Deed Restrictions

Two of the stated purposes of zoning are preventing “incompatible” land use 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.

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.

Many see no difference between zoning and deed restrictions. 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 home, he can purchase a home with less restrictions. Deed restrictions respect property rights allowing individuals to act on their own judgment, rather than being forced to act as government officials decree.

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 they 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, not non-owners and government officials, were able to use their property as they thought best.

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 nearby, property owners believed that the area had more valuable uses.

Interestingly, many areas of Houston do not have deed restrictions and commercial uses exist in close proximity to homes and apartments. While this decreases 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 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.

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