Stupid Zoning Rules

By Bruce Firestone | Architecture

Apr 15

Here’s an excerpt from a book I wrote (Jenna’s Story, in which Jenna McConnell launches into a diatribe on how stupid zoning regulations help the top .01% (which she calls “Big Mules” or “Equity Lords”) control almost all the levers of political and economic power.

Jenna is from South Carolina and proudly speaks like a hillbilly, although, on occasion, she’ll put on her Vassar accent and talk English…

Her audience, is her lover, Tom Hatch–

“Ah suppose,” Jenna continues crossly as if his rude interruption had never taken place, “yo’ reckon Robin Hood was a fine fella too?”

Tom’s not sure how to answer this so he just shrugs his shoulders then on second thought he says, “Well he stole from the rich and gave to the poor… isn’t that what you are talking about?”

“Not even close, Tommah! Fry mah hide! Ah already said, pore varmints don’t steal. Ah reckon Robin of Loxley muss haf come fum a rich neighbo’hood t’do whut he did, cuss it all t’ tarnation. Pore folk don’t be wishin’ afer’ no free stuff. They jest be hankerin’ fo’ a small piece of th’ pumkin’ pie—sumpin’ they kin hono’ably claim fo’ themselves an’ their famblies.”

“You mean like a concession—something they can control and use to create value for themselves?” Tom asks to draw her out, having given up (for now) on trying to sidetrack her.

 “Exackly. Whut in tarnation does yo’ reckon th’ British Museum, th’ Eiffel Tower, th’ Smifsonian, th’ Louvre, th’ Great Wall of China, Notre Dame Cathedral, th’ Neuschwanstein Castle—that be in Germenny, th’ Statue of Liberty, th’ Colosteum, th’ Taj Mahal, th’ Leanin’ Tower of Pisa, Saint Basil’s Cathedral (in Moscow), Stonehenge, th’ Great Pyramid of Giza, th’ Acropolis, th’ Great Sphinx, Angko’ Wat, St Peter’s Basilica, th’ Parthenon, Mount Fuji, Machu Picchu, Hagia Sophia (in Instanbul) have become?”

“Let me guess—concessions for equity lord personal enrichment?”

“Co’reckomondo. Yo’ be two fo’ two, Tommah,” Jenna compliments him.

In response, Tom straightens up with pleasure at rare Jenna praise—he grows two inches taller (now the same height as Jim Folsom) and puts on 20 pounds of pride.

“They is also travesties, Tom.”

“Oh. Why? Because they’re owned and run by private interests instead of being in public hands?”

Tom is not only referring to the takeover by equity lords of what in previous generations would have been considered humanity’s collective heritage. He is also talking about the fact that city, town, village, and county services as well as most public and quasi-public goods such as bridges, transit, highways, airports, hyperloops, schools, water resources, radio waves, timber, fish stocks, ports, lotteries, casinos, minerals and so forth (not to mention Aye infrastructure and field technology) are in private hands.

It’s quite the racket—once Big Mules (as Jenna sometimes calls them) got laws changed—to permit converting municipal corporations from non-share capital companies to shareholder-controlled ones, it was only a matter of time before they came to own a majority interest in them; that is, cities themselves are now owned and run by privateers.

This meant that equity lords are now paying property taxes on buildings they own to, in effect, themselves. If anyone else had ever somehow found a way to own their own property, they would soon begin paying property taxes and numerous other fees to cities or towns controlled by Big Mules, ie, their competitors.

As far as Tom is concerned, private operation of public institutions can be a good thing… because private operators are usually far more efficient than their public counterparts. There is also this—once your town is connected to the loop network or, say, a bridge is built over a canyon, it makes no sense to duplicate it. Hence, there are no alternative service providers because these are “natural monopolies.”

But to Jenna and the abolitionists, concession owners are simply profit-maximizing monopoly providers, who can, for example, put competitors out of business simply by raising mill rates on all classes of property. No matter how high property taxes go, it doesn’t matter to them since they are paying them, basically, to themselves. But for erstwhile competitors, it drives them into penury, after which their properties get foreclosed on by municipal corporations who turn around and tax sale them to equity lords, controlling shareholders of those self-same cities.

It’s no different than what was done in many parts of Africa during the 19th century mining boom there. When white mine owners needed more workers, they simply found ways to raise property taxes on what up to that point had been sustainable, small-scale, black-owned farms, thereby forcing farmers off their land through impoverishment and foreclosure, and into a new kind of horrifying serfdom. If their new labor force ever thought of pressing for unionization and higher wages, governments could always be prevailed upon to expand these novel programs of pseudo expropriation via bankruptcy caused by expansion of tax rates.

Better yet for governments and those who control them, if their costs go up or their margins go down, they simply increase their prices (ie, tax rates) and people have to pay—first, because there is no competition and, second, because if they don’t, governments have vestigial authority to use either police power or ordinance enforcement officers to make them pay and obey. And, of course, there’s always this—they can tax sale properties in default and legally take them for themselves. It’s a hoot.

Lastly, equity lords use zoning ordinances to artificially restrict new supply/expansion of urban lands, which, of course, pushes prices up on existing property most of which they already own or soon will.

It’s another scam—eliminating challengers either by zoning them out of existence or by inflicting economic ruin on them by forcing erstwhile development competitors (aka, would-be real estate entrepreneurs) to produce a nearly infinite series of useless “studies,” which hardly anyone reads or even looks at.

The number of studies and documents required by most municipalities these days include: environmental impact, tree inventory, traffic plan, site servicing, landscape plan, grade control and drainage plan, overarching planning rationale, streetscape character analysis, site plan control, heritage overlay, compliance with community design plan and official plan as well as zoning ordinances, archaeological study, occupancy history, development assessment (highest and best use analysis), and about a dozen more[1].

The only folks able to negotiate their way through this incredible maze and obtain an approved development plan are those who have nearly unlimited amounts of capital. They are then able to deploy sophisticated armies of attorneys, planners, consultants and lobbyists over long periods of time to get what they want from regulators (basically, town, city or county government) that have long since been captured by those they are supposed to regulate, ie, Big Mules.

Zoning rules are an equity lord’s best friend because they artificially suppress competition as well as create cities that are uniformly boring, mono cultured, and sterile no-places.

And planners and regulators can’t help but be captured, over time, by those they are supposed to stupidvise. So regulars like equity lords and their humongous retinues get preferential treatment almost by default; everyone else is slow walked through what is already a numbing maze of byzantine rules.

Still not convinced that the deck is stacked against ordinary folk? Well, here’s a sampling of rules that mostly serve to lock people out of home and property ownership, and thereby remain trapped as equity lord tenants:

-it is illegal, and you are in breach of the fine print in your mortgage, to rent any part of your principal residence, so, for example, no roommates allowed

-you cannot have an office or micro retail space or physiotherapy clinic or yoga studio in your garage

-you still must be hooked up to the national power grid, and pay for it even if you are producing and storing all the power you need locally

-you are not allowed to export surplus power (ie, more than you yourself consume) to the national grid

-it is illegal in most jurisdictions to use cost effective solar hot water based on the pretext that it could be an insurance risk (due to potential water leakage/damage)

-zoning rules mandate minimum lot sizes, maximum building heights, and impose huge setbacks so urban spaces consume large (and unnecessary) amounts of land relative to the amount of buildable area, making ownership unaffordable unless, of course, you have access to unlimited amounts of capital at a negative cost (ie, negative interest rate)

-more than half of all new development is inside gated communities where work-from-home, coach houses, in-home suites, backyard maker spaces/workshops, storage sheds are banned (you are not even allowed to keep your garage door open longer than it takes to, say, load/unload groceries…)

-demand for smaller, better homes, and apartments is frustrated by snob zoning rules, which mandate minimum home and apartment sizes

-collecting rainwater and reusing grey water is illegal in many jurisdictions 

-realty taxes are based on improved values so higher density development and redevelopment are disproportionately impacted thereby making it almost impossible to produce affordable housing

-realty taxes on rental apartments are about three or four times what is levied on single family homes in most jurisdictions (it’s comparable to what is charged on commercial assessment) so tenants pay disproportionately more to run cities than folks living in privileged walled communities

-many urban dwellers live in places where backyard chicken coops, fish farms/ponds and food cultivation are prohibited

-if you do have a spare room or granny flat, many cities insist that you only rent them to related persons

-virtually every village, town and city on the planet levy hefty development charges to “pay for off-site infrastructure” even when there is none (as in the case of infill development)—it’s simply another tax, and another way to keep out less, well-capitalized entrepreneurs

-sidewalk sales, street parties, organized tree planting, ride sharing, natural gardens, bathrooms accessible from outside, outdoor Christmas lights, lemonade stands, public oration, scooters and motorcycles, backyard camping, guest stays of less than 180 days, feeding homeless persons, irrigating in a way that a passerby could use to get a drink of water, furniture in the public room (ie, a bench that someone might sleep on), being barefoot in public, street hockey and other games played on public roads, commercial signage, outdoor music, public Halloween trick or treating, using any part of your property for agritainment, bingo or fortune-telling nights, having more than one door facing a street, dumpster-diving or sorting through trash cans not your own, purchasing anything secondhand, door-to-door sales, restaurant patios, basement excavations/exploiting subterranean rights, parades, flea markets… are all banned.

Thus, anything that helps a new entrant pay his/her mortgage by “animating” the place (enhancing its revenue and value) is prohibited. Even Habitat for Humanity has (for several generations now) been prevented from building homes that include any sort of secondary suite or maker/office space, which means their goal of “giving people fishing rods (ie, potential new income streams) instead of just giving them fish (houses)” has been frustrated.

Of course, existing properties are grandfathered/exempted so equity lords can beat you in two ways—their financing costs are lower than yours and their revenues much higher. Over time, these factors together with access to more leverage (debt), again at much lower (ie, negative) cost plus severe restrictions on new supply[2] are unbeatable—so generation after generation more property is coming to be owned by a smaller and smaller number of people.

At some point during this convo, Jenna used Tom’s field to read a Simone Weil quote to him. It turns out that Ms Weil is also one of Tom’s favorite thinkers, and he lets Jenna know that.

The quote Jenna uses to disparage a nomenclature she refers to as “bureauaristocraps” (quite a mouthful—try saying it quickly three times in succession—bureauaristocraps, bureauaristocraps, bureauaristocraps) who have brought down on the general population a “bureauapocalypse” goes like this:

“Whether the mask is labeled fascism, democracy, or dictatorship of the proletariat, our great adversary remains the apparatus—the bureaucracy, the police, the military. Not the one facing us across the frontier of the battle lines, which is not so much our enemy as our brothers’ enemy, but the one that calls itself our protector and makes us its slaves. No matter what the circumstances, the worst betrayal will always be to subordinate ourselves to this apparatus and to trample underfoot, in its service, all human values in ourselves and in others.”

Simone was a French woman who became a Christian mystic, a philosopher and social activist. She died in 1943 at age 34 in London where she was working for the Resistance (trying to convince Charles de Gaulle to let her return to France as a covert agent) and writing her final book, The Need for Roots.

In that work, Ms Weil set out a framework for post war reconstruction of France once victory over Germany was achieved. While she was a strong defender of human rights, Simone also felt it was equally if not more important to recognize that individuals have obligations, not only to their fellow human beings but also to their community without which people become self-righteous and self-absorbed. In her mind, obligations trump rights since, if there is only one person in any society, s/he would exclusively have obligations since that individual could not, by definition, grant herself or himself any special rights…

She passed away due to tuberculosis or cardiac failure or self-imposed starvation… the cause of her death is unclear. What is clear is that she suffered acutely from the deprivations her compatriots in occupied France faced at the hands of Nazi Germany.

The tyranny imposed by bureaucrats in modern nations (which Ms Weil would certainly have been suspicious of) is made worse by the reality that equity lords control most of the banks as well as secondary lenders who’ll provide entrepreneurs with high interest loans to get projects started. When they fail to service their debt, foreclosure rights built into legal agreements allow lenders to take ownership of those properties; that is, they’re not sold, they’re “bought” for the cost of their debt plus legal fees, wiping out whatever equity the original owner had invested/built up in them. Then equity lords arrange replacement of all that high cost debt with negative interest rate loans sourced from the very people they’ve foreclosed on plus all their tenants and, indeed, from every bank client who deposits his/her paycheck, savings or other income there.

Periodic busts are just the thing for not only repossessing homes and other property, which they’ve already funded, but also for foreclosing on distressed property on which they did not originate loans, often at prices much less than their debt. This is what, for example, allowed New York-based, private equity firm Blackstone Group to amass a US portfolio of 50,000 single-family homes in just four years—following the Great Reset of 2008-2012[3].

After acquiring property in whatever manner is most cost effective, equity lords and their property managers are encouraged to make their buildings as inefficient as possible because there is a financial incentive for them to do exactly that—they charge their residential and commercial tenants an administration fee (usually around 15% to 25%) on all utilities, repairs and maintenance so the higher their costs are, and the more often things break down, the more money they make.

Since they also own or control all or most of the firms that service their properties, they make money coming and going.

The correlation between parents’ wealth and education, and the economic success of their children is about twice as high in the US as it is in its major trading partners[4], which means picking the right family to be born into in America (in what is known as the “birth lottery”) matters a great deal. Upward mobility and the idea that you can pull yourself up by your bootstraps is now nothing more than a quaint Horatio Alger, Jr fable.

19th century political economist John Stuart Mill said, “Landlords grow rich in their sleep without working, risking or economizing,” a view proudly and loudly shared by Jenna, and now (but more quietly) by We Camp’s current CEO. In fact, in Jenna and Tom’s opinion, landlords make sure they grow richer while they sleep by manipulating the zoning system to exclude the possibility of any rivals arriving in a neighborhood near you any time soon.

“No Mister Hatch! Fry mah hide!” responds Jenna. “Eff’n they was gov’ment run, them pecker-woods’d jest squan’er o’ steal th’ money.”

Jenna does not agree with what she thinks is Tom’s apparent take that public ownership and management is superior to the alternative. In fact, both of them are on all sides of this argument at different times. In entrepreneurship and life, ambiguity is everywhere, and what works and what doesn’t can and does vary depending on context.

Neal Stephenson said it best in the Diamond Age; it’s worth repeating here:

“The difference between stupid and intelligent people—and this is true whether or not they are well-educated—is that intelligent people can handle subtlety.”

“So you’re OK with them being in private hands,” Tom replies, “just not the ones that currently own and run them? Isn’t that what George Orwell’s Animal Farm is all about—you’d just replace one set of overlords, namely farmers, with another, being pigs?”

“Mebbe. But th’ folks who live in them communities sh’d benefit too. Whut fo’, whuffo’ not? They sh’d all’s be gittin’ a monthly royalty payment. They is puttin’ up wif all th’ extry traffic an’ th’ dumbass tourists, an’, ennyway, it be part of their heritage too…”

“I’ll buy that, Jenny. Cool idea.”

“An’ th’ neighbo’s sh’d haf a say in how them corncesshuns is run; them being mostly helter-skelter.”

“What do you mean ‘helter-skelter’?”

“It’s ridik’lous, Tommah. They’s added fake snow t’Mount Fuji. They’s field junerated crap fo’geries fo’ th’ exterio’ of th’ Colosteum, th’ Parthenon an’ th’ Acropolis. They’s put a nose back on th’ Sphinx, for Christsake. They’s been field junerating missin’ seckshuns of th’ Great Wall. Shucks, th’ leanin’ tower of pizza don’t lean no mo’e! It ain’t our real natural heritage, no way. It all be a sham—shameful inough t’makes yer ass itch.”

Tom loves her endless supply of earthy southern slang.

He’s willing to call it a day, but she’s wound up and not ready to quit yet.

“Thar’s an old Arab provahb, Tommah, thet goes sumpin like this: money yo’ doesn’t spend is not pow’ful yourn.”

“I don’t get it, baby?”

“Eff’n yo’ spend $10 on a meal, it’s yourn f’’evah cuz yo’ ett it. Eff’n yo’ save thet $10, when yo’ pass, fine, it ain’t yourn.

“Thet’s whut happens wif old money—it jest sits aroun’ not doin’ much. Noo money an’ money in th’ han’s of pore folks wawks much harder on this hyar life trip, mister Hatch.”

“So where does our trip end?” Tom asks, not really referring to how money works in this life or what the end of the universe might someday look like.

Jenna takes his question at face value, still not wanting to talk about her future with Tom at that point in their relationship: “Star fushun an’ distribushun of temperature will eventually, a mighty long time fum now, cause an increase in intropy resultin’ in heat death fo’ th’ universe.”

“Heat death?”

“It ain’t all bad, Tommah,” she says.

“It sounds pretty bad.”

To rebut this, she kneels naked in their bed facing him, places her arms akimbo like she’s a little girl back in grade school getting ready to make a presentation, and rhymes:

Heat is work, and work’s a curse,

and all the heat in the univurse,

is gonna cool down.  ‘Cause it can’t increace,

then there’ll be no more work, and there’ll be perfect peace.

That’s entropy, man[5].

Tom laughs.

“Perfect peace? No work? Sounds horrible.”

“Money, se’f interest, th’ invisible han’, skill sharin’, specializashun, all’s better than them alternatives, Tommah, in terms of allocatin’ th’ surplus in our society an’ avoidin’ th’ sploitashun thet Karl Marx was so caught up by,” Jenna says more seriously, lying back down next to the man, embracing his body with hers.

“What alternatives were you thinking about?”

“Dickato’s, kin’s, queens, democraptcy, theocraptcy, socialism, communism, Marxism, communalism, mayo’s, presidents, prime ministers, premiers, co’po’atism, libertarianism, fascism, kleptocraptcy, autycraptcy, bureaucraptcy, oligarchies, monopolies, charities, statist, utopianism, feudalism, peckin’ order, bullyism, friends of th’ boss, th’ mob or gangstas, th’ in-crowd, th’ coolest kids, nihilism, anarchic, th’ nomenclature, tribal chiefs, serfdom an’ slavery, banksterism… all of them is co’rupped.”

“What’s banksterism, Jenny?” Tom asks having heard the term a couple of times in the last five minutes.

“It be rhymin’ wif gangsterism.”

Tom still looks doubtful.

“As in, ‘who put th’ douche in fiduciary’, Tommah.”

“Ok, alright, I know where you’re going with it. But it’s a long list of what doesn’t work. What will?

“How about the Federation? Would that be workable?” Tom needles her, knowing she and her dad are crazy Star Trek fans.

“Only in th’ series, Mister. Ah ain’t hankerin’ a bunch a old min decidin’ mah future neither.”

“But isn’t the invisible hand—people acting out of self interest—the thing that got us into this jam in the first place?”

“It ain’t thet, Tom, dawgone it. Thet’s pure natural behavio’. It’s thet we set th’ table all wrong, acco’din’ t’ th’ code o’ th’ heells! Only a few of us git t’eat. It’s not equality of outcomes thet we’s a lookin’ fo’. It’s equal access t’all them oppo’tunities fo’ larnin’ an’ arnin’. Give us equal access t’negative interess rates an’ full fundin’, we’s a gonna show ‘em whut we’s kin does.”

“You’ve pretty much crossed everything off the list, girl. So how should humans organize themselves then?”

“Yipper ah has, but this thin’s got a lot of arms an’ legs and  yo’ fo’got one thin’.”

“What’s that?” he asks fascinated by her views.

“Dollars is democrats.”


“Dollars is democrats,” she repeats. “Ain’t nobody care these days whut yo’ religion is, yer colo’ is, yer race, whether yo’ male, female o’ th’ opposite sex, non-binary transjunder, an’rogynous, junder fluid o’ whutevah, eff’n yo’ gots th’ money, yo’ git th’ honey.”

“Like I got you, babe?” Tom asks nudging her.

“Mebbe,” she answers.

[1] For example, UC Berkeley construction management professor William Ibbs reports it took 23 years to complete environmental reviews and acquire permits and other approvals to replace the San Francisco-Oakland Bay bridge after it was mangled in the 1989 Loma Prieta earthquake. Somehow, the 1995 Caltrans (California Department of Transportation) estimate of a reconstruction construction cost of $250 million transmogrified into an actual price tag of $6.5 billion by the time the new bridge was ready in 2013. Source: Remaking the San Francisco-Oakland Bay Bridge, UC Berkeley planning scholar Karen Trapenberg Frick, Routledge, 2016.

[2] Equity lords and their lapdogs within city hall and its planning staff use an endless series of requests for phony environmental studies and community design plans to derail/restrict supply of new lands for development. As comedian Dennis Miller once said, “An environmentalist is someone who owns a cabin in the woods. A developer is someone who’d like to build one.”

[3] Blackstone takes its single-family rental bet public as sector soars, Diana Olick, CNBC, February 1, 2017.

[4] For example, Garnett Picot and Feng Hou in their article, Seeking Success in Canada and the United States: The Determinants of Labour Market Outcomes Among the Children of Immigrants (Social Analysis Division, Statistics Canada, March 2011) reported that intergenerational income elasticity in Canada is 0.27, about which they concluded: “(it is) a relatively low correlation. This correlation is roughly twice as high in the US as it is in Canada. This means that earnings mobility is greater in Canada than in the US.” A big part of the reason is that education and healthcare are more accessible and affordable there, which also frees up income to become property and business owners/founders, additional keys to earned economic success.

[5] By philosophers Flanders and Swann.

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
Real Estate Investment and Business coach
ROYAL LePAGE Performance Realty broker
Ottawa Senators founder


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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.