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With increasing frequency commentators have been urging greater reliance on the market mechanism to allocate resources in a variety of fields. There has been relatively little examination, however, of the extent to which decentralized mechanisms can be used to handle the controversial social problem of conflicts among neighboring land-owners. Land development in urban areas is one of the most regulated human activities in the United States. In recent decades, public regula- tion of urban land has increased sharply in incidence and severity, but dissatisfaction with the physical appearance and living arrangements in American cities continues to grow. Despite the evident shortcomings of present public regulatory schemes, even those commentators who propose reliance on the market mechanism in other areas tend to concur with the prevailing view that increased public planning is the most promising guide for the growth of cities. This article advances a different thesis: that conflicts among neighboring landowners are generally better resolved by systems less centralized than master planning and zoning.
First, the article offers goals for a land use control system. Three major means of control are then evaluated in terms of these goals: (1) mandatory public regulations (zoning), (2) consensual private agreements (covenants), and (3) the redefinition of property rights and their private enforcement (nuisance law). Finally, the article explores how these methods, and others, might be interrelated to produce a more efficient and equitable system for guiding urban growth. The analytical approach, and the substance of the conclusions, have been heavily influenced by Professor Guido Calabresi's groundbreaking work in analyzing accident law.
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