Is “Universal” Zoning Variance an Answer to America’s Housing Shortage?

February 12, 2019

At this point, housing scarcity in America has been the norm for a generation. Rents in desirable urban areas remain high, and politicians have put forth solutions ranging from rent control to deregulation. Some, like San Diego Mayor Kevin Faulconer, have gone so far as to combine these two seemingly disparate concepts. Faulconer’s idea, to allow “unlimited density” for fully rent-controlled buildings, contains the seeds of a long-term solution to the problem of municipal NIMBYism.

The policy is a “universal” zoning variance that would waive most land use regulations for projects that fit criteria codified by state or municipal lawmakers. Presumably, this would require the removal of rules that limit building mass in exchange for affordable housing. Similar rules could allow buildings that include any number of “good things” in exchange for extra density. These could include space for community facilities like schools and recreation centers, energy-efficient buildings, ground-floor retail or other accommodations to limit the negative spillover effects of land use deregulation.

A locally designed universal variance would allow the community to decide on a baseline of generally acceptable uses, much like some existing density-bonus programs. However, municipalities would be able to decide which rules to keep and which rules to suspend in exchange for the variance. Doing so would open the door for proposals that would be over-broad at the state level. For instance, a town could allow by-right remapping to existing, more-dense zones, allow easier adjustments to lot boundaries to facilitate property assembly or limit the types of public comments that can be considered in the zoning approval process.

Statewide universal variance rules would need to be simpler and broader to account for differences across communities. At its simplest, a statewide universal variance could supersede local zoning laws in exchange for a contribution—say, one percent of a property’s built value—to a conservation fund used to protect and improve land elsewhere in the state. Contributions to this fund would necessarily be voluntary, making them different from the exactions and “proffers” some states have used.

Some environmentalists have argued for preserving 50 percent of land for nature. 50 percent for nature implies that the other 50 percent should be for human use, but existing land use regulation prevents the density required to free up half of all land. A state-managed conservation fund fueled by payments in exchange for density would work toward these goals, both by decreasing demand for land at the exurban fringe and by generating a pool of money that could buy land for conservation in places deemed important to permanently preserve.

By enacting these policies, states would avoid some of the pitfalls of prescriptive “good things” lists that require in-kind donations at the local level.

Mayor Faulconer was onto something with his idea of “unlimited density” for affordable housing. Regardless of how it’s designed, the concept of a universal zoning variance in exchange for local amenities or payments to conservation funds is one potential mechanism for easing the burden of land use regulation in growing towns and cities. It could also bring us closer to a world where 50 percent of land is conserved for nature.