9 ms·

Clever reforms can reduce the power of NIMBYs and cut housing costs

80 points by roymurdock 11y ago

mattnewton 11y ago
I'm skeptical that the bribes will be big enough to affect most land owners in San Francisco, but I don't have any numbers handy about the average income of the NIMBY's in that city. Just an intuition that they stand to lose far more in property value than it is practical to pay them. Side note - Does anyone know of a place to get that kind of information? Maybe it can be triangulated from census data + some other source?
- chillydawg 11y ago
  It certainly would not work in London where council tax (effectively residential property tax) is a maximum of a couple of £k per year. Even if you had 100% discount, for someone in a £3m flat (common), it's nothing. They simply would not care.
- teacup50 11y ago
  The idea that upzoning decreases property values is a pernicious myth that keeps being used to bludgeon these people as greedy NIMBYs. Upzoning in response to demand increases property values. It's very simple: you can charge more people high rent on the same plot. This isn't guesswork, we have the numbers. Upzoning is financially beneficial to existing home owners.
owlmonkey 11y ago
TILT sounds like an interesting idea. In San Francisco I suspect our best bet is through California State laws offering density bonuses or provide as-of-right building in some form, that overrides local planning constraints. For example, AB 2501 is currently in the local government committee but is being voted on this Wednesday: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB2501 http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?... If you feel compelled like me to support more housing in the bay area, please write or call these Assemblymembers in the local government committee and ask them to support it before Wednesday at 1:30 pm Pacific, even if you're not in their district: Susan Talamantes Eggman (Chair) - http://asmdc.org/members/a13 http://asmdc.org/members/a13 Marie Waldron (Vice-Chair) - https://ad75.asmrc.org/ https://ad75.asmrc.org/ Luis A. Alejo - http://asmdc.org/members/a30/ http://asmdc.org/members/a30/ Susan A. Bonilla - http://asmdc.org/members/a14/ http://asmdc.org/members/a14/ David Chiu - http://asmdc.org/members/a17/ http://asmdc.org/members/a17/ Ken Cooley - http://asmdc.org/members/a08/ http://asmdc.org/members/a08/ Beth Gaines - https://ad06.asmrc.org/ https://ad06.asmrc.org/ Richard S. Gordon - http://asmdc.org/members/a24/ http://asmdc.org/members/a24/ Eric Linder - https://ad60.asmrc.org/ https://ad60.asmrc.org/
deleted 11y ago
[deleted]
someguydave 11y ago
I'm dubious that a few bribes will give pause to people who consider their homes in jeopardy.
- dingaling 11y ago
  I think the objective is to wash-out the casually-opposed with the bribe of reduced property taxes, leaving the smaller hard-core opposition to be tackled. However they don't offer any novel ideas to address the often-genuine concerns of that hard-core of 'NIMBYs'. Those are the ones opposed on principles or personal experience. For example in my neighbourhood the building of new developments had resulted in hugely increased road-noise [0], to the extent that it's no longer pleasant to sit in in the front garden. So naturally I'll oppose any further development. No amount of trivial-tax-tinkering will convince me otherwise, since it's my quality-of-life being affected. [0] multiplied more-so by the fact that modern car tyres are much noisier, but planning permission only considers the number of cars and not their cumulative noise
  - Gibbon1 11y ago
    That's a good example of where orthodox economics breaks down; Money doesn't substitute for a quiet garden.
    - AnthonyMouse 11y ago
      The problem is more that it could, but necessary amount of money isn't feasible to pay. Though on the other hand, that sort of problem is solved by building taller buildings, because then if you don't want to hear the traffic you can live on the 20th floor.
      - teacup50 11y ago
        At which point you have a whole bunch of other problems, including not having a garden in the first place. That said, money does solve that problem too -- if a home owner accepts that they're being pushed out by development, there's a pretty penny to be made in selling out to developers.
dkopi 11y ago
"Everyone in the city stands to gain from growth; productivity in skilled cities rises with population, so when more people move in, all workers’ incomes should rise. But the gains from any particular property development are relatively small and thinly spread, whereas the costs are highly concentrated." This sounds like yet another case of public choice theory: https://en.wikipedia.org/wiki/Public_choice https://en.wikipedia.org/wiki/Public_choice
gonzo 11y ago
Talk about your clickbait headlines.
- DavidHm 11y ago
  That's...the title of the Economist article. Well, the subtitle, but the real title is "Terms of enlargement", which is not really self-explanatory, is it?
  - chris_wot 11y ago
    It's not even clickbait. It's not sensationalist in any way really. It actually captures in a one sentence summary exactly what the article is about. I honestly think that there should be a reporting mechanism for folks to complain about submarine articles, or click-bait headlines. So often I find that they aren't the case and it adds zero to any actual discourse around the subject matter itself. I think if you have an issue with clickbait headlines you really should email the site admins/moderators. They are pretty good about getting back to you, mostly.
    - ghaff 11y ago
      "Click-bait" is another one of those terms that gets thrown around too far regularly these days. MOST headlines are "click-bait" both online and in print. Headlines are supposed to grab your interest whether because of the topic itself, through clever wordplay (as the Economist tends to do), or through perhaps less scrupulous means. If a headline is deceptive or otherwise is misleading people (subject to the limitations of a short headline), say so explicitly--don't default to click-bait.
      - chris_wot 11y ago
        Agreed. Even better than just saying so, it would be far more edifying for all if the person making the claim would justify it with reasoning as to why the headline is misleading! Just using the words "click-bait" is even worse than a click-bait headline. In fact, it just becomes forum-spam.
PeterStuer 11y ago
The article seems to have it arse backwards. Yes, a lot of times this is a situation of "Distributed Costs and Concentrated Benefits", but with the benefits going to the property developer, and the costs to the impacted community. NIMBY is the catchy phrase constructed by marketing to discredit serious concerns people have when they are on the receiving end of someone's 'unacounted externality'. Technology has made it marginally cheaper to organize a resistance, but it is still an uphill battle because of the natural imbalance in the cost/benefits situation.
- jvm 11y ago
  I completely agree that development creates negative externalities which are legitimate complaints for neighbors. However, restrictions on development create a regressive tax in the form of high rents, which is, as the article describes, distributed broadly. What's needed is some sort of cost-benefit balance between the two. For example, I rent a 400 sq foot apartment in SF for $3k. The operating and capital cost of the physical apartment is probably on the order of $1000 (I have rented similar places in Montreal, which has ample housing, for <$1000). That means that the other $2000, or about 2/3 of my rent, is the result of apartment scarcity caused by development restrictions. If new development is more costly, we could imagine my rent would be $1500 at market equilibrium if there were no barriers to development and the city was covered in high rises from bay to ocean, so I am effectively paying $1500/mo for restrictions on development. Those restrictions have value in the form of reducing community impacts, so the question becomes, should the community as a whole pay a 100% "tax" on its rents to avoid additional development? The policy also closes off market rate housing in the city to any who can't afford the rents, which could be a feature or a bug depending on your outlook. I believe there is a goldilocks regime between the two extremes that we should strive for, but our current system doesn't provide a mechanism for us as a society to make a balanced cost/benefit tradeoff.
  - hiou 11y ago
    Do you happen to have another example of an city with a similar weather and employment profile that is significantly cheaper? Regardless of development? Is there unanimous agreement that high rents(which are occurring throughout the US and abroad right now) are solely due to lack of development?
tomohawk 11y ago
We have planning at the county level. All that does is place power in the hands of the powerful realtor/developer group. As a result, local imbalances abound. If you live in an area where those sorts of folks also live, it's really nice. If not, you get prison, dumps, subsidized housing, etc built right next to you. I can only imagine what this would look like if this was done at the state level. Our state is solidly one party...
- DavidHm 11y ago
  To some extent I believe that clustering of good (and bad) things is inevitable when there is a central decision marker (or decision making body). What I mena to say is once an area is nice (or has been designated as the next "growth" area), then nice properties/malls/services etc are going to go there. Industry buildings will cluster somewhere else, office buildings will cluster in a 3rd area. Of course, it sucks to be a resident in area that ends up being the low-value one, but someone will end up having to get the short stick.
pwg 11y ago
The article also completely ignores the effects of "easy money" in the price inflation of housing costs. By "easy money" I mean the period there where the banks would give almost anyone with a pulse a huge size loan for a house purchase. Because everyone was running around with an outsized "money press" in the form of their approved bank loan value, they were quite capable of bidding prices up, which is exactly what they did. Therefore, as to this cause of the price inflation, it somewhat inverted the supply/demand curve in that prices rose to accommodate greater supply of money in the hands of prospective purchasers. Yes, building restrictions do play a part, but fully ignoring the effects of using very cheap "other peoples money" for bidding on houses ignores another significant factor in the inflation effect.
ancap 11y ago
The chief problem with the idea of NIMBY is that it is not really the concerned party's back yard. A more accurate term for the concept might be NIMNBY (Not In My Neighbors' Back Yard). NIMBY is an affront to the concept of property rights. But, some say, the concerned party has the legitimate concern that development on a neighboring property will negatively impact the value of their own property. While an understandable concern to have, it does not justify the prevention of allowing the neighbor to develop on their rightfully owned property; just as company A should not be allowed to prevent company B from creating widgets because the extra competition will impact company A's bottom line.
- ghaff 11y ago
  Backyard in this context means something more akin to neighborhood/city/etc. as opposed to patch of green behoind hous Many property rights are limited in various ways--often by zoning in the case of land. And, typically, those limitations would be known at the time of purchase. Most would agree some level of zoning is reasonable; no incinerators or drilling for oil in residential neighborhoods for example. I actually agree that excessive permitting processes that block otherwise allowed development are often a problem. But some level of zoning (whatever you call it) is effectively required for a functioning city or other community.
  - Retric 11y ago
    Zoning is a wide topic. Requiring buildings to be safe for the area is one thing. Forcing Residential and Commercial property to widely different areas is a common if terrible idea. Central planning rarely works well. At best zoning could penalize some types of development to cover very real external costs, but not outlaw them.
    - davidw 11y ago
      I think most of us have some fuzzy concepts about some things being 'a step too far', but I'll admit to not having a great idea where or how to draw the line. It would suck to have an outdoor, late night heavy metal venue open up in an adjacent property, for instance. OTOH, a lot of the limits on housing height and density and car requirements seem like bunk to me. And I'd rather live closer than farther to basic amenities like a grocery store, some restaurants, a small bar... stuff like that. I loved that about life in Italy.
nwah1 11y ago
Everyone likes the idea of carrots. But I prefer sticks. Landowners get windfall gains from surrounding development and government services. We should have a high land value tax, to tax these unearned gains, which would ensure that only people able to make productive use of prime land will hold onto it. For instance, a subway stop will boost the surrounding land value of every property by hundreds of thousands of dollars, yet everyone else is footing the bill for it. And worse, if the taxes are low enough, landowners can, in effect, hold that prime land for ransom, and do nothing with it. https://vimeo.com/32548658 https://vimeo.com/32548658
- cyber 11y ago
  Excepting that in SF the "everyone" does not want the land owners to make productive use of it: they want the status quo. (Well, the status quo of what the remember as being the "high point".) Having witnessed protests that occurred midway through the reconstruction of offramps, (meaning an existing ramp was torn down, and they were half done rebuilding it), it's not so much NIMBY, but NBAA: Never Build Anything, Anywhere. The only way that higher taxes would be beneficial is if SF landowners were actually allowed the freedom to upgrade their properties. Zoning, especially height restrictions (40' max over most of SF), as well as endless red tape, make it really hard to make productive use of prime land. Regardless if it's the original owner or new buyer. ( A new buyer is granted some slight advantage, but not enough to be meaningful.)
takno 11y ago
You could just do more to encourage development of balanced countries by deliberately skewing infrastructure investment to other places, and watching people move out when large cities grind to a halt. Just because all the money feels it wants to stay in London you don't have to encourage it to

80 points by roymurdock 11y ago

I'm skeptical that the bribes will be big enough to affect most land owners in San Francisco, but I don't have any numbers handy about the average income of the NIMBY's in that city. Just an intuition that they stand to lose far more in property value than it is practical to pay them. Side note - Does anyone know of a place to get that kind of information? Maybe it can be triangulated from census data + some other source?

chillydawg 11y ago
It certainly would not work in London where council tax (effectively residential property tax) is a maximum of a couple of £k per year. Even if you had 100% discount, for someone in a £3m flat (common), it's nothing. They simply would not care.
teacup50 11y ago
The idea that upzoning decreases property values is a pernicious myth that keeps being used to bludgeon these people as greedy NIMBYs. Upzoning in response to demand increases property values. It's very simple: you can charge more people high rent on the same plot. This isn't guesswork, we have the numbers. Upzoning is financially beneficial to existing home owners.

owlmonkey 11y ago

TILT sounds like an interesting idea. In San Francisco I suspect our best bet is through California State laws offering density bonuses or provide as-of-right building in some form, that overrides local planning constraints. For example, AB 2501 is currently in the local government committee but is being voted on this Wednesday: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB2501 http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?... If you feel compelled like me to support more housing in the bay area, please write or call these Assemblymembers in the local government committee and ask them to support it before Wednesday at 1:30 pm Pacific, even if you're not in their district: Susan Talamantes Eggman (Chair) - http://asmdc.org/members/a13 http://asmdc.org/members/a13 Marie Waldron (Vice-Chair) - https://ad75.asmrc.org/ https://ad75.asmrc.org/ Luis A. Alejo - http://asmdc.org/members/a30/ http://asmdc.org/members/a30/ Susan A. Bonilla - http://asmdc.org/members/a14/ http://asmdc.org/members/a14/ David Chiu - http://asmdc.org/members/a17/ http://asmdc.org/members/a17/ Ken Cooley - http://asmdc.org/members/a08/ http://asmdc.org/members/a08/ Beth Gaines - https://ad06.asmrc.org/ https://ad06.asmrc.org/ Richard S. Gordon - http://asmdc.org/members/a24/ http://asmdc.org/members/a24/ Eric Linder - https://ad60.asmrc.org/ https://ad60.asmrc.org/

deleted 11y ago

[deleted]

someguydave 11y ago

I'm dubious that a few bribes will give pause to people who consider their homes in jeopardy.

dingaling 11y ago
I think the objective is to wash-out the casually-opposed with the bribe of reduced property taxes, leaving the smaller hard-core opposition to be tackled. However they don't offer any novel ideas to address the often-genuine concerns of that hard-core of 'NIMBYs'. Those are the ones opposed on principles or personal experience. For example in my neighbourhood the building of new developments had resulted in hugely increased road-noise [0], to the extent that it's no longer pleasant to sit in in the front garden. So naturally I'll oppose any further development. No amount of trivial-tax-tinkering will convince me otherwise, since it's my quality-of-life being affected. [0] multiplied more-so by the fact that modern car tyres are much noisier, but planning permission only considers the number of cars and not their cumulative noise
- Gibbon1 11y ago
  That's a good example of where orthodox economics breaks down; Money doesn't substitute for a quiet garden.
  - AnthonyMouse 11y ago
    The problem is more that it could, but necessary amount of money isn't feasible to pay. Though on the other hand, that sort of problem is solved by building taller buildings, because then if you don't want to hear the traffic you can live on the 20th floor.
    - teacup50 11y ago
      At which point you have a whole bunch of other problems, including not having a garden in the first place. That said, money does solve that problem too -- if a home owner accepts that they're being pushed out by development, there's a pretty penny to be made in selling out to developers.

dkopi 11y ago

"Everyone in the city stands to gain from growth; productivity in skilled cities rises with population, so when more people move in, all workers’ incomes should rise. But the gains from any particular property development are relatively small and thinly spread, whereas the costs are highly concentrated." This sounds like yet another case of public choice theory: https://en.wikipedia.org/wiki/Public_choice https://en.wikipedia.org/wiki/Public_choice

gonzo 11y ago

Talk about your clickbait headlines.

DavidHm 11y ago
That's...the title of the Economist article. Well, the subtitle, but the real title is "Terms of enlargement", which is not really self-explanatory, is it?
- chris_wot 11y ago
  It's not even clickbait. It's not sensationalist in any way really. It actually captures in a one sentence summary exactly what the article is about. I honestly think that there should be a reporting mechanism for folks to complain about submarine articles, or click-bait headlines. So often I find that they aren't the case and it adds zero to any actual discourse around the subject matter itself. I think if you have an issue with clickbait headlines you really should email the site admins/moderators. They are pretty good about getting back to you, mostly.
  - ghaff 11y ago
    "Click-bait" is another one of those terms that gets thrown around too far regularly these days. MOST headlines are "click-bait" both online and in print. Headlines are supposed to grab your interest whether because of the topic itself, through clever wordplay (as the Economist tends to do), or through perhaps less scrupulous means. If a headline is deceptive or otherwise is misleading people (subject to the limitations of a short headline), say so explicitly--don't default to click-bait.
    - chris_wot 11y ago
      Agreed. Even better than just saying so, it would be far more edifying for all if the person making the claim would justify it with reasoning as to why the headline is misleading! Just using the words "click-bait" is even worse than a click-bait headline. In fact, it just becomes forum-spam.

PeterStuer 11y ago

The article seems to have it arse backwards. Yes, a lot of times this is a situation of "Distributed Costs and Concentrated Benefits", but with the benefits going to the property developer, and the costs to the impacted community. NIMBY is the catchy phrase constructed by marketing to discredit serious concerns people have when they are on the receiving end of someone's 'unacounted externality'. Technology has made it marginally cheaper to organize a resistance, but it is still an uphill battle because of the natural imbalance in the cost/benefits situation.

jvm 11y ago
I completely agree that development creates negative externalities which are legitimate complaints for neighbors. However, restrictions on development create a regressive tax in the form of high rents, which is, as the article describes, distributed broadly. What's needed is some sort of cost-benefit balance between the two. For example, I rent a 400 sq foot apartment in SF for $3k. The operating and capital cost of the physical apartment is probably on the order of $1000 (I have rented similar places in Montreal, which has ample housing, for <$1000). That means that the other $2000, or about 2/3 of my rent, is the result of apartment scarcity caused by development restrictions. If new development is more costly, we could imagine my rent would be $1500 at market equilibrium if there were no barriers to development and the city was covered in high rises from bay to ocean, so I am effectively paying $1500/mo for restrictions on development. Those restrictions have value in the form of reducing community impacts, so the question becomes, should the community as a whole pay a 100% "tax" on its rents to avoid additional development? The policy also closes off market rate housing in the city to any who can't afford the rents, which could be a feature or a bug depending on your outlook. I believe there is a goldilocks regime between the two extremes that we should strive for, but our current system doesn't provide a mechanism for us as a society to make a balanced cost/benefit tradeoff.
- hiou 11y ago
  Do you happen to have another example of an city with a similar weather and employment profile that is significantly cheaper? Regardless of development? Is there unanimous agreement that high rents(which are occurring throughout the US and abroad right now) are solely due to lack of development?

tomohawk 11y ago

We have planning at the county level. All that does is place power in the hands of the powerful realtor/developer group. As a result, local imbalances abound. If you live in an area where those sorts of folks also live, it's really nice. If not, you get prison, dumps, subsidized housing, etc built right next to you. I can only imagine what this would look like if this was done at the state level. Our state is solidly one party...

DavidHm 11y ago
To some extent I believe that clustering of good (and bad) things is inevitable when there is a central decision marker (or decision making body). What I mena to say is once an area is nice (or has been designated as the next "growth" area), then nice properties/malls/services etc are going to go there. Industry buildings will cluster somewhere else, office buildings will cluster in a 3rd area. Of course, it sucks to be a resident in area that ends up being the low-value one, but someone will end up having to get the short stick.

pwg 11y ago

The article also completely ignores the effects of "easy money" in the price inflation of housing costs. By "easy money" I mean the period there where the banks would give almost anyone with a pulse a huge size loan for a house purchase. Because everyone was running around with an outsized "money press" in the form of their approved bank loan value, they were quite capable of bidding prices up, which is exactly what they did. Therefore, as to this cause of the price inflation, it somewhat inverted the supply/demand curve in that prices rose to accommodate greater supply of money in the hands of prospective purchasers. Yes, building restrictions do play a part, but fully ignoring the effects of using very cheap "other peoples money" for bidding on houses ignores another significant factor in the inflation effect.

ancap 11y ago

The chief problem with the idea of NIMBY is that it is not really the concerned party's back yard. A more accurate term for the concept might be NIMNBY (Not In My Neighbors' Back Yard). NIMBY is an affront to the concept of property rights. But, some say, the concerned party has the legitimate concern that development on a neighboring property will negatively impact the value of their own property. While an understandable concern to have, it does not justify the prevention of allowing the neighbor to develop on their rightfully owned property; just as company A should not be allowed to prevent company B from creating widgets because the extra competition will impact company A's bottom line.

ghaff 11y ago
Backyard in this context means something more akin to neighborhood/city/etc. as opposed to patch of green behoind hous Many property rights are limited in various ways--often by zoning in the case of land. And, typically, those limitations would be known at the time of purchase. Most would agree some level of zoning is reasonable; no incinerators or drilling for oil in residential neighborhoods for example. I actually agree that excessive permitting processes that block otherwise allowed development are often a problem. But some level of zoning (whatever you call it) is effectively required for a functioning city or other community.
- Retric 11y ago
  Zoning is a wide topic. Requiring buildings to be safe for the area is one thing. Forcing Residential and Commercial property to widely different areas is a common if terrible idea. Central planning rarely works well. At best zoning could penalize some types of development to cover very real external costs, but not outlaw them.
  - davidw 11y ago
    I think most of us have some fuzzy concepts about some things being 'a step too far', but I'll admit to not having a great idea where or how to draw the line. It would suck to have an outdoor, late night heavy metal venue open up in an adjacent property, for instance. OTOH, a lot of the limits on housing height and density and car requirements seem like bunk to me. And I'd rather live closer than farther to basic amenities like a grocery store, some restaurants, a small bar... stuff like that. I loved that about life in Italy.

nwah1 11y ago

Everyone likes the idea of carrots. But I prefer sticks. Landowners get windfall gains from surrounding development and government services. We should have a high land value tax, to tax these unearned gains, which would ensure that only people able to make productive use of prime land will hold onto it. For instance, a subway stop will boost the surrounding land value of every property by hundreds of thousands of dollars, yet everyone else is footing the bill for it. And worse, if the taxes are low enough, landowners can, in effect, hold that prime land for ransom, and do nothing with it. https://vimeo.com/32548658 https://vimeo.com/32548658

cyber 11y ago
Excepting that in SF the "everyone" does not want the land owners to make productive use of it: they want the status quo. (Well, the status quo of what the remember as being the "high point".) Having witnessed protests that occurred midway through the reconstruction of offramps, (meaning an existing ramp was torn down, and they were half done rebuilding it), it's not so much NIMBY, but NBAA: Never Build Anything, Anywhere. The only way that higher taxes would be beneficial is if SF landowners were actually allowed the freedom to upgrade their properties. Zoning, especially height restrictions (40' max over most of SF), as well as endless red tape, make it really hard to make productive use of prime land. Regardless if it's the original owner or new buyer. ( A new buyer is granted some slight advantage, but not enough to be meaningful.)

takno 11y ago

You could just do more to encourage development of balanced countries by deliberately skewing infrastructure investment to other places, and watching people move out when large cities grind to a halt. Just because all the money feels it wants to stay in London you don't have to encourage it to