Two of the stated purposes of zoning are preventing “incompatible” land uses and protecting neighborhoods. Both of these issues can be addressed without the coercive means of zoning. Deed restrictions (or covenants) provide the means to limit land uses through voluntary, contractual means—by respecting property rights, and hence, preserving the freedom to choose.
Deed restrictions attach to the deed for a parcel of property, and thus become binding on subsequent purchasers of the property. Deed restrictions can be used to establish land use requirements, such as establishing minimal home sizes and architectural features. Many subdivisions use deed restrictions to prohibit commercial activities within residential areas, establish landscaping and maintenance policies, and set similar standards.
Many see no difference between zoning and deed restrictions. Indeed, when Houston last debated zoning in the 1990s, zoning advocates frequently equated zoning and deed restrictions. However, zoning is mandatory and coercive, while deed restrictions are voluntary and contractual. If an individual does not like the deed restrictions attached to a particular property, he can purchase a home with less restrictions or no restrictions at all. Deed restrictions respect property rights by allowing individuals to choose for themselves what kind of “neighborhood protection” they desire, rather than being forced to accept the standards imposed by government officials.
Unlike zoning, most deed restrictions contain provisions for amending or even abolishing the covenants. Thus, the property owners who are party to the contractual agreement with their neighbors have the means to make changes to what is prohibited or required. As an example, one neighborhood in Houston—Lamar Terrace—voted to abolish their deed restrictions to allow commercial development after the property owners concluded that their land was more valuable for that use, rather than the single-family homes the covenants required. The property owners in the neighborhood were able to act without first seeking the permission of government officials and endure the objections of non-owners.
As a result, deed restrictions allow both developers and property owners to quickly respond to changing market conditions. Lamar Terrace had originally been a suburb of Houston when it was built in the 1950s. But as the city expanded, and particularly after the construction of The Galleria (a large shopping mall) nearby, property owners believed that the area had more valuable uses. Deed restrictions allowed them to act on that judgment. Under zoning, they would have been forced to beg for permission from bureaucrats and politicians, as well as endure the protests of anyone who objected to their desire to change land uses.
Interestingly, many areas of Houston do not have deed restrictions and commercial land uses exist in close proximity to homes and apartments. While this tends to decrease the property values of homes, it also makes homes more affordable in those areas. Houstonians have choices—deed restrictions and higher housing costs, or no deed restrictions and lower housing costs. Each individual is free to choose which type of neighborhood and protection best meets his needs, desires, and budget.
In most communities, deed restrictions are enforced by a homeowner’s association (HOA). In contrast to the almost unlimited powers of zoning officials, the HOA has very specific and limited powers. In short, the difference between deed restrictions and zoning is the difference between voluntary choice and coercive imposition, between the private agreements of individuals and the dictates of public tribunals. It is the difference between respecting property rights and their wholesale violation.
Thus, deed restrictions give property owners the freedom to prohibit “incompatible” land uses and the means to protect their neighborhood, while simultaneously respecting the freedom of others to choose differently.