I mostly agree, but I do think there is a role for local government to play, as local governments tend to have more access to local information. But local government should not have the ability to be exclusionary. In other words, the state should decide how much housing, office, etc. cities must allow to be built, and cities can choose where to put it, as well as establishing reasonable height limits and so forth as long as they actually zone for the amount of building the state has mandated.

In theory, this is how the system is supposed to work here in California. We have the statewide Regional Housing Needs Allocation, which is a kind of statewide zoning that sets targets for cities, which can then zone as they want to meet those targets. Unfortunately RHNA is not enforced, and there are too many loopholes that let cities circumvent their legal obligations. The Housing Accountability Act closes some of those loopholes, but not enough. :(

> Japan, which has a national zoning law, is the right model. In our system, we'd apply it at the state level.

I agree with you on this, however, Japan regulated AirBNB because renting a room for a short period of time is a pure commercial activity and not allowed in Residential areas.

I like to imagine there is this magic wall between properties where nothing ever crosses over and in that situation we could somehow allow an absolute property rights sort of thing.

The catch is that it just doesn't work that way.