So, I am having trouble with the idea that the land, not the house is where all the value. Obviously it's partially true. But even within my small neighborhood in a city with fairly regular lot sizes. There are houses that come up for sale and plots and of land. The plots of land are MUCH cheaper than the plots of land that also have a house on them. More importantly, the cost premium of the lots with the houses on there are far great than the cost of building a average house on those pieces of land if you already owned it.
Simone Biles has nothing on the mental gymnastics Republicans routinely perform to somehow make “don’t tread on me” objections to regulation ideologically consistent with objections to ADU legalization. And they stuck the landing! I’ve always laughed at the “destroying the suburbs” argument because it’s another way of suggesting your neighbors will definitely show poor judgement as landlords. For the record, the correct response is to be insulted.
Republican two-facedness aside, the objection to YIMBYism isn’t just a matter of semantics, or risk aversion or historical perspective. I’m not saying it’s a sane or just way of building and storing wealth, but there’s nevertheless a significant amount of wealth stored in housing.
For that reason, the distinction between home ownership and land ownership is academic in the context of YIMBY objections. Due to the scarcity of housing, so many people are forced to spend a lot on objectively “meh” land just to own a home. The commodity they’re invested in is scarce housing, and any net increase in the supply of housing threatens that investment.
“but the evidence is overwhelming that homelessness is more common in places where housing is scarcer.”
Is it possible that we’re switching the cause and effect here? Scarcity is a function of high demand as well as low supply. And locales in high demand are bound to be objectively desirable in some way. And if you’re homeless and will pay the same housing price wherever you choose to be unhoused, will you not then choose the objectively desirable place?
This is one of many parts of the homelessness crisis that Republicans get wrong. They blame blue state programs for creating homelessness crises, but homeless people aren’t in California instead of Mississippi because of California’s laws and entitlements. They’re in California because even someone with nothing knows they have nothing to gain by being in Mississippi rather than California.
Regarding the "political economy problem with Georgism", to the extent Georgism means a single land-value tax that collects 100 percent of rents, I agree. It would distribute wealth from (majority) American homeowners to the minority who don't own land, and it would be particularly burdensome because most Americans don't generate liquid rents from a tenant they could use to pay the tax (owning land just means living in their homes rent-free).
But what if we only replaced existing property taxes and set the rate to be revenue neutral? This is still redistributive (otherwise we haven't actually changed anything), but now in a more populist (read: politically feasible) way. Now, the flow of wealth isn't from landowners to non-landowners but from those with high-value (especially unimproved) land to those with high-value assets on low-value property.
This seems like it would incentivize exactly what 1M Americans advocates for: fewer parking lots in downtowns, single-family homes near mass transit stops, run-down apartments, etc. None of which are on the type of land owned by most Americans.
Instead of giving a windfall to existing RPP holders, just auction all the RPPs so the city can reap the benefits - otherwise I like your proposal. And then if a project will create or remove a street parking space, the developer must buy (or be granted) an RPP so the ratio of spaces to RPPs stays in balance.
I personally live in a large townhouse in a sixplex right next to two very large historic SFH. My townhouse is significantly more affordable than the neighboring houses, and it’s not just because they are larger. My house is currently estimated at $150 per square foot, while the sfh next door is estimated at $170. Also, my house is much newer (1986) than the SFH (1912).
I also think we need to take into account the incentives of local governments. I don't know if this is at all relevant to DC or large cities, but for many states rich towns have an incentive to keep land prices as high as possible.
Most municipalities get most of their revenue from property taxes. Richer municipalities tend to have much lower property tax rates, while also having much higher spending per capita, and there is a reason for this.
If you live in a town with only rich people then you can have a low tax rate that still brings in a huge amount of money. But if you are one of the wealthier people in town then you will end up picking up the slack for those who aren't as wealthy. But if you can exclude them, then you can maintain lower property taxes with high spending per capita.
This is why so many towns resist the building of homes below the average price that already exist. If a one $1,000,000 lot subdivides into 2 $600,000 lots that does increase the land value, but it reduces the per capita tax revenue by 40%. That will either result with tax rate increases or a decrease in quality of municipal services (education, police, road maintenence and ect.)
Exclusionary zoning is rational for local governments if they are funded this way. Fixing this would require a massive change in the way localities are funded.
It's late in the day so this comment won't get many eyeballs, but it feels like there are a few gaps in the logic here. (For the record, I'm very sold on YIMBY-ism for the greater good, though largely unaffected in the 'burbs).
1. The value of a home (separated from the value of the land) will depreciate over time in most circumstances except for the one where home construction is supply-side limited, either through bottlenecks or regulations. My 2-year-old car is worth more now than what I paid for it new despite its deteriorating physical condition simply due to supply-side constraints. This seems like a point for NIMBY-ism, in a messed up way- make it harder to build and the existing housing stock goes up in value.
2. The value of the land is derived from more than just the potential financial benefit from what you can build on it. The land's proximity to other people/places/things is a major factor, as is the scarcity of available land nearby. Again, NIMBY-ism theoretically benefits landowners here too- "character" makes a space's land more valuable, and requirements for parking and setbacks means you need to buy more land to build the same vicinity. Supply of land is not going up, demand will drive up its value.
Again, I'm very YIMBY, I just don't think it's cut-and-dry win-win for homeowners even if you assume they only care about their property value going up. (And to David Abbott's point, lots of people would prefer their property value NOT go up.)
A big part of the NIMBY discourse is the cultural distaste for the "evil developer". There are countless tropes and old movies of evil developers doing dastardly things, from the Goonies to Up the developers are portrayed as evil.
I think that these issues require a "good guy vs. bad guy" narrative. Recently some YIMBY's have tried to make homeowners the bad guys in this narrative. That is both factually wrong, and it is a massive political loser, so I am glad that Matt is pushing back on this narrative.
But we still need a "bad guy" for this narrative. I see two decent targets.
1. Incumbent landlords. People who own property who are renting it out do not want to see the development of new property. They like the high rents they are able to charge, and more competition will make it harder to maintain those rents. Many landlords are at the center of NIMBY debates, they want to develop their own properties but block their competitors.
2. Hedge Funds buying existing apartments/homes. Some of these funds explicitly outline their strategy as buying homes in heavily zoned areas where they are confident they won't face much future rental competition.
Invitation Homes tells its investors, “We operate in markets with strong demand drivers, ***high barriers to entry***, and high rent growth potential.”
These firms also have an incentive to encourage the continuation of those zoning policies.
I think that the critique of landlords is truer and has more evidence behind it, but the hedge funds are a much better villain. The main problem with using hedge funds as the villain is that there can be narrow solutions to block them that don't solve the real problem.
One of the other big problems hedge funds and other "outside" landlords/developers bring is that their activity sucks income out of local economies. If Invitation Homes own your Boise rental home, your rent doesn't go to a local Boise landlord, it goes to Dallas, and then to shareholders. A lot of people are paying 50% of their monthly income for rent; if that rent is leaving their hometown, thats a nightmare for the local economy.
If you upzone a small area, it will raise prices if the new use is valuable. But if you upzone a very large R1 area that's still desirable for R1, it won't raise single family house prices, because virtually all buyers would still intend to buy the house and live in it, and other buyers would be competing against those buyers.
California upzoned the entire state to allow ADUs in (virtually) all residential areas. There's no evidence that the upzoning has had an effect on prices. That's because most buyers don't want to build an ADU, so the small minority of buyers who do want to build an ADU have their pick of all the houses on the market, and don't have to pay more for ADU permission.
If Washington DC upzoned Matt's small area for ADUs, it would make his leaky garage more valuable. But if all of DC, and Virginia and Maryland, allowed ADUs, it wouldn't change the value of his leaky garage: a potential ADU builder could buy his house/garage, or any other property on the market, for their ADU project.
It’s true that houses do not gain value. A house will never be as functional and fashionable as the day (before) the first owner moves in. But it seems that Matthew is arguing that land (as opposed to housing) does increase in value, as he shows us the Case-Shiller U.S. National Home Price Index chart, which slopes upward. That’s not really true either. Land prices go up where population increases, especially near natural beauty or high-paying industries, causing, for example, large price gains in much of California over the last few decades.
But there were correspondingly steep declines in Detroit and the surrounding rust belt, where population declined. I grew up in Indiana, near towns that made tires, transmissions, car radios, and other car parts. Our house and the land it sits on decreased in value (accounting for inflation). As manufacturing moved overseas and agriculture became less labor-intensive, people moved away from industrial and rural areas into cities and suburbs. Large parts of the Midwest, South, and rural areas such as the Dakotas have lost population, and land value.
Over time, the price of “housing” (land and the structures on it) roughly keeps pace with inflation, but the price charts fail to capture the very high costs of maintaining the structures (repairs, roofs, appliances, utilities, flooring, remodels) and the land (lawn maintenance, landscaping, taxes). Generally speaking, we own houses not because they are good investments but because we like the freedom and autonomy they offer. Barring extreme circumstances, no one can evict us, and we can paint the walls a color we like.
Matthew writes, about adding ADUs, “[S]ince most people own homes they will oppose efforts to make housing cheaper and the whole thing is impossible. But recall that the reason taxing land value is hard is that most people own land, and they don’t want the land to get cheaper.” Roughly 65% of Americans own their homes, but a significant minority of these homes are condos or townhouses. While these owners technically (sort of) own land, there’s nothing they can do with it, and, in the case of a 500-unit high-rise condo building, each owner can claim only a few square feet or inches of the land. I like to see this land appraised as low as possible, because I am taxed on it.
To his credit, Matthew explores a range of incentives for and against regulation, but ignores all-important behavioral factors. We’re not supposed to say it, but people who have been less effective at managing their finances are also generally less effective at managing their surroundings. I own a condo with very strict HOA rules governing what residents can put on their patios and decks: no bicycles or other storage items allowed. Only approved patio furniture. No outdoor lighting allowed except a footlight. Even holiday lights are strictly regulated.
A few hundred yards away, there is a high-rise in which a number of units are dedicated to low-income housing. The decks are full of bicycles, trash, baby carriages, rusted charcoal grills, and other unsightly items. While theoretically we could have low-income units with high standards for maintenance and community aesthetics, in reality it wouldn’t work. The policing would be prohibitively expensive, and any attempt at accountability (fines, evictions) would be met with political outrage and cries of racism and other popular -isms.
While theoretically land-owners and renters could both benefit economically from looser regulations, in practice, “affordable” ADUs would probably lead to declines in quality-of-life for current residents, making neighborhoods less attractive and less safe, causing current owners to flee to better neighborhoods, ultimately reducing the land and housing value for all owners.
I live near Denver, where some relatively recent policy decisions to decriminalize drugs and reduce policing have led to skyrocketing crime and homelessness. After decades of an ambitious “infill” project designed to bring residences and visitors to the city and its sidewalks (by requiring new buildings to offer ground-level retail or restaurants, for example), the city suddenly feels empty and dangerous. Many businesses and restaurants are closing, and relatively new high-rises are offering reduced rents and move-in incentives. Good neighborhoods are valuable, and they take a great deal of attention and commitment to remain good.
Part of the NIMBY syndrome arises from cities not charging for parking on residential streets. Streets are a scarce resource and if people treat them is "free." problems emerge. [This is the exact problem of CO2 emissions. The capacity of the atmosphere to absorb CO2 without harm is limited (scarce), but emitters treat it as free.]
Street parking could be metered and some of the revenue devolved say through a credit against property tax be devolved to the homeowner which they could use to pay for parking in front of their homes if they chose to do so. This would probably work best if all city meters were embedded in a dynamic fee setting system.
Since, as MY correctly points out, the balance of political power rests with homeowners, I appreciate his efforts to couch arguments for upzoning in terms that at least try to engage homeowner interests and concerns. I especially appreciate the thoughts on parking -- it's important to residents!
It would be even better in the future if he doesn't accompany this with tossed-off comments on Twitter and the like that it would be just fine to build massive apartment buildings next to single family homes. That's a pretty quick way to alienate your target audience.
“ A house, where the owner of the house would have full rights to everything but would need to pay a monthly rent to the landowner.”
“ Well, the former is something you might buy if you needed a place to live, but would clearly be a terrible investment — all the risk is on the downside.”
Isn’t this the standard operating procedure for UK real estate? There’s a leasehold, I’m not sure how it really works but someone else normally owns the land AFAIK, and the price of the housing changes depending on how much time is left in the agreed in lease.
“ Beyond that, even if I would never personally take advantage of the right to expand the size of my house, merely having the right to do so would increase the value of the home in the event that I sold it.”
I see left commentators zeroing in on this to rebut the idea that upzoning and liberalizing land use restrictions will lower costs. They see it as a giveaway to owners and developers, and it’s sort of true! The land value does increase. So it’s more complicated to demonstrate just how much multi family housing has to go on that more valuable land to bring overall home values down.
I like the street parking suggestion at the end. I also think, more generally, that Shoup-loving YIMBYs need to abandon their dream of eliminating off-street parking, and instead advocate for requiring developers to *build* off-street parking - but to give priority for those parking spots to the neighbors so as to buy them off.
Let me spell this out a little more. The ideal policy would be to have no limits or requirements on height, density, setbacks, FAR, or anything else - but that is highly unlikely to happen. So we'll take as given that some limits on by-right construction are going to be in place.
What I might suggest is a law giving builders a right to exceed limits on height, density, etc. *if* for X sqft of residential space above the limit, the builder provides one off-street parking space to any SFH owner who lives in the house, whose house is within a Y-foot radius of the property, and who does not already have off-street parking of his/her own. Perhaps the building owner could be allowed to charge some nominal rate for the parking space, but it would be a submarket price. The builder would not be required to add off-street parking for the residents of the building itself.
This won't make everyone happy, but it should. The builder gets to add more sqft. The neighboring SFH owners get free or cheap parking spaces within walking distance of their houses. The parking spaces do not displace sqft that otherwise could have housed people, but are created "out of thin air" since they come from exceeding the density limits that would otherwise be in place. Everybody wins.
Did you mean "any SFH owner who lives in the neighborhood"? I hate that cities are forced to bribe existing homeowners with parking, but it might nevertheless be a workable solution. In some cases. Mostly, though, the SFH owners have plenty of off-street parking, but they object to people other than themselves parking on the street.
I just garbled the sentence. Read that as "...the builder provides one off-street parking space to any SFH owner whose house is within a Y-foot radius of the property, who lives in the house, and who does not already have off-street parking of his/her own."
The main problem with the proposal is not that it's objectionably bribing existing homeowners, but that it's not bribing enough of them. The other homeowners, the ones who have parking, are still going to object that the residents of the new development are going to park their 47 cars on the street.
No doubt it wouldn't eliminate all opposition, but I think it would make a dent, which in turn would make a difference at the margins. The strongest opposition comes from people who are afraid they won't be able to park their own cars.
It costs $90-100K to build one underground parking space. Developers should not be forced to build parking. If the neighbors want parking they can pay for it.
The Shoup-loving YIMBY's dream has never been to eliminate off-street parking, but to allow the property owner decide for themselves how much off-street parking they need.
To me, the compromise idea where a developer can build as little parking as they want, but with the caveat that residents of their property will *not* be eligible for on-street parking permits, has a lot of appeal. It forces the developer to actually weigh the tradeoffs between easy parking for residents, land, construction costs, etc., without being able to freeload off the public street.
Why are you giving away very valuable city property to existing homeowners? Let everyone pay for it. Should existing city parks and libraries be for existing homeowners too?
I am a Shoup-loving YIMBY but I agree, with sadness, that eliminating off-street parking is indeed a dream. Re "requiring" developers to build off-street parking, ok, but let them determine what the market requires. I think the abundance of evidence indicates that parking minimums work very poorly in practice.
So, I am having trouble with the idea that the land, not the house is where all the value. Obviously it's partially true. But even within my small neighborhood in a city with fairly regular lot sizes. There are houses that come up for sale and plots and of land. The plots of land are MUCH cheaper than the plots of land that also have a house on them. More importantly, the cost premium of the lots with the houses on there are far great than the cost of building a average house on those pieces of land if you already owned it.
OK, thanks for this. I just reread it, & I get your perspective now.
Simone Biles has nothing on the mental gymnastics Republicans routinely perform to somehow make “don’t tread on me” objections to regulation ideologically consistent with objections to ADU legalization. And they stuck the landing! I’ve always laughed at the “destroying the suburbs” argument because it’s another way of suggesting your neighbors will definitely show poor judgement as landlords. For the record, the correct response is to be insulted.
Republican two-facedness aside, the objection to YIMBYism isn’t just a matter of semantics, or risk aversion or historical perspective. I’m not saying it’s a sane or just way of building and storing wealth, but there’s nevertheless a significant amount of wealth stored in housing.
For that reason, the distinction between home ownership and land ownership is academic in the context of YIMBY objections. Due to the scarcity of housing, so many people are forced to spend a lot on objectively “meh” land just to own a home. The commodity they’re invested in is scarce housing, and any net increase in the supply of housing threatens that investment.
“but the evidence is overwhelming that homelessness is more common in places where housing is scarcer.”
Is it possible that we’re switching the cause and effect here? Scarcity is a function of high demand as well as low supply. And locales in high demand are bound to be objectively desirable in some way. And if you’re homeless and will pay the same housing price wherever you choose to be unhoused, will you not then choose the objectively desirable place?
This is one of many parts of the homelessness crisis that Republicans get wrong. They blame blue state programs for creating homelessness crises, but homeless people aren’t in California instead of Mississippi because of California’s laws and entitlements. They’re in California because even someone with nothing knows they have nothing to gain by being in Mississippi rather than California.
Regarding the "political economy problem with Georgism", to the extent Georgism means a single land-value tax that collects 100 percent of rents, I agree. It would distribute wealth from (majority) American homeowners to the minority who don't own land, and it would be particularly burdensome because most Americans don't generate liquid rents from a tenant they could use to pay the tax (owning land just means living in their homes rent-free).
But what if we only replaced existing property taxes and set the rate to be revenue neutral? This is still redistributive (otherwise we haven't actually changed anything), but now in a more populist (read: politically feasible) way. Now, the flow of wealth isn't from landowners to non-landowners but from those with high-value (especially unimproved) land to those with high-value assets on low-value property.
This seems like it would incentivize exactly what 1M Americans advocates for: fewer parking lots in downtowns, single-family homes near mass transit stops, run-down apartments, etc. None of which are on the type of land owned by most Americans.
Instead of giving a windfall to existing RPP holders, just auction all the RPPs so the city can reap the benefits - otherwise I like your proposal. And then if a project will create or remove a street parking space, the developer must buy (or be granted) an RPP so the ratio of spaces to RPPs stays in balance.
I personally live in a large townhouse in a sixplex right next to two very large historic SFH. My townhouse is significantly more affordable than the neighboring houses, and it’s not just because they are larger. My house is currently estimated at $150 per square foot, while the sfh next door is estimated at $170. Also, my house is much newer (1986) than the SFH (1912).
I also think we need to take into account the incentives of local governments. I don't know if this is at all relevant to DC or large cities, but for many states rich towns have an incentive to keep land prices as high as possible.
Most municipalities get most of their revenue from property taxes. Richer municipalities tend to have much lower property tax rates, while also having much higher spending per capita, and there is a reason for this.
If you live in a town with only rich people then you can have a low tax rate that still brings in a huge amount of money. But if you are one of the wealthier people in town then you will end up picking up the slack for those who aren't as wealthy. But if you can exclude them, then you can maintain lower property taxes with high spending per capita.
This is why so many towns resist the building of homes below the average price that already exist. If a one $1,000,000 lot subdivides into 2 $600,000 lots that does increase the land value, but it reduces the per capita tax revenue by 40%. That will either result with tax rate increases or a decrease in quality of municipal services (education, police, road maintenence and ect.)
Exclusionary zoning is rational for local governments if they are funded this way. Fixing this would require a massive change in the way localities are funded.
It's late in the day so this comment won't get many eyeballs, but it feels like there are a few gaps in the logic here. (For the record, I'm very sold on YIMBY-ism for the greater good, though largely unaffected in the 'burbs).
1. The value of a home (separated from the value of the land) will depreciate over time in most circumstances except for the one where home construction is supply-side limited, either through bottlenecks or regulations. My 2-year-old car is worth more now than what I paid for it new despite its deteriorating physical condition simply due to supply-side constraints. This seems like a point for NIMBY-ism, in a messed up way- make it harder to build and the existing housing stock goes up in value.
2. The value of the land is derived from more than just the potential financial benefit from what you can build on it. The land's proximity to other people/places/things is a major factor, as is the scarcity of available land nearby. Again, NIMBY-ism theoretically benefits landowners here too- "character" makes a space's land more valuable, and requirements for parking and setbacks means you need to buy more land to build the same vicinity. Supply of land is not going up, demand will drive up its value.
Again, I'm very YIMBY, I just don't think it's cut-and-dry win-win for homeowners even if you assume they only care about their property value going up. (And to David Abbott's point, lots of people would prefer their property value NOT go up.)
A big part of the NIMBY discourse is the cultural distaste for the "evil developer". There are countless tropes and old movies of evil developers doing dastardly things, from the Goonies to Up the developers are portrayed as evil.
I think that these issues require a "good guy vs. bad guy" narrative. Recently some YIMBY's have tried to make homeowners the bad guys in this narrative. That is both factually wrong, and it is a massive political loser, so I am glad that Matt is pushing back on this narrative.
But we still need a "bad guy" for this narrative. I see two decent targets.
1. Incumbent landlords. People who own property who are renting it out do not want to see the development of new property. They like the high rents they are able to charge, and more competition will make it harder to maintain those rents. Many landlords are at the center of NIMBY debates, they want to develop their own properties but block their competitors.
2. Hedge Funds buying existing apartments/homes. Some of these funds explicitly outline their strategy as buying homes in heavily zoned areas where they are confident they won't face much future rental competition.
Invitation Homes tells its investors, “We operate in markets with strong demand drivers, ***high barriers to entry***, and high rent growth potential.”
These firms also have an incentive to encourage the continuation of those zoning policies.
I think that the critique of landlords is truer and has more evidence behind it, but the hedge funds are a much better villain. The main problem with using hedge funds as the villain is that there can be narrow solutions to block them that don't solve the real problem.
One of the other big problems hedge funds and other "outside" landlords/developers bring is that their activity sucks income out of local economies. If Invitation Homes own your Boise rental home, your rent doesn't go to a local Boise landlord, it goes to Dallas, and then to shareholders. A lot of people are paying 50% of their monthly income for rent; if that rent is leaving their hometown, thats a nightmare for the local economy.
If you upzone a small area, it will raise prices if the new use is valuable. But if you upzone a very large R1 area that's still desirable for R1, it won't raise single family house prices, because virtually all buyers would still intend to buy the house and live in it, and other buyers would be competing against those buyers.
California upzoned the entire state to allow ADUs in (virtually) all residential areas. There's no evidence that the upzoning has had an effect on prices. That's because most buyers don't want to build an ADU, so the small minority of buyers who do want to build an ADU have their pick of all the houses on the market, and don't have to pay more for ADU permission.
If Washington DC upzoned Matt's small area for ADUs, it would make his leaky garage more valuable. But if all of DC, and Virginia and Maryland, allowed ADUs, it wouldn't change the value of his leaky garage: a potential ADU builder could buy his house/garage, or any other property on the market, for their ADU project.
It’s true that houses do not gain value. A house will never be as functional and fashionable as the day (before) the first owner moves in. But it seems that Matthew is arguing that land (as opposed to housing) does increase in value, as he shows us the Case-Shiller U.S. National Home Price Index chart, which slopes upward. That’s not really true either. Land prices go up where population increases, especially near natural beauty or high-paying industries, causing, for example, large price gains in much of California over the last few decades.
But there were correspondingly steep declines in Detroit and the surrounding rust belt, where population declined. I grew up in Indiana, near towns that made tires, transmissions, car radios, and other car parts. Our house and the land it sits on decreased in value (accounting for inflation). As manufacturing moved overseas and agriculture became less labor-intensive, people moved away from industrial and rural areas into cities and suburbs. Large parts of the Midwest, South, and rural areas such as the Dakotas have lost population, and land value.
Over time, the price of “housing” (land and the structures on it) roughly keeps pace with inflation, but the price charts fail to capture the very high costs of maintaining the structures (repairs, roofs, appliances, utilities, flooring, remodels) and the land (lawn maintenance, landscaping, taxes). Generally speaking, we own houses not because they are good investments but because we like the freedom and autonomy they offer. Barring extreme circumstances, no one can evict us, and we can paint the walls a color we like.
Matthew writes, about adding ADUs, “[S]ince most people own homes they will oppose efforts to make housing cheaper and the whole thing is impossible. But recall that the reason taxing land value is hard is that most people own land, and they don’t want the land to get cheaper.” Roughly 65% of Americans own their homes, but a significant minority of these homes are condos or townhouses. While these owners technically (sort of) own land, there’s nothing they can do with it, and, in the case of a 500-unit high-rise condo building, each owner can claim only a few square feet or inches of the land. I like to see this land appraised as low as possible, because I am taxed on it.
To his credit, Matthew explores a range of incentives for and against regulation, but ignores all-important behavioral factors. We’re not supposed to say it, but people who have been less effective at managing their finances are also generally less effective at managing their surroundings. I own a condo with very strict HOA rules governing what residents can put on their patios and decks: no bicycles or other storage items allowed. Only approved patio furniture. No outdoor lighting allowed except a footlight. Even holiday lights are strictly regulated.
A few hundred yards away, there is a high-rise in which a number of units are dedicated to low-income housing. The decks are full of bicycles, trash, baby carriages, rusted charcoal grills, and other unsightly items. While theoretically we could have low-income units with high standards for maintenance and community aesthetics, in reality it wouldn’t work. The policing would be prohibitively expensive, and any attempt at accountability (fines, evictions) would be met with political outrage and cries of racism and other popular -isms.
While theoretically land-owners and renters could both benefit economically from looser regulations, in practice, “affordable” ADUs would probably lead to declines in quality-of-life for current residents, making neighborhoods less attractive and less safe, causing current owners to flee to better neighborhoods, ultimately reducing the land and housing value for all owners.
I live near Denver, where some relatively recent policy decisions to decriminalize drugs and reduce policing have led to skyrocketing crime and homelessness. After decades of an ambitious “infill” project designed to bring residences and visitors to the city and its sidewalks (by requiring new buildings to offer ground-level retail or restaurants, for example), the city suddenly feels empty and dangerous. Many businesses and restaurants are closing, and relatively new high-rises are offering reduced rents and move-in incentives. Good neighborhoods are valuable, and they take a great deal of attention and commitment to remain good.
Part of the NIMBY syndrome arises from cities not charging for parking on residential streets. Streets are a scarce resource and if people treat them is "free." problems emerge. [This is the exact problem of CO2 emissions. The capacity of the atmosphere to absorb CO2 without harm is limited (scarce), but emitters treat it as free.]
Street parking could be metered and some of the revenue devolved say through a credit against property tax be devolved to the homeowner which they could use to pay for parking in front of their homes if they chose to do so. This would probably work best if all city meters were embedded in a dynamic fee setting system.
Shoup Shoup Shoup. https://en.wikipedia.org/wiki/The_High_Cost_of_Free_Parking
Since, as MY correctly points out, the balance of political power rests with homeowners, I appreciate his efforts to couch arguments for upzoning in terms that at least try to engage homeowner interests and concerns. I especially appreciate the thoughts on parking -- it's important to residents!
It would be even better in the future if he doesn't accompany this with tossed-off comments on Twitter and the like that it would be just fine to build massive apartment buildings next to single family homes. That's a pretty quick way to alienate your target audience.
“ A house, where the owner of the house would have full rights to everything but would need to pay a monthly rent to the landowner.”
“ Well, the former is something you might buy if you needed a place to live, but would clearly be a terrible investment — all the risk is on the downside.”
Isn’t this the standard operating procedure for UK real estate? There’s a leasehold, I’m not sure how it really works but someone else normally owns the land AFAIK, and the price of the housing changes depending on how much time is left in the agreed in lease.
“ Beyond that, even if I would never personally take advantage of the right to expand the size of my house, merely having the right to do so would increase the value of the home in the event that I sold it.”
I see left commentators zeroing in on this to rebut the idea that upzoning and liberalizing land use restrictions will lower costs. They see it as a giveaway to owners and developers, and it’s sort of true! The land value does increase. So it’s more complicated to demonstrate just how much multi family housing has to go on that more valuable land to bring overall home values down.
I like the street parking suggestion at the end. I also think, more generally, that Shoup-loving YIMBYs need to abandon their dream of eliminating off-street parking, and instead advocate for requiring developers to *build* off-street parking - but to give priority for those parking spots to the neighbors so as to buy them off.
Let me spell this out a little more. The ideal policy would be to have no limits or requirements on height, density, setbacks, FAR, or anything else - but that is highly unlikely to happen. So we'll take as given that some limits on by-right construction are going to be in place.
What I might suggest is a law giving builders a right to exceed limits on height, density, etc. *if* for X sqft of residential space above the limit, the builder provides one off-street parking space to any SFH owner who lives in the house, whose house is within a Y-foot radius of the property, and who does not already have off-street parking of his/her own. Perhaps the building owner could be allowed to charge some nominal rate for the parking space, but it would be a submarket price. The builder would not be required to add off-street parking for the residents of the building itself.
This won't make everyone happy, but it should. The builder gets to add more sqft. The neighboring SFH owners get free or cheap parking spaces within walking distance of their houses. The parking spaces do not displace sqft that otherwise could have housed people, but are created "out of thin air" since they come from exceeding the density limits that would otherwise be in place. Everybody wins.
Did you mean "any SFH owner who lives in the neighborhood"? I hate that cities are forced to bribe existing homeowners with parking, but it might nevertheless be a workable solution. In some cases. Mostly, though, the SFH owners have plenty of off-street parking, but they object to people other than themselves parking on the street.
I just garbled the sentence. Read that as "...the builder provides one off-street parking space to any SFH owner whose house is within a Y-foot radius of the property, who lives in the house, and who does not already have off-street parking of his/her own."
The main problem with the proposal is not that it's objectionably bribing existing homeowners, but that it's not bribing enough of them. The other homeowners, the ones who have parking, are still going to object that the residents of the new development are going to park their 47 cars on the street.
No doubt it wouldn't eliminate all opposition, but I think it would make a dent, which in turn would make a difference at the margins. The strongest opposition comes from people who are afraid they won't be able to park their own cars.
It costs $90-100K to build one underground parking space. Developers should not be forced to build parking. If the neighbors want parking they can pay for it.
Deserve's got nothing to do with it. You can stand on principle, or you can get stuff built.
The Shoup-loving YIMBY's dream has never been to eliminate off-street parking, but to allow the property owner decide for themselves how much off-street parking they need.
To me, the compromise idea where a developer can build as little parking as they want, but with the caveat that residents of their property will *not* be eligible for on-street parking permits, has a lot of appeal. It forces the developer to actually weigh the tradeoffs between easy parking for residents, land, construction costs, etc., without being able to freeload off the public street.
Why are you giving away very valuable city property to existing homeowners? Let everyone pay for it. Should existing city parks and libraries be for existing homeowners too?
I am a Shoup-loving YIMBY but I agree, with sadness, that eliminating off-street parking is indeed a dream. Re "requiring" developers to build off-street parking, ok, but let them determine what the market requires. I think the abundance of evidence indicates that parking minimums work very poorly in practice.