Against Industrial Zoning

The fights in the trenches of zoning law (i.e. local government limitations on land uses in particular areas) are usually about housing density in residentially zoned areas. Generally, developers, urbanists and some environmentalists are pushing for higher residential densities. Generally, existing local residents, believing that it will improve their property values, favor lower residential densities.

The details of the disputes vary. It may be between large lot single family housing and small lot single family housing. It may be between small lot single family housing and small lot single family housing with granny flats. It may be between single family housing and duplex/townhouse developments. It may be between duplex/townhouse developments and low rise apartment buildings. It may be between low rise apartment buildings and high rise apartment buildings.

I'm personally skeptical about the benefits of government regulation through zoning of residential density. I acknowledge that some regulation is needed. An apartment building that does not have adequate parking gobbles up the government owned commons of street parking. Buildings that are taller than local fire equipment can handle puts residents and neighbors at risk. Development without access creates an irresistible urge to trespass. But, I personally would favor zoning based on externalities, rather than simply based upon land use or building type ("form based zoning").

The evidence that high density housing is bad for neighboring low density housing as a general rule is weak. The main difference between a handful of unzoned cities and the overwhelming majority of cities that have zoning, is that housing density is more mixed. Commercial and industrial uses mostly segregate themselves even in the absence of land use regulation, because of the fundamental economics of the real estate market. Shops create commercial traffic that benefits other shops. Many factories want land cheaper than it is available subdivided into housing lots in a residential subdivision.

Even people who aren't worried about townhouses tainting neighborhoods with single family homes, often believe that commercial development needs to be regulated. One of the main accomplishments of the New Urbanist movement has been to remind people that residential and commercial developments are not inherently incompatible. A coffee shop in otherwise residential neighborhoods, a la the Wash Perk coffee shop at Ohio and South Emerson in my neighborhood, or a main street style development with ground floor retail and top floor residential development of the kind common in my home town of Oxford, Ohio, can mesh easily and comfortably into a more vital neighborhood.

But, even the radicals of zoning reform usually hold fast to one of the earliest principals of zoning that took hold long before more comprehensive "Euclidian zoning," named after Euclid, Ohio, that city whose case established the constitutionality of the practice) in the 1930s: Industrial uses should be separated from other uses.

There is reason to doubt even this bedrock principal of zoning theory.

Significant recent scholarship has looked at industrial zoned areas in New York City. In New York City, commercial and residential property values have historically been very high. Lots of people want to live in New York City and have offices there. Nobody wants to build new factories there and the factories are remain are increasingly marginal. Effectively, these are subsidies for industrial uses that are sited in places that have much more value with non-industrial development.

Some commentators, like one in this week's Newsweek magazine, think this is good, because it keeps the local economy diverse, buffering it against catastrophies like a financial sector collapse by giving it other sources of jobs of tax revenues, and bemoan the loss of New York City's factory jobs. Others use this situation as evidence that it is not economically sound to keep residential and commercial developers who are willing to put up with stink and noise, out of industrial zoned areas.

On the other hand, lots of uses that are classified as industrial aren't nearly as bad neighbors as they used to be.

Downtown Denver, a stone's throw from city hall and high end residences in the Golden Triangle and LoDo, has a factory that employs four hundred people and produces about half of the nation's supply of the product it produces. This involves processing metal and goes on twenty-four hours a day, five days out of seven every week. It draws almost no complaints from neighbors. It is the U.S. Mint. You could easily confuse it for another court house or government office building. Right next door to the U.S. Mint is another land use that terrifies neighbors despite being mostly benign, a jail (with a new jail under construction).

One of most noxious land uses in downtown Denver is one you wouldn't expect: Civic Center Park, which is a favorite for vagrants, truants and open air drug dealing. When a festival or serious protest isn't in progress, Civic Center Park can feel decidely unsafe, despite the fact that the state capital, state judicial building, central branch of the Denver Public Library, Denver court house, municipal headquarters, Denver Post headquarters and corporate office buildings ring the park.

I have a dairy shipping center in the middle of my own West Washington Park neighborhood that is similarly benign. The Celestial Seasonings tea factory in Boulder may generate a bit of noise and traffic, and have a faint aroma, but is a far better neighbor than a dog kennel.

Modern factories aren't silent and do operate at night creating some traffic. But, the lessons of Upton Sinclair's "The Jungle" have been almost fully assimilated. A large share of modern factories have little or no smokestack emissions. They are clean inside and out. They have about the same rate of occupational injury as office work. Their workers are healthy, reasonably well paid adults, not exploited children and marginal sweatshop workers. The heavy work is done by sophisticated machines and a good share of the people who keep those machines working are technically skilled professionals. Many modern factories are better neighbors than supposedly bucollic farms, gas stations, dive bars widely permitted in residential neighborhoods, or a house full of college students. Your average urban interstate highway provides far more externalities than your average factory.

Sure, there are still some industrial uses that most of us would not want to live near. The pet food plants between downtown Denver and I-70 cast a stench that not infrequently wafts all the way to urban residential neighborhoods half a dozen miles away when the weather is wrong. Oil refineries not only stink but sometimes produce horrific and dangerous accidents like a recent incident in metropolitan Denver where a truck full of gasoline tried to race a train and lost. A coal fired power plant is not a good neighbor for an elementary school, despite modern emissions scrubber technology.

But, the share of industrial uses that are seriously problematic to their neighbors is much smaller than they used to be, and the amount of a buffer needed to make these uses tolerable is much smaller. Most factories these days do not look like the now closed Gate Rubber Plant that is poised between West Washington Park and Platte Park, which is now a brownfield development that will be used for residential and commercial purposes.

Given the reality of the modern factory, an externality control based approach to land use makes more sense, even for properties that would normally be zoned industrial, than traditional Euclidian zoning for these uses. The same conclusion applies to warehouse uses often confined to industrial zoned areas. Warehouses may actually be better neighbors than many kinds of residential and commercial use.

Aside from an increasingly thin class of heavy industrial activity, that doesn't even include most modern automobile assembly plants, zoning isn't a very good way to regulate modern land use. And, the touchstone for identifying which activities do need to be set apart, likewise, should be tangible externalities like air pollution, vibration, water contamination, smell, noise, and demands on city services, rather than older taxonomies. A modern feedlot behaves more like a oil refinery for land use purposes than most modern factories.