February 20, 2018

Q&A: Why Local Policy Matters with Salim Furth

Chad Reese

Managing Editor

Last year, Salim Furth made a bold prediction: “The socioeconomic evolution of the United States in the twenty-first century will be heavily determined by the power of two local institutions: the zoning board and the school board.”

Why it matters: That view, which echoes work done by a wide array of public intellectuals ranging from Robert Reich to David Brooks, is based on Furth’s view that members of America’s upper middle class have unintentionally shaped their communities in radical ways. The evidence of that change is most apparent in consistently rising property values and the exclusivity of certain high-quality public schools. Zoning boards and school boards create a public policy “knot” that can make reforms to either nearly impossible.

In Furth’s words, “The school board protects the zoning board from pressure to change, because there is no majority in favor of opening up a high-quality school system to lots of new entrants. The zoning board protects the school board from pressure to change, because radical educational reform is a risk to the suburban home values that constitute so much middle-class wealth.”

Furth recently joined the Mercatus Center as a Senior Research Fellow, and, below, responds to questions about his forthcoming work, and about the challenges and opportunities in the field of urban economics.

Q&A with Economist Salim Furth

In one sentence, how would you describe your research portfolio?

I want to figure out which aspects of economic life are most important to people’s lives and to describe and understand those things.

You have a background in macroeconomic policy, and many economists in the Washington, DC area prefer to focus on broad, national, or international economic research. Why did you decide to focus on more local policy issues?

Traditional macroeconomic policy is too crowded – it’s difficult in that environment to offer a unique contribution. I can make a greater contribution as an economist by understanding the local and regional foundations of important macroeconomic trends. I stumbled into working on the impact of local land use regulation because my back-of-the-envelope calculations indicated that those regulations might be costing typical households more money than a dozen high-profile federal regulations combined. When you consider that housing is 20 to 35 percent of most families’ budgets, that isn’t so surprising.

You’ve written a lot about zoning boards and their economic effects on urban areas. Why are zoning boards so important, and how have they become so powerful?

Zoning boards have an astounding latitude to define the extent of private, real property rights. Most urban and suburban localities have followed a “permission slip” approach to property use: they implement unrealistically strict land use rules, but then allow the zoning board to hand out exemptions – “variances” – on a case by case basis. So much economic power should not reside in so few hands.

You’ve used the phrase “anti-growth” land use before. What does “pro-growth” land use look like?

Cities, like families, are always rising or falling in America. The delusion behind anti-growth land use policy is that the past can be permanently frozen in place. But without investment and adaptation, places decay. Pro-growth policy embraces this organic view of cities and suburbs and welcomes new investment and new uses of land. In practice, that means giving proprietors the benefit of the doubt in regards to improving their own land, with regulations focused on accommodating and including a diversity of uses rather than choosing a few and excluding others.

Isn’t it true that, at least in some cases, preserving the local character of an area or neighborhood is worth putting off some development? Where should state and local policymakers draw the line between development and preservation?

Local character is very important, but it gets flipped around backwards in local land-use debates. Zoning forces conformity to a near-universal standard, which is why the strip malls and exurban developments look basically the same from Phoenix to Tampa to Columbus. Local character, to me, connects a specific group of people to a specific place. That cannot usually be built up from scratch – it has to evolve over time as people form natural social associations and develop attachments to the feel of their own place. The present practice of American zoning freezes many places at an early stage of development instead of allowing them to evolve and develop strong local character.

Give us a preview of some of the research topics you’re planning to explore in the near future.

Life is literature review. What I’m really passionate about is reading and learning what others have done first – and when I can summarize, add, or synthesize in a useful way, all the better.