who agreed to it. I don’t think that qualifies as evil or as any form of destruction of liberty.

I will just add here a few quotes from Walter Block in “PROPERTY AND FREEDOM: THE STORY OF HOW THROUGH THE CENTURIES PRIVATE OWNERSHIP HAS PROMOTED LIBERTY AND THE RULE OF LAW.” at http://mises.org/journals/qjae/pdf/qjae5_1_6.pdf

“The core fallacy is that ownership of property under such restrictive covenants is somehow coercive, as if people are forced against their will into making [such things as] condominium purchases…

“As long as I consent to be bound by such rules, there is nothing amiss, as far as private property is concerned….

“all such contracts must necessarily be mutually beneficial in the ex ante sense. Were they not expected to generate benefits, they would hardly be entered into in the first place.”
————-
In an interview with Randall G. Holcombe at http://mises.org/journals/aen/aen18_2_1.asp

“HOLCOMBE: A restrictive covenant is a contract among owners which allows them to guarantee that property will be used in a certain way. When I bought my house, along with it came a long list of regulations drawn up by the homeowners association. They aren’t government regulations; they are private and designed to keep property values high. These covenants are increasingly common and very efficient market means of insuring the quality of life. The key is that they are entered into voluntarily.”

Nick Bradley March 23, 2006 at 6:32 pm

So, the strongest case for zoning laws is as follows:

“who wants to buy a home where there could be a chemical plant built next door?”

The rebuttal to that argument is as follows:

In the absence of zoning laws, it is a CONSUMER’S CHOICE whether or not to acquire the legal protection that would prevent a chemical plant being built next door to your property.

So, how do you acquire such legal protection? By entering into a voluntary restrictive covenant agreement with surrounding property owners. As we all know, there are trade-offs in any economic transaction. In this case, you are barting a portion of your property rights in exchange for insurance against somebody building, for example, a chemical plant next door.

There you go — No zoning laws needed!

tz March 24, 2006 at 9:13 am

But you don’t own what you can’t dispose of as you see fit. That is my point, and the difference between a rented property and an owned one. Not only do you bind yourself, but all of your successors to the covenant.

You can’t transfer only half the ownership in something (i.e. you cannot alienate your right to own property). Lets say there is a disagreement between you and the person who you contracted with for use/ownership of the property, because you or one of your family members has a home-based business.

In order to resolve the question, a judge will have to determine who OWNs the property. Saying I own the property and then saying I can’t do something with it is a CONTRADICTION. Even if I voluntarily don’t do something with the property, I have no ability to bind anyone else or force a court to honor it, and since I will die one day, what happens if the successor doesn’t volunteer?

There will be a contract. It is either a bill of sale, in which case every restriction on what I can do with the property is nullified as it is contradictory to the idea of ownership, or it is a perpetual lease, in which case I don’t own the property, I’ve merely paid for the right to use it in limited ways. It must be one or the other.

As I’ve noted, rights can’t disappear, they can only be abriged (the usual description for this is usurpation or tyranny). So in the cases where people voluntarily agree, where did the right go? Can they attach the loss of rights to unborn generations? Can it be recovered? How?

Other cases might include bankruptcy. Lets say you are part of the voluntary restrictive covenant group, but default on a loan and I get your property (can you even use it as collateral if you don’t own it? Or assume the court holds it as an asset). I never agreed to the covenant, so I should be free to build a chemical plant. No contract can destroy or abridge that right. Of course your property might be in a trust which you have a share in that only grants certain uses, but the trust might go bankrupt since it is now the owner of all the properties and has joint liability.

You could buy private nusiance insurance so that the company would buy your house at the original value, or find a replacement of equivalent value, if a chemical plant was built next door. That would be a true market solution that did not reduce rights.

If property rights (in “ownership”) doesn’t include the right to build either a residence or business or anything else on a property, then it is not a violation of property rights when zoning restricts it. It is either a violation in both cases or neither. No one is forced to buy property in areas where zoning applies, so there is no coercion there either by the very same standard – if you don’t like zoning, merely live in the ex-ex-burbs.

My point is if I own something, zoning is a usurpation as it abridges my property rights. However I can’t myself abridge them and bind you, even as a condition of sale (as opposed to lease), to the abridgement. Too many libertarians love tyranny as long as it is private tyranny. But is the objection to the destruction of liberty only that it is the state that is doing it? That somehow suicide is proper because murder is worse?

You cannot voluntarily agree to inferior property rights and still say you own something. Only the entity with plenary rights has ownership. You can call it what you will, but voluntary slavery is still slavery. Condo owners under such a system are perpetual leasees, not owners. The distinction might be invisible for most purposes, just as zoning is if you never care to violate those laws.

John Stossel and James Bovard have noted that homeowner’s associations are basically tiny tyrannies and governments (do they have the right to use force or not). Holcombe may like his particular tyranny and find its forms of oppression useful, but that does not make their nature any different from zoning laws. A majority of the association can impose something far worse than any zoning law and he will have no recourse except to move. Being able to leave from some tyrannies doesn’t make them non-tyrannical.

One of those covenants (there was one in my parent’s house) was about race. Can I bind you in perpetuity not to give ownership of property to people of color? Are such clauses valid or not? If they are, I am involving third parties in the transaction – a contract is between the two parties – Smith and Jones can’t bind Brown with their contract. If it is not legitimate to prevent sale by basis of race, why is it on the basis on use? I can’t sell to a black v.s. I can’t sell to a chemical producer. What is the difference?

slopy March 24, 2006 at 11:00 am

Voluntary versus coerced. If you do not have to threaten to kill people or cut off peoples’ toes then it is okay.

“Can I bind you in perpetuity not to give ownership of property to people of color? ”

There are two sides to every transaction, often refered to as bid/offer. The property owner can offer anything they want (covenants, deed, slice of cheese, etc). Just remember that someone has to actually agree to those terms. In that case it is nobody else’s business but the two people involved in the transaction. If you don’t like the covenant offer more money or negotiate, we are human beings after all.

Jack March 24, 2006 at 11:50 am

Would be interested in your comments on my two biggest concerns w/eliminating zoning and restrictive covenants.

1. The strip club factor. Ok, so we all live in our nice $250K homes in a community, and all of a sudden someone sells his property and the buyer builds a strip joint on it. I do not have time to go around and make my own convenants with 80 people in my area, so how is this sort of thing avoided sans commercial development restrictions? The way it works now is that the developer has the deed in place before a property is sold. We knew moving in to our house that the property came with restrictions and accepted them.

2. Homeowners assns are a restrictive covenant, made imo mostly for the sake of making residents of a community (instead of the city) pay for green space. Now, without going down a rathole of discussing HOAs, how do you avoid someone moving in next door and putting a car up on blocks in the front yard or having a lawn that resembles a prairie? The things that our neighbors do DO impact property values, so I guess it’s hard for me – in the interest of protecting the property values of all residents – to say that restrictive covenants are a bad idea.

Nick Bradley March 24, 2006 at 11:50 am

TZ,

In such a circumstance, I am merely trading away PART of my property rights in exchange for something else: Peace of mind that, in this case, a chemical plant is not built next door. I voluntarily traded those rights away.

Property rights are never absolute. My property rights do not extend from the earth’s core to infinity; I cannot sue XM Radio for allowing a satellite to pass over my property.

Nick Bradley March 24, 2006 at 11:58 am

Jack,

You mention cars up on blocks. As a matter of fact, the covenant in place in my neighborhood forbids such a thing. Its attached to the value of the property.

Residential properties in neighborhoods with covenants designed to keep people from putting up strip clubs would be attactive to buyers, hence raising the value.

If that is something that you want, buy a home in a neighborhood w/ a covenatn that restricts such activity.

The reasons there aren’t as many covenants today is because gov’t regulation has crowded out private regulation like covenants.

Paul Edwards March 24, 2006 at 12:13 pm

Tz,

“Can they attach the loss of rights to unborn generations? Can it be recovered? How?”

Fair question and good point. I think Rothbard answers this in his “Ethics of Liberty” here http://mises.org/rothbard/ethics/nineteen.asp

“The only proviso is that there must, at every time, be some existing owner or owners of all the rights to any given property. In the case of a restrictive covenant, for example, there must be some owners of the reserved right to build a tall building; if not the developer himself, then someone who has bought or received this right. If the reserved right has been abandoned, and no existing person possesses it, then the owner of the house may be considered to have “homesteaded” this right, and can then go ahead and build the tall building. Covenants and other restrictions, in short, cannot simply “run with the property” forever, thereby overriding the wishes of all living owners of that property.

“…all rights to any property must be in the hands of living, existing persons. It might be considered a moral requirement for the descendants to keep the land in the family, but it cannot properly be considered a legal obligation. Property rights must only be accorded to and can only be enjoyed by the living.”

As for this

“Lets say you are part of the voluntary restrictive covenant group, but default on a loan and I get your property (can you even use it as collateral if you don’t own it? Or assume the court holds it as an asset). I never agreed to the covenant, so I should be free to build a chemical plant.”

I would argue that, just as it is the creditor’s responsibility to determine that the property has no lien against it and that the borrower is in fact obtaining free title to the property, he must understand the nature of the restrictive covenant under which the property is being sold. For a creditor without underhanded intent to subvert the legitimate purposes of the covenant, this should be just fine, because, as we know, the covenant will have been entered into for the mutual benefit of all property holders to keep property values high.

Next is this:

“No one is forced to buy property in areas where zoning applies, so there is no coercion there either by the very same standard – if you don’t like zoning, merely live in the ex-ex-burbs.”

which may actually get us to the crux of your difficulty with covenants. At the point when zoning first arrives, it is not a voluntary contractual agreement amongst property owners. It is a coercive decree made arbitrarily by those holding the territorial based monopoly of jurisdiction, the state. This decree, most likely reduced property values or else the property owners themselves would have voluntarily restricted themselves in that way. In stark contrast, a covenant is a voluntary contractual agreement made by the affected property owners for their benefit made probably for the purposes of keeping property values high. So there IS coercion in zoning, whereas there is NONE in covenants.

Finally,

“Can I bind you in perpetuity not to give ownership of property to people of color? Are such clauses valid or not? If they are, I am involving third parties in the transaction – a contract is between the two parties – Smith and Jones can’t bind Brown with their contract. If it is not legitimate to prevent sale by basis of race, why is it on the basis on use? I can’t sell to a black v.s. I can’t sell to a chemical producer. What is the difference?”

I know it sounds cold, but as you imply, there really is no ethical difference between a covenant against minorities vs chemical producers moving in. And in both cases, such a covenant is entirely ethical. With property is included the right to enter into contracts and a right to exclude. As for what would keep Jones from selling to Brown without binding Brown to the contract is that Jones is bound by the contract to do so. Jones is not going to subject himself to penalty, just because Brown didn’t want to enter into the contract. He will sell to someone who is ok with the contract.

Jim March 24, 2006 at 4:58 pm

An interesting court decision relative to British law regarding property rights after death. Sound very Rothbardian.

“… British Imperial Copyright Act of 1911, which was in force in South Africa at the time Linda composed his song, all rights revert to the heirs, who are entitled to renegotiate royalties.”

http://news.yahoo.com/s/ap/20060323/ap_en_mu/safrica_sleeping_lions_4

tz March 24, 2006 at 9:28 pm

There is the idea of nuisance which I forgot. The reason you can’t build a chemical plant in an area homesteaded for residences is that normally there will be sufficient nuisances created that a cease and desist order and/or damages will close it down. However if you could run a chemical plant without the attendant problems (e.g. small, high value reactions in your basement), I don’t see the problem.

PE: I think Rothbard resolves the point nearly in the manner I would, but you still have problems – if you borrow using your house as collateral (or part of your credit application is your property), you then cannot enter into any covenants or you defraud your creditor. Though I will note that most creditors can’t be that intrusive (as a matter of practicality), so it would require candor on the part of the borrower lest he defraud unintentionally.

But there is still a problem in some covenants. I can only be sued on a contract I’m a part of. If you and I buy a property, we each may have individual contracts with the original seller, but if I violate it, the only one who can take action is not you, even if I am violating something you value. Only the original seller would have that right, and it might be easier for him not to.

And I mentioned bankruptcy for a reason (or you could add divorce where the non original owning party gets the house). These actions allow contracts to be broken. The question is where the shear line is.

averros March 24, 2006 at 10:19 pm

tz –

And I mentioned bankruptcy for a reason (or you could add divorce where the non original owning party gets the house). These actions allow contracts to be broken.

Only if the State interferes.

The state regulation of rights of creditors (such as enforced debt relief in bankruptcy) merely forces the creditors to shift the burden of the risk of losing the debt onto honest debtors, thus making them to pay higher interest for the inability of others to manage their finances.

How horribly the divorces can go wrong in US is a common knowledge, and a kind of cottage industry of legal extortion. Honest adults do not pretend to have any right to have another adult to support them.

Actually, the kinds of contracts which can be broken by the divorce commonly have a spousal consent clause, which makes any such contract binding even after divorce, if any half-competent lawyer was involved in drafting it.

John Pertz March 26, 2006 at 11:06 pm

How much is zoning a function of wealth. An early contrarian in this thread brought up the point that some of the countries wealthiest communities also had rigid zoning laws. I am wondering if the zoning laws are a function of having wealth. This should be something worth looking into.

David Spellman June 6, 2006 at 4:28 pm

I love the juxstaposition of bribery versus exaction: passing money under the table is a crime, demanding it over the table is a virtue.

If one person takes your property by force we call it theft and it is a crime.

If a group of people get together to deprive you of your propety we call it a mob and it is lawlessness.

If the majority of people vote to take your property we call it democracy and it is a virtue!

RC Helicopters January 30, 2011 at 8:38 pm

The subsequent time I read a weblog, I hope that it doesnt disappoint me as much as this one. I mean, I know it was my option to read, however I really thought youd have something attention-grabbing to say. All I hear is a bunch of whining about one thing that you could fix should you werent too busy searching for attention.

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