The Homeowner CartelPosted: March 11, 2012
It’s an unusual situation in which a potential competitor must ask the competition for permission to conduct business, in this case the obstruction is homeowners:
Rules that make it harder to build enrich the incumbent owners of improvements within the restricted area. But because they drive up home prices, they make people who do not own buildings within the restricted area worse off—and the net effect on the economy is negative. When every jurisdiction engages in defensive zoning, we become poorer on net as a country, struggling to find affordable housing, even though every individual jurisdiction consists of voters acting rationally to serve their own interests. The question, then, is how to save us from ourselves—how do we stop homeowners everywhere from forming anti-development cartels?