Matt’s arguments are most compelling for home owners who want to sell soon. If you plan to stay a while, it’s perfectly rational to care more about the aesthetics of your neighborhood than property values.
Suppose my city made it easier to construct ADUs. In the short term, the increased property values only increase my tax bill. I could borrow against the increased equity, but only through paying interest. Meanwhile, there’s more traffic on my street and more noise from more residents doing stuff outdoors.
If I were desperate for income and had good credit, I could build and rent an ADU, but that would make me feel crowded and oppress me with noise. The point is, if I like my neighborhood the way it is and plan to stay, NIMBYISM makes sense.
I live in Vietnam where it is pretty common to price the land and the house separately. And people usually talk about "buying land" the way Americans talk about "buying a house". Of course, that's due to historically valuing the existing structure at something pretty close to $0 in most cases and new owners frequently tearing down and rebuilding. That makes it easy for comparables to separate out land and structure (in the few cases where you attach a value to the structure). Now, that's changing as structures get better, especially in the big cities. But when I bought my house 5 years ago the house was "free" and all I paid for was the land itself.
An interesting piece. The problem is it assumes a rational “homo economicus.” In real life people have other interests that are not just about money. For instance, the equally rational fear that easing development, though making them richer, would also gradually turn their suburb more urban. Some people like an urban environment, some prefer suburban, so if they chose the latter it makes sense they won’t want to see it change into the former.
Why not move? There are plenty of places you could live that would allow you to fix masonry without government approval, add additions to your home, or turn a garage into a rental apartment.
I don’t necessarily disagree with YIMBY but I also wonder why people don’t leave places where they feel they are poorly served by local or state policy.
One conclusion is that they don’t care too much. While it is inconvenient, the benefits to living there must be higher. Another conclusion is that they benefit financially from NIMBYism and don’t want to take a course of action that could sacrifice the gains they think they’re locked into by moving to a YIMBY place where the value of land might not grow as much.
Why don’t more people “vote with their” feet, so to speak?
This works other ways, too! People complain about their commutes across three counties and two interstates. Move? Nope, out of the question. Two+ hours per day sat in your car is preferable to living somewhere more conducive to your job or lifestyle. Then you must not care very much! Otherwise, you’re free to make a change so do it.
(post-posting addition because it probably matters to some folks: I have never owned property and don't see a way I can reasonably afford property in the present market given my current finances and career path. I am somewhat skeptical of tying up a bunch of money in owning a home, condo, whatever even though property values seem mostly to go up over the long term. I also find it ironic that I can get approved to rent at X but not approved for a mortgage at 2/3 X. Not that it matters much, prices are rising so fast that by the time I am approved for a mortgage, it will not be enough to afford a decent home in most places.)
I'm quite sympathetic to this argument, but I do think it under weights how much value people place on the club good that is their neighborhood. As Matt has discussed previously, in its worst form, there's a very ugly history here, tied up with racial segregation. Even in more benign modern forms there's often an inherent class segregation logic to it, by setting often expensive requirements above and beyond the practical effect of land scarcity.
That said, while I am glad not to live in a neighborhood with a HOA, I think that many people do put economic value on the aesthetics of their neighborhood. Similar to the reason that some towns encourage or enforce architectural themes (see Santa Fe, New Mexico).
I think it's worth considering what forms of club good provision for neighborhoods are least harmful to the cause of affordable housing when upzoning single family zoned neighborhoods. Maybe a short list of higher density designs with approval by right and a charette process otherwise. There's a big fight ongoing now in Montgomery County, Maryland and politicians are already offering those sorts of compromises. They certainly not enough to win-over core NIMBYs but I do think. like the RPP proposal, they do help convince some voters at the margin by giving them a more certainty and voice even while losing a veto.
I think that this is spot on. The traditional political critique that Nimbyism is driven by homeowners trying to keep home prices high through scarcity has never made sense. It presupposes a kind of rational self interested voter that we don't see anywhere else. It fails to account for the fairly large amount of renter nimbyism.
But more importantly, it also gets the economics mostly wrong. Landowners would mostly benefit financially from a liberalization of the regulations on land use.
Also, I have been proposing grandfathered in RPP for years. It makes sense as a second best option.
I agree with almost everything except "to override his normal Republican Party appreciation of free markets." I cannot remember a time when Republicans "appreciated" free markets. There was a time when less regulation of certain kinds was in the interest of their donor base. But when Democrats started becoming a bit "neo-Liberal" and started appealing to those same donors Republicans started to more toward "identity" issues like crime drugs, immigration, trade restrictions.
Who your neighbors are is important, especially if you're a homeowner with kids who plans on staying in the neighborhood. And it's even more important if your local government is not doing a great job with noise, crime, or schools. If you're not talking about that stuff, I don't think you really have a great sense of the (non-leftist) objections to new housing. From where I am, I want new construction because there are changes to my neighborhood that will actually be quite positive -- more businesses, and maybe even neighborhood middle/high schools that become viable for us. But there are a lot of people for whom that's not the case.
Isn’t your average single family home really three separate assets: 1) the physical structure 2) the land, and 3) the right to have one housing unit at that location? Seems like the economic benefits on #2 could be outweighed by taking the economic value of #3 to zero.
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.
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.
Matt’s arguments are most compelling for home owners who want to sell soon. If you plan to stay a while, it’s perfectly rational to care more about the aesthetics of your neighborhood than property values.
Suppose my city made it easier to construct ADUs. In the short term, the increased property values only increase my tax bill. I could borrow against the increased equity, but only through paying interest. Meanwhile, there’s more traffic on my street and more noise from more residents doing stuff outdoors.
If I were desperate for income and had good credit, I could build and rent an ADU, but that would make me feel crowded and oppress me with noise. The point is, if I like my neighborhood the way it is and plan to stay, NIMBYISM makes sense.
Look, if you forgot to do a Ukraine pre-write, you can just say so.
I live in Vietnam where it is pretty common to price the land and the house separately. And people usually talk about "buying land" the way Americans talk about "buying a house". Of course, that's due to historically valuing the existing structure at something pretty close to $0 in most cases and new owners frequently tearing down and rebuilding. That makes it easy for comparables to separate out land and structure (in the few cases where you attach a value to the structure). Now, that's changing as structures get better, especially in the big cities. But when I bought my house 5 years ago the house was "free" and all I paid for was the land itself.
An interesting piece. The problem is it assumes a rational “homo economicus.” In real life people have other interests that are not just about money. For instance, the equally rational fear that easing development, though making them richer, would also gradually turn their suburb more urban. Some people like an urban environment, some prefer suburban, so if they chose the latter it makes sense they won’t want to see it change into the former.
Why not move? There are plenty of places you could live that would allow you to fix masonry without government approval, add additions to your home, or turn a garage into a rental apartment.
I don’t necessarily disagree with YIMBY but I also wonder why people don’t leave places where they feel they are poorly served by local or state policy.
One conclusion is that they don’t care too much. While it is inconvenient, the benefits to living there must be higher. Another conclusion is that they benefit financially from NIMBYism and don’t want to take a course of action that could sacrifice the gains they think they’re locked into by moving to a YIMBY place where the value of land might not grow as much.
Why don’t more people “vote with their” feet, so to speak?
This works other ways, too! People complain about their commutes across three counties and two interstates. Move? Nope, out of the question. Two+ hours per day sat in your car is preferable to living somewhere more conducive to your job or lifestyle. Then you must not care very much! Otherwise, you’re free to make a change so do it.
(post-posting addition because it probably matters to some folks: I have never owned property and don't see a way I can reasonably afford property in the present market given my current finances and career path. I am somewhat skeptical of tying up a bunch of money in owning a home, condo, whatever even though property values seem mostly to go up over the long term. I also find it ironic that I can get approved to rent at X but not approved for a mortgage at 2/3 X. Not that it matters much, prices are rising so fast that by the time I am approved for a mortgage, it will not be enough to afford a decent home in most places.)
I'm quite sympathetic to this argument, but I do think it under weights how much value people place on the club good that is their neighborhood. As Matt has discussed previously, in its worst form, there's a very ugly history here, tied up with racial segregation. Even in more benign modern forms there's often an inherent class segregation logic to it, by setting often expensive requirements above and beyond the practical effect of land scarcity.
That said, while I am glad not to live in a neighborhood with a HOA, I think that many people do put economic value on the aesthetics of their neighborhood. Similar to the reason that some towns encourage or enforce architectural themes (see Santa Fe, New Mexico).
I think it's worth considering what forms of club good provision for neighborhoods are least harmful to the cause of affordable housing when upzoning single family zoned neighborhoods. Maybe a short list of higher density designs with approval by right and a charette process otherwise. There's a big fight ongoing now in Montgomery County, Maryland and politicians are already offering those sorts of compromises. They certainly not enough to win-over core NIMBYs but I do think. like the RPP proposal, they do help convince some voters at the margin by giving them a more certainty and voice even while losing a veto.
You had me until the parking plan at the end. No one should have special rights to public space to store their private toy.
I think that this is spot on. The traditional political critique that Nimbyism is driven by homeowners trying to keep home prices high through scarcity has never made sense. It presupposes a kind of rational self interested voter that we don't see anywhere else. It fails to account for the fairly large amount of renter nimbyism.
But more importantly, it also gets the economics mostly wrong. Landowners would mostly benefit financially from a liberalization of the regulations on land use.
Also, I have been proposing grandfathered in RPP for years. It makes sense as a second best option.
I agree with almost everything except "to override his normal Republican Party appreciation of free markets." I cannot remember a time when Republicans "appreciated" free markets. There was a time when less regulation of certain kinds was in the interest of their donor base. But when Democrats started becoming a bit "neo-Liberal" and started appealing to those same donors Republicans started to more toward "identity" issues like crime drugs, immigration, trade restrictions.
Who your neighbors are is important, especially if you're a homeowner with kids who plans on staying in the neighborhood. And it's even more important if your local government is not doing a great job with noise, crime, or schools. If you're not talking about that stuff, I don't think you really have a great sense of the (non-leftist) objections to new housing. From where I am, I want new construction because there are changes to my neighborhood that will actually be quite positive -- more businesses, and maybe even neighborhood middle/high schools that become viable for us. But there are a lot of people for whom that's not the case.
Isn’t your average single family home really three separate assets: 1) the physical structure 2) the land, and 3) the right to have one housing unit at that location? Seems like the economic benefits on #2 could be outweighed by taking the economic value of #3 to zero.
This is Slow Boring's "Thunder Road"
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.
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.