Transcript

[00:00:05] Anthony Flint: Welcome to Episode 3 of Season 7 of the Land Matters podcast. I’m your host, Anthony Flint. In our Mayor’s Desk series here at the Lincoln Institute, we interview municipal chief executives from around the world. Our latest conversation brings us all the way to Fairbanks, Alaska, a city of about 30,000 people, way up north near Russia, the gateway to the Arctic as it’s known, the second largest city in the state after Anchorage, and a metropolis that has been awarded the title of coldest city in America, having set a record low of minus 66 degrees Fahrenheit.

We’re talking with 44-year-old Mindy O’Neall, who recently replaced an incumbent and campaigned on themes including downtown revitalization, affordable housing, and public safety. She grew up in Iowa and drove a stick shift pickup truck up north, first working as an aide in the Alaska State Legislature, then the Fairbanks Economic Development Corporation and the Interior Gas Utility, and also founded Blue Canoe Media, a boutique communications and consulting firm.

She holds a BA in event planning and business communication from Iowa State University and an MA in professional communications from the University of Alaska Fairbanks, where her research focused on governance and climate impacts on rural Alaska, including the relocation of Native communities. Prior to her election as mayor, she served on the Fairbanks North Star Borough Assembly and was executive director of the Cold Climate Housing Research Center, and also serves on the boards of the Alaska State Homebuilders Association and Alaska Municipal League.

She lives in downtown Fairbanks with her dog, Tito, who, as she pointed out, is the true official dog of Alaska, the mutt. I first met her at a program for mayors at Harvard and followed up with this interview.

For the uninitiated, including those of us in the lower 48, what kind of place is Fairbanks, and why did you want to be mayor?

[00:02:22] Mayor Mindy O’Neall: Well, thanks, Anthony, and thanks for inviting me onto the show. I get this question a lot, especially for the uninitiated, as you said. That’s cute. You’re right. Fairbanks really is an exotic place. I would say we’re the land of extremes. We are extremely cold in the winter. We’re extremely warm in the summer. Some people may be surprised to learn that we can get up to 90 to 100 degrees in the summer. The force of the sun, the feeling of the sun, is so direct that it is just something you have to experience. We have exotic animals, grizzly bears, and polar bears. We have extreme industry like mining and gas and oil development. We are definitely a place of extremes.

At the heart of it is the people. It’s these people who have grit and determination, and oftentimes this mindset of abundance, where we have so much, as far as so much light, so much darkness. Then, a lot of times, this mindset of scarcity as well, where we’re at the end of the line, we have three to four days of food security at any given time. There’s things that also come into play that really just demonstrate how much of an extreme environment we live in.

Yes, wanting to be mayor. I’ve been in Alaska for over 23 years. I’m originally from Iowa, so I’m a land dweller from the middle of the United States. I came up here, just like a lot of other folks, looking for adventure. If you’ve ever been to the Midwest, they say, “Why would you ever want to leave the land, the heartland?” I said, “Don’t worry, I’ll be back in a year. I just want to go check it out.” After a year, it was painfully obvious that there was so much more to discover to Alaska that I just had to stay. I made my way up to Fairbanks from Anchorage after being there for seven years. I worked in the legislature and started to work for an interior gas utility that brought natural gas to our town.

During that time, I was an untraditional student and went back to our flagship university at the University of Alaska Fairbanks, and got a master’s in organizational development. I wrote my thesis on the politics of relocating Alaska Native villages due to climate change. At the time, I didn’t really realize how that was going to inform my career as much as it has, because after being a labor agent for the laborers. I was the executive director for the Cold Climate Housing Research Center. I spent the last four years doing that while also serving on the Borough Assembly.

One of the things that’s interesting about Alaska is we have seven boroughs that are like counties in the lower 48, and then we have cities within those boroughs. Fairbanks has a borough that has a governing body, which is the assembly, and a mayor. Then within the borough, there are two cities that have each their own mayor and each their own governing bodies. Now I am the mayor of the city of Fairbanks. I have a city council that’s a smaller council that’s located within the borough. The borough is about the size of New Jersey, with 130,000 folks in it. The city is 32,000 of those. Then the city located within the borough is the city of North Pole. They have about 2,500 folks in there.

Like a lot of places where you go from city to city in urban areas, you may or may not know what boundary you’re in. That can be sometimes a point of confusion. We always like to joke for a place that’s so against government and against overregulation, we have a lot of government regulating us.

After serving in the assembly for six and a half years, I started my public service during COVID. I think I had been appointed for about six months and then elected about four months before COVID happened. I really learned how to govern in an elected position through a screen. I do think that COVID was obviously and certainly a pivotal point in politics, but even just in the way that we communicate. That’s my passion, my heart and soul, is communication and journalism, and that sort of thing. We had a mayor that was on paper doing a fine job. He had gotten programs started and knew the city really well and led it, but he was very discriminatory to the Alaska Native population here.

After some comments and some blow-ups that he had on social media, I knew that if anybody was going to be able to beat him in an election, that I’d be able to do it. I just believe that public service is a privilege, and somebody who is in office has to have the respect of every population that is within their community. I’ve wrestled with this a little bit coming into office as, well, the last mayor, he wasn’t doing a bad job. He was actually doing a good job, but he wasn’t showing our community the respect.

I think sometimes we miss out on that key piece of public service is showing your community respect, even if you don’t understand them, even if you don’t agree with them. I think that we have lost that on a lot of levels of government these days. I believe in government. I believe that we have government for a reason. When you don’t have good governance, I do think that one of the benefits of being in this position in the last six months is being a female. This is the first time Fairbanks has had a female mayor in about two decades. I’m the fourth one since 1903.

It’s really touching to be able to be, and especially a young female in my 40s, leading this community and being a role model for other girls in our community to see that there’s somebody like them who treats a community with respect and can lead in an environment that is sometimes very hostile and sometimes very male-driven. That’s a long way of saying that’s how I ended up here.

[00:09:02] Anthony Flint: Everybody’s wrestling with affordability these days. One big part of that is housing. What are the policies that can help in your region, whether home buying or renting?

[00:09:14] Mayor Mindy O’Neall: I mentioned at the beginning that Fairbanks is at the end of the line. While that’s true, we also have an abundance of resources that are part of our economy. We have timber, we have renewable energy, we have access to gravel, and alternative methods such as mycelium. While we’re at the end of the road, we have these resources at our disposal to be innovative on how we approach housing. I think that those answers come in local manufacturing of our own resources, innovation, and then also building things like kind of part homes that have been tested for extreme environments.

We suffer from a housing stock that’s from the ’70s. Alaska really got its last big boom during the oil pipeline of the ’70s. What happened was there was such an explosion of Westerners coming up to the state that they built things the way that they knew how to build things, which was without a lot of insulation, built out of whatever they had. We suffer from very inefficient housing. When we talk about what affordable housing is, for us, it really has to include a component of energy efficiency, so we can even afford to heat our homes.

This year, we’ve had one of the coldest winters on record. I think it was the fourth coldest winter on record. We also got a remarkable amount of snow. It’s been very challenging for folks, especially now that oil prices are going up. We have about 1,200 folks in our community that are on natural gas. Everybody else is heating their homes with diesel fuel. If you think about that, we have folks who are getting delivery of diesel fuel to their homes, myself included. I live in the most urban part of our city.

Going back to affordable housing, it really does include this holistic look of what’s going to work and how we can be energy efficient with our housing, but also how we can use our local resources for innovation and how we can manufacture the resources that we have here. Secondly, and this is something that I think is really interesting, is this idea, this concept of building generational wealth outside of homeownership. That’s a model and a tool that I’d really like to explore more as we talk about how we’re building affordable housing in our community.

[00:11:45] Anthony Flint: This is this idea that not everybody has to buy a home. It’s perfectly fine to rent.

[00:11:50] Mayor Mindy O’Neall: Perfectly fine to rent, but then the next question is, how do renters gain generational wealth so they’re not just handing over money every month without anything in return? They get a house to live in, but there’s no equity in it after a while. In what ways — and I know there are models out there — when we’re building affordable housing, how can we lower the amount of investment for folks in a way that it might not come back to them for 30 to 50 years, but in 30 to 50 years, they’re on their second or third generation of family where they have security in their family in a form of tangible wealth?

[00:12:34] Anthony Flint: There’s also the community land trust model, where you have this more shared equity, and there’s limits on resale, but you still have it.

[00:12:43] Mayor Mindy O’Neall: I like that. There’s more and more folks talking about how to do this in innovative ways. I think typically building homes and housing has been the game or the business of large, wealthy developers. In our community, we just can’t really afford that. We don’t have enough folks for a large developer to make money here. When we start to rethink about who’s investing in our own community, and who can invest, then we start to, I think, build out that wealth better.

[00:13:17] Anthony Flint: The Lincoln Institute has been helping municipalities identify government-owned land that can be used for affordable housing. Do you see opportunities in that approach?

[00:13:29] Mayor Mindy O’Neall: Absolutely, I do. A few facts for you here. 60% of our land in Alaska is federal. 25% is owned by the state of Alaska. It’s about 580,000 acres. 10% is owned by Native corporations, and 1% is private. We have a lot of government land that’s available. Now, about 80 million of those acres are managed for conservation, but that’s still quite a bit of land left for us to use. I think what the Lincoln Institute is doing, exploring these different land-use models, including transportation and other components of community building, is fantastic. I can’t wait to get my hands on more of that information. I signed up for the newsletter.

We have a parking structure that has been mothballed for, gosh, probably five years. The university that used it ended up not needing it. They literally welded the doors shut, and this building has been sitting there deteriorating ever since. Through the Alaska Housing Finance Corporation, who is a statewide housing financing bank, they purchased that parking garage and have put it out for bid for affordable housing. They worked with us, saying, “Okay, we own this now, but it’s right in the middle of your city. What do you want to do with this?” We walked through the options that we have. Do we want senior housing? Yes, we desperately need senior housing. Is this the right place? We don’t think so. Okay. Next option, affordable housing, high-end housing, two bedrooms, apartment. What is it that we need? Through that process, we’ve put out an RFP for a developer to then build two or three stories on top of that parking garage, therefore activating the space using, again, the parking garage for parking, covered parking, which is very important in Fairbanks, Alaska, but also getting units into the downtown core.

That’s one example. There’s a few others that we have ongoing in town, but that’s one example that I’m really eager to see how that plays out.

[00:15:48] Anthony Flint: What are the unique challenges of living with climate change in Alaska, and what, at the state and local level, can be done about it?

[00:15:57] Mayor Mindy O’Neall: They often call the Arctic the canary in the coal mine because we start to see the issues of climate change far beyond and far before the lower 48 or other parts of the world. The Arctic has been saying that something’s happening in our environment for quite some time. I mentioned before what we’ve noticed is we have more wind in Fairbanks, which means that we have more risk for summer fires, wildfires. In the winter, we’ve had more snow than usual.

It’s also been very cold, so colder than usual, which means that our ground will not thaw quickly, meaning that when the temperature gets hot in the air, what’s going to happen? It’s all going to melt into water, but there’s going to be nowhere for it to go because the ground hasn’t unthawed yet. Now we miss out on that water. We get lots of floods, and then we don’t have moisture in the ground, and so it’s more susceptible to wildfires in the summer. That’s just one instance of the cycle of how climate change has affected the interior.

I don’t think that there’s really much we can do about this now. It’s happening. We’re in a cycle of climatic disruption, for sure, but we can plan for it. We can plan for extreme events, so we know what we’re going to do when the power goes out and it’s negative 30 degrees. We know what’s going to happen when our river floods in the middle of our town and we’ve lost access to the hospital or to hotels. We know what to do when we have an ice event because we got three or four inches of rain on top of three or four feet of snow in the middle of winter, and how that affects the animals, the moose. How it affects our ability to hunt and fish and gather berries or medicinal foods.

I think planning is a very big part of how we are prepared because, honestly, you don’t know what’s going to happen from season to season. The other thing is with planning comes money. Alaska is a place where we do not collect sales taxes on a statewide basis. Some municipalities do — we do not, as the municipality of Fairbanks — and income taxes. We pay property taxes, and that’s all we pay. As we address these more and more climatic, dramatic events, it’s costing us more and more to repair the roads, costing more and more to protect the utilities that are above and below ground, and somewhere that’s going to have to come from funding.

We’re seeing less and less investment from the federal government for events like that. As Alaskans, it’s time for us to think really hard about how we want to protect and at what level we want to protect our assets that we have, and what level of commitment that comes from our own pocketbooks.

[00:19:04] Anthony Flint: Yes, leading into that, figuring some of this stuff out at the local level or the local and state level seems to be really important right now. How have you navigated being a mayor at a time when the federal government is reducing funding and more or less withdrawing from being a partner on so many issues?

[00:19:26] Mayor Mindy O’Neall: Yes. It seems like we continue to ask our employees to do more with less. At the same time, the public expects services to be modern. That means we have to invest in technology. A lot of times, we just don’t have the funding for that. It’s a tough spot, I got to say. I have all of these ideas and plans for being mayor. Then you come into the office and you’re like, “Okay, how am I going to make this work with the operations that we already have going, the way we want to provide services and make things more efficient for our public with less and less funding from the state and from the federal government?”

Again, I do think that we’re going to have to look at ways that we contribute to ourselves, and that comes back to the values that we hold as a community. We’re a place where tourists want to be because that’s also a big part of our economy. It’s tough. I haven’t figured it out yet, but I have two and a half more years to go. It’s definitely something I’m working on a lot, and how we do more with less and how we increase, or how we explain the value of good governance with putting our own skin in the game.

[00:20:43] Anthony Flint: Mindy O’Neall is mayor of Fairbanks, Alaska, the latest leader to be interviewed in the Lincoln Institute’s Mayor’s Desk series. We love talking to mayors, and we’ve compiled 20 of these interviews in a book, Mayor’s Desk: 20 Conversations with Local Leaders Solving Global Problems, which includes a forward by Michael Bloomberg. Otherwise, Mayor’s Desk interviews appear in Land Lines magazine, in addition to most of them being broadcast here on the Land Matters podcast. You can find everything on the Lincoln Institute website. Just navigate to lincolninst.edu.

On social media, our handle is @landpolicy. Please go ahead and rate, share, and subscribe to Land Matters, the podcast of the Lincoln Institute of Land Policy. For now, I’m Anthony Flint signing off, until next time.

[00:21:41] [END OF AUDIO]

Transcript

[00:00:05] Anthony Flint: Welcome to Episode 2 of Season 7 of the Land Matters Podcast. I’m your host, Anthony Flint. Of all the major Supreme Court decisions of the 20th century, there’s one that stands out for shaping the way we live and the physical contours of the American landscape: Village of Euclid v. Ambler Realty Company, which affirmed that cities and towns could institute zoning as a way to regulate all growth and development.

The case came out of a suburb just east of Cleveland in the 1920s when a real estate company sought to use their land for industrial development. The town said no, we want that area to be residential. Ambler Realty sued and the case made it all the way to the Supreme Court. The justices backed the Village of Euclid and in so doing provided constitutional blessing to the basic concept of zoning that we all see in color-coded maps to this day, homes in one part of town, commercial and retail in another, and manufacturing and industrial uses in yet another.

At the time, Justice George Sutherland made the comment that a factory shouldn’t be in a residential area any more than a pig in a parlor. He also said apartment buildings shouldn’t be mixed in with single-family homes, saying the presence of residential density was like welcoming in a parasite. Strong words from Justice Sutherland, to be sure, but from that point on, thousands of municipalities followed the template of separating uses and spreading them around. That was in 1926.

Understandably — not everybody might be aware of this –but scholars and policymakers and others are actually marking the 100th anniversary of the Euclid decision. It’s not so much a celebration but a reconsideration of the landmark ruling, looking at the effect that’s had 100 years later and essentially reassessing what has come to be known as Euclidean zoning itself.

Some 33 states have passed reforms to allow more density in zones once reserved for single-family homes only, and to promote the concept of mixed use, blending housing with shops, restaurants, and workplaces all within walking distance — basically the kind of neighborhoods that Euclid made illegal. The critique suggests that American zoning is outdated and hasn’t kept up with the times, and perhaps, most important, has made housing unaffordable and racially segregated.

With us today to unpack all of this is William Fischel, a professor emeritus at Dartmouth College and author of the book, Zoning Rules, published in 2015 by the Lincoln Institute. That volume is cited in the early pages of Abundance by Ezra Klein and Derek Thompson, who blame excessive regulation for blocking housing and infrastructure projects. Fischel is also the author of The Homevoter Hypothesis, an explanation of how mostly single-family homeowners tend to resist any changes because they’re worried about property values. We’ll discuss that in just a bit.

I should add that Fischel was the keynote speaker at a symposium at George Mason University earlier this year, co-sponsored by the Mercatus Center, the Pacific Legal Foundation, and the Journal of Law, Economics, and Policy, which was featured in Bloomberg City Lab and Land Lines Magazine. He’s a great friend of the Lincoln Institute and served with distinction for many years on the board of the organization. Bill Fischel, welcome to the Land Matters Podcast.

[00:03:31] William Fischel: Thank you, Anthony. Good to be here.

[00:03:33] Anthony Flint: Let’s start toward the beginning of all this, the advent of zoning in the US. One of the fun facts I discovered while researching some of this is that zoning was imported — along with the delicatessen — from Germany after the turn of the last century. Why and how did zoning come to be the go-to policy for guiding growth and development in this country?

[00:03:55] William: Edward Bassett, considered to be the father of zoning: he and other people went to Germany. Germany was the place you went for advanced civilization. In the twenties before World War I, Germany was the high point of culture and science and social science as well. Bassett and some other people went to Germany and studied zoning. He came back with the idea that you could have comprehensive zoning.

Now, comprehensive zoning in Germany turned out was different from comprehensive zoning in the United States. That is, the United States massaged it quite a bit. In Germany, the idea was to split the city into something like thirds, like a pie wedge, so many pie wedges or pizza wedges, where businesses would be in the center, a logical place for them, and along each pie wedge would live the people who worked in that particular industry.

This was to save transportation costs, so you could go back and forth, so all the workers going to the same place could go to the same place at home, regular commuting instead of going in circles and so forth. If you were in the metal industry and there was a metal factory, the metal workers and their bosses would live outside. Now, the bosses lived in nicer homes, maybe a little farther out. It wasn’t like there was great intermixing, but there was this segregation by occupation. That didn’t go anywhere in the United States. We had company towns and things like this where people lived around the factory and so forth.

The zoning that occurred in the United States was really separating residential from commercial from industrial. I grew up in Bethlehem, Pennsylvania, where they had a great big steel mill. Workers clustered around the plant. A lot of people walked to work because they couldn’t afford a car, or it was just more convenient. The clustering was natural there. The separation of uses, commercial from industrial and so forth, was a feature of American zoning from the get-go. I think that was what made it fairly attractive.

[00:05:51] Anthony Flint: Now, there was also some thinking in the progressive era at the time about the health impacts. Can you talk a little bit about that, this idea that congestion and tenement houses and housing of any kind being close to a smelter or a tannery and all of that?

[00:06:08] William Fischel: There was certainly that. The big progressive move actually had occurred in the late 19th century that made cities much more livable. They got decent drinking water, and they dug sewers, got the waste out of the neighborhoods, at least. Those were great advances in public health.

Once that was fixed, people, as people do, want to go to the next best thing, and that is, “Let’s not have these noxious fumes from our factory.” If you’re a steelworker, you endure it during the day, you’d rather not endure it at night. You’d like to be a little farther away from the blast furnaces. That was part of the story. This was an issue that could be fixed by distance.

The plant operators in Pittsburgh got together and said, “It’s so damn polluted, people don’t want to live here. We can’t recruit executives to come from other cities because it’s so polluted.” They actually collectively, along with the state of Pennsylvania, restricted the plants themselves, reducing pollution, relocating them so they weren’t so close to the residents, and more or less cleaned up Pittsburgh by the standards of the time. That was a big accomplishment.

The thing that brought on zoning was the desire for single-family homes. That was usually not a problem when there was simply distance involved. What upset that equilibrium was the invention of the automobile. The automobile, and most importantly, the derivatives of the automobile, something called the motor truck and a jitney bus — a jitney bus was a small bus almost always privately operated that just cruised around neighborhoods, picked up people, and took them to work or took them shopping or whatever. It’s like an airport bus now today in its capacity, not in its comfort. The cheap car and the cheap truck and cheap motor bus made industry and apartment dwellers footloose. They didn’t have to walk to work anymore. The industry could put parts of their business, maybe all of their business, out in much cheaper land in the suburbs.

The industry was suffering from congestion by the docks or by the railhead, competing with other businesses. They say, “Let’s move the warehouse out in the suburbs here. We’ve got this tract of land.” Put up a warehouse or put up some storage place or put up a back office operation. They could do that now that they could truck things from one place to another pretty easily. They didn’t have to be stuck to rail lines or trolley lines. That’s what made the single-family house vulnerable. It couldn’t be cured by distance anymore. It had to be cured by something else.

Eventually, developers in California led the charge here. Everybody was moving to California in the early 20th century, emptying out the Midwest. Developers wanted single-family homes. They wanted that single-family house in the suburbs, out in Pasadena and outside central Los Angeles.

The developers in Southern California faced up to this problem and said, “We need to adopt some collective action.” They got the city of Los Angeles to let them establish their own residential districts. It was really the first zoning laws. The problem that came up in Los Angeles was that industry was having a problem finding a place to locate.

The classic case, Sebastian v. Hadacheck … Mr. Hadacheck had a brick factory. He had it downtown Los Angeles. Residential development occurred around his brick factory. You’d think they would have smelled it first, but there they went. They established one of these residential districts and said, “You’ve got to get out of here. Sorry, Hadacheck. You can’t stay here anymore. You’re in the wrong zone.”

Hadacheck moves away, a couple of miles away, and it’s open land. He builds up his brick factory. He has a brick truck. He’s got that Henry Ford derivative invention of a truck. He can move his bricks. He’s happy as a clam until somebody develops a residential area right next to him. Same thing, deja vu all over again, as Yogi Berra would say. He gets zoned out. He takes this case to the California Supreme Court. The California Supreme Court says, “Too bad. First in time is not first in right.” If you’re making something like a nuisance or a brick factory, they’re not pleasant to be next to. He takes it to the US Supreme Court. The US Supreme Court says, “Too bad. Sorry, Hadacheck. You have to move.”

Los Angeles turns around and says, “We have a problem here. Our problem is we got lots of residential land, but we have no place for them to work. We have no place for them to put brick factory. We can’t do anything if we can’t have our business.” They invent the exclusive industrial zone.

On the other side of the river, no houses allowed, at least no new houses allowed. Industry is free to locate there. Once they do that, they have something that looks comprehensive. Just before they do that, New York comes up with it’s comprehensive zoning. My friend, Edward Bassett, writes the zoning law, pretty much, and separates commercial and apartments and so forth in all five boroughs. New York City is a big place, even bigger than Los Angeles back then. Those two events are the birth of zoning.

[00:11:36] Anthony Flint: Now, there’s another theme underpinning some of this in zoning, and that is racial segregation. How did zoning end up becoming a tool to set down the rules for who lived where?

[00:11:49] William: Modern zoning and zoning stemming from Euclid was not who lived where, but what you could do where. It wasn’t a matter of Jones and Smith have to live on this said street and Brown and White have to live on the other side. It was about residential versus commercial versus industrial, and always the size of that house and so forth.

The mix-up, the mash-up here, and I think people are understandably both confused and concerned by this, is that there’s a case before Euclid called Buchanan v. Warley. In Buchanan v. Warley, it started in the border states of the South: Maryland, Kentucky, Tennessee, and Missouri, and so forth. Prior to World War II, a lot of industry is starting to develop, partly generated by demand for US products from the outbreak of the war.

Lots of Black people are coming to these cities. They’re sick of being sharecroppers and being discriminated against, and so they move north to cities. The cities of the border south are quite unwelcoming to Black residents. They’re okay with them in their factories, but they want them to live in their own place. There’s no law that says that Black people have to live in this section and white people live in that section, so they make a law that says exactly that. The law says, “In this area, wherever there are majority whites located in a block, then Black people cannot live there, either rent or buy, except as servants.” This is really virtually an apartheid ordinance.

This law is taken to the US Supreme Court, Buchanan v. Warley, nine years before Euclid, hears the case. It takes a look at the 14th Amendment of the United States, which says life, liberty, and property shall not be denied them anyway. It says, “No, this violates the Constitution and strikes down the law unanimously.” Conservative, liberal, everybody in between says, “No, that will not fly.”

Some of the cities go and try and tweak it a little bit. They see this thing called zoning. Zoning comes in after this and doesn’t mention race or anything about the characteristics of people who might occupy. It just says use. It divides things up. There were residential zones. There were residential zones that allowed apartments. There were commercial zones. There were industrial zones. These zones, in ways that you’d look back at it and say, “It looks sensible.” The residential zones are along these loopy streets that you see in suburbs that were popular back then. The main drag is zoned for apartments.

What Euclid does mainly is says, “It’s okay to separate these uses. We’re not giving you standards as to how to separate them. We’re not telling you what the property is. You’re not telling us you can separate by race. We already struck that down.” Cities kept attempting it, and the courts, even the state courts in the South, were striking it down. It never got any real traction. Zoning, on the other hand, blasted out the gate once the Supreme Court said, “Okay.” The irony here is that developers now complain about the zoning regulations and so forth. Zoning was a developer idea.

[00:14:54] Anthony Flint: All of these threads continue to intertwine through the Great Depression and World War II, through the well- documented practice of redlining certain areas to be eligible for mortgages, the prevalence of racial covenants, on through with the development of places like Levittown and increasingly larger lots that only certain people can afford.

What’s so remarkable is that these rules got so locked in, as you point out, with the owners of primarily single-family homes buttressed by environmental laws and the growth management movement, at least since about 1970. Can you talk a little bit about why it was effectively defended for so long and, of course, continues to be, and that is this idea of nimbyism or not in my backyard?

[00:15:39] William Fischel: I’ve been studying zoning for 50 years. I looked at zoning and I thought it looked too restrictive from an economics point of view, but I said, “Why is this?” I needed to understand not just how zoning operated, but who was behind zoning. I looked around and was on the Hanover (New Hampshire) zoning board. I’m looking at who’s showing up at my meetings. They’re homeowners.

Asking myself, “Why are they going on about these proposed developments near their homes that look perfectly benign to me, better than most, and going on like the earth will end if this project gets done?” It hits me in a financial sense that these people, homeowners like myself, maybe like you, have a very large asset in their financial portfolio.

I’m thinking like an economist. This asset, unlike stocks that you might own, is not diversified. My pension fund is diversified. If General Motors goes south, Tesla will take up the slack, big deal, diversified portfolio. Most of my other assets, about half of my assets, I would estimate, are in my home. If that goes south, there’s no diversification. I can’t pick up my home and move it to another neighborhood. I can’t put my home up in parts and sell it to other parties to make a mutual fund out of it. I’m stuck with a very undiversified asset.

I developed the idea that homeowners are acute, overly, acutely aware of the risk, not just the value, the risk that their home endures because it’s in one place, in one industry, in one location, and they’ve got to defend it. They have to defend it more than you would think would be rational because they’re not just thinking about the expected outcome, they’re thinking about the risk. They show up at the zoning board and behave like they’re irrationally concerned when they’re not irrationally concerned. They’re NIMBYs. They’re not in my backyard.

Now, these people are not terribly effective until 1970. The environmental movement gives them a tool to run around me on the zoning board, to go to court and have the courts decide this. Now, the courts might be sensible places to do, but they take time. For developers, time is money. They’ve bought the land on a loan and they’ve got to pay interest. The bank is not waiting for them. They make compromises. “Oh, we wanted to have quarter-acre lots here. How about I make them half-acre lots or 2-acre lots or something like that?” Low density zoning because I can’t wait for you to decide.

Then lots of the environmental laws become really fussy about things like wetlands. Doubles the amount of land that is taken off the market where developers can’t go or they can’t go without conditions from the zoning board or the planning board to do it. Again, taking time, taking money to do it. This gets multiplied. The environmental movement is at the root of this. It’s not a crazy movement, but it’s taken to extremes by people who are not so much concerned about the environment as the value of their homes.

[00:18:34] Anthony Flint: Now that’s changing.

[00:18:35] William Fischel: I think eventually excessive success generates sometimes a collapse. I think that’s what we’re seeing now. I hope it’s a gentle collapse. I don’t want them to throw out all environmental laws. I don’t want them to fill in all the wetlands or disregard the important environmental issues. They’ve been taken to extremes and they’ve been abused by local groups.

What I’m seeing here is not simply state laws that say, “Towns, you have to pay attention to housing,” but also courts that are saying, “Hey, guys, this endless environmental invocations to stop development have to have an end.” It does have what economists would call an opportunity cost. That opportunity cost is housing and a stratified society and a stultified economy. That’s what the authors of Abundance have pointed out and saying, “We don’t have to be that way.”

One of the things that occasionally makes me happy to be in a diverse democracy is people occasionally say, “Yes, we have to change our ways.” I’m seeing people change their ways and changing their attitudes towards this. I don’t want to run back to 1916 and just get rid of zoning. I think the idea that we can just abolish zoning is very wishful thinking.

[00:19:48] Anthony Flint: A process where zoning is continually tweaked and revisited and an acknowledgement that times have changed, especially with affordability being so front and center.

[00:20:01] William Fischel: I don’t think if we abolished zoning, we would get rid of our racial problems by any stretch of the imagination. I think once you get the town manager or the city manager saying, “I’m sorry. We can’t fill out the ranks of the fire department because we can’t get people to move here,” that gets people’s attention after a while. The private sector has been complaining about that for a while.

Now I think there’s real traction of people feeling the consequences of this excessive fussiness about who your neighbors are that it’s starting to be at least chipped away at by state and even local legislation. I’ve been critical of my own town, but I’ll give my town a bit of credit. We have an infill development in process that allows single-family homes to be converted to two-family, even four-family homes in the neighborhoods. There is resistance, but it was generated entirely by the town council.

You present people with the facts and enough evidence, real-time evidence, sometimes they come around and say, “Yes, we do have to change our ways.” I’m encouraged. I’ve been retired from teaching for six years, but I’m happy to spread some of the hopefully good news of land use regulations that accommodate more people, outsiders, and a larger spectrum of the social and, of course, the racial spectrum that makes the United States an interesting place.

[00:21:17] Anthony Flint: What’s so interesting to me is just how these rules that most people don’t spend a lot of time thinking about really shape our society and how we live.

[00:21:28] William Fischel: One of the things I discovered on the zoning board is how naive, at least from our point of view, people are about zoning. Until something happens in the neighborhood, then they get well-informed. Then they understand what the rules are. I think enough things are happening from enough different points of view that some change is likely to happen. I don’t think it will be without rough spots, but I see the general trend as positive here.

[00:21:49] Anthony Flint: Bill Fischel, thank you so much for joining the conversation at Land Matters.

[00:21:54] William Fischel: You’re welcome.

[00:21:54] Anthony Flint: You can find more background on the Euclid case and Bill Fischel’s book, Zoning Rules, at the Lincoln Institute website, lincolninst.edu. Zoning has a special place in the history of the Lincoln Institute.

We actually had our own symposium on Euclid, if you can believe it, in 1986 on the occasion of the 60th anniversary of the decision, co-organized by Charles Haar and Jerold Kayden from Harvard, and led to the publication of Zoning and the American Dream: Promises Still to Keep, published in 1989. That book, in turn, was reviewed in Cite Journal, a publication of Rice University, under a headline that has to be one of the most clever in scholarly writing about land use: “Here’s Looking at Euclid.”

There’s an additional wonderful Henry George thread here as well. The lawyer for Ambler Realty, Newton Baker, succeeded Tom Johnson as mayor of Cleveland and was similarly a dedicated Georgist, alongside none other than John C. Lincoln, the founder of the Lincoln Institute, who was active as an inventor and entrepreneur in the Cleveland area around the turn of the last century.

One way or the other, we look at zoning and land use regulation, especially as it pertains to housing construction today, pretty much on a continual basis. After all, zoning is about land and we’re the Lincoln Institute of Land Policy. On social media, our handle is @landpolicy. Please go ahead and rate, share, and subscribe to Land Matters, the podcast of the Lincoln Institute of Land Policy. For now, I’m Anthony Flint signing off until next time.