Land-Use Regulation

Land-use regulation is a major function of virtually every government in the world. It raises many issues for classical liberalism. This chapter provides an overview of three of the most important areas of land-use policy: the use of eminent domain to forcibly take property for government-approved projects, regulations that restrict property owners’ use of their land, and the relationship between property rights in land and migration restrictions.Section 2 covers the use of eminent domain to take private property and arguments for its limitation to genuinely “public” projects, as opposed to coerced transfers between private owners. Unconstrained use of eminent domain is a serious threat to property rights and hampers economic development.Section 3 considers regulatory restrictions on land use that do not involve physical occupation of property. There is a long-standing debate about the value of such restrictions and whether the government should pay owners compensation. The most significant regulatory restrictions of this type in many nations are zoning rules restricting housing construction.Finally, Section 4 provides a critical overview of property rights rationales for restricting mobility, particularly in the form of international migration. Such theories justify severely constraining the liberty and property rights of both migrants and natives.