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Rather than trying to fight NIMBYism directly since development imposes large costs on the current residents and home owners in an area, fight it by using a rev

Rather than trying to fight NIMBYism directly since development imposes large costs on the current residents and home owners in an area, fight it by using a reverse dutch auction process [0]. Developers can bid what they are willing to pay a community for development approval of what they want to build and the communities can compete against each other to win the development. The amount the developer is willing to pay rises each month and the first community to say yes gets the development. This way rather than all the surplus going to the developer and all the costs to the community, both sides benefit. Win-win. Edit. Since it has come up a few times in the comments you can cover the location issue via the developer's bid requirement documentation. For example, they could say they need conditions x, y, & z for any site and only communities with sites that meet those conditions can bid. The developer can make the conditions as narrow or broad as they like (all the way from only one site in state meeting the conditions to thousands of sites). It will be in the interest of the developer to keep the conditions broad since the more flexible they can be the more communities will compete for the development and the lower the cost to them. 0. https://en.wikipedia.org/wiki/Reverse_auction https://en.wikipedia.org/wiki/Reverse_auction

schoen 8y ago
I doubt that the locations for prospective real estate developments are fungible enough to make the plans and conditions applicable to each interchangeable. Remember that the things that are said to matter the most in real estate are "location, location, and location". https://www.nytimes.com/2009/06/28/magazine/28FOB-onlanguage-t.html https://www.nytimes.com/2009/06/28/magazine/28FOB-onlanguage... Housing developments and their costs of construction and their suitability for a particular site and their aesthetic appeal to an area and the demand curve that they face there and their utility connection options and the other regulations that they will be subject to apart from permit approval are all different in different places, so a developer's level enthusiasm for building a particular project in one city or another, or one neighborhood or another, is very unlikely to be exactly transferable... You might say that the auction mechanism would nonetheless take account of this because the developer would only bid amounts that would lead to profitability literally anywhere, but I don't think such amounts exist. ("Cool, the 50-story apartment building concept has been approved for construction on a vacant lot with no existing utility connections 5 km from the nearest other building and 30 km from the nearest bus stop! Let's go build it!")
- danieltillett 8y ago
  The location requirement can be covered by the bid proposal of the developer. The can say the development requires certain features. It will be in their interest to make this as broad as possible so they create the maximum competition between communities for the development. For example developers could make the conditions so tight that only one location met all the requirements pushing up the cost since that community would know this was the only site and so hold off bidding. Alternatively, the developer could set the conditions broadly so that more communities would bid lowering the cost. The nice thing about this is the friendlier the developer makes the proposal to a community the lower the price they will have pay. The community gets development that maximises their returns while the developer is encouraged to create community friendly developments.
  - schoen 8y ago
    Thanks for the interesting response! I wonder how many developers currently think this way (in terms of explicitly specified sets of features rather than specific sites). And, what's more, how eager would they be to be seen to be thinking this way in a public bid? One thing that comes to mind is that some developers might not want to publicly specify some of the features that actually matter to them, for example things about neighborhood incomes, crime rates, homelessness, or other neighborhood demographics. Still, developers may feel that these things will significantly affect the suitability of a site to a profitable project, but not want to deal with the public relations aspects of spelling out their reasoning. I'm not sure how strong an argument that is against your proposal, but maybe developers would consider it pretty fundamental. Edit: Also, it's amusing to think about people trying to quantify aesthetic fit. "We want to build this development in a place that McMansion Hell thinks is overall pretty tacky, but not super tacky." "We want to build this development in a place with an average of 12 architectural classiness points, but in any case not more than 17 classiness points."
    - danieltillett 8y ago
      All those other considerations you mention will play a role, but they will affect the final sale price and hence the undeveloped land value. Developers will be worried about the spread between site acquisition costs (land + development bid cost) and final sale price. Locations with problems will have lower undeveloped land values. In practice this proposal would work best when land owners and communities work together to put together potential sites that meet developers needs. I think developers will hate this idea because instead of the whole surplus going to them and their corrupt buddies in government, it will have to be shared with the local community. Since the bid will be public there is no way to payoff someone in the planning department to get approval for your development. Of course from my perspective this is a feature not a bug.
DavidSJ 8y ago
I think communities already negotiate with developers. But what's good for the local community isn't the same as what's good for the region as a whole. The housing crisis is regional; the benefits from development extend far beyond the neighborhood or even municipality in question -- reducing housing prices all over the map. So you can't expect a negotiation between the developers and the community to account for that external benefit, and you're left with a tragedy of the commons where each community wants more housing supply, just not here.
- danieltillett 8y ago
  I think you are missing the point of my proposal. Rather than “negotiating” (think corruption) the communities only get the development they are happy with. Rather than developers spending their time in court fighting communities, they would spend their time creating attracting development proposals that communities would bid on. The current approach is designed to maximise conflict and minimise community benefit. Let’s think about creating a system that minimises conflict and maximises community benefit.
jessaustin 8y ago
It's a fine idea but adjustments would be necessary to account for the fact that a development in one location will generate a different cash flow than a very similar one in a different location. Also most communities who would take part in such a scheme would also simply approve proposed developments without it.
- danieltillett 8y ago
  I addressed this issue up thread - the developer just makes the conditions for the bid part of the bid documentation. It is in their interest to keep it broad so that they get more bids.
jimrandomh 8y ago
> imposes large costs on the current residents and home owners You mean, imposes large costs on landlords and home owners. Residents are made better off if they're renters.
- pchristensen 8y ago
  If development in the area is a bad thing, then it's definitely NOT being imposed on the landlord. If development in the area is a good thing, then the value accrues to the property, which benefits the landlord, leading to increased rents. The renter has to decide if the benefits from the development are worth the increased rent, and this will vary by person.
  - lovich 8y ago
    Not if they're developing more supply of rental units. I'll give that this doesn't play out in practicality in a lot of places. My own neighborhood is currently constructing enough apartment buildings to double the number of units, but our rent still went up. This however is a function of such pent up demand. Nearly half of my coworkers have an hour+ commute and most of them would be love to move closer to the city if the pricea dropped, and that will only happen if more units are built. A 1-3% increase in available units probably won't do anything but change local neighborhood prices, but a city adding 10%+ in units everywhere is going to drop their average rent costs
- danieltillett 8y ago
  If it increases undesirable things like gridlock or noise then even renters suffer from development. While developments should lower rents (all things being equal) it does still have external costs to renters.
- shados 8y ago
  The only benefit renters have when new construction come in is that they can get the hell out instead of being stuck with "beep beep beep" trucks backing up at 6am and demolition tremors all day long for 3-5 years straight (yeah, I'm jaded). Anyone living there, regardless of if they own or rent, is affected by the changes. People currently there bear the burden, people who come in after reap the benefits.
stinkytaco 8y ago
Also, hold those developers responsible for fulfilling their obligations. I am, perhaps, a bit of NIMBY. I'm willing to accept that some of my concerns are not in the public interest. I don't want an apartment building in my neighborhood because of the impacts on street parking, traffic, noise, etc. All of those things negatively affect me, and so I take a lot of convincing. But another issue is that developers have a history of claiming they will ameliorate these issues by improving infrastructure, such as adding underground parking, upgrading sewers, building sound barriers, etc and then do not. Or they exploit loopholes to avoid their obligations. An example where I live is that new developments are required to have sidewalks. Developers simply tell homeowners they are required to build the sidewalk within 2 years which, of course, doesn't happen. 5 years later, the city goes in an builds them and applies specials to the home and everyone is unhappy except the developer, who walked away from the project long ago. Sometimes its seems that cities are so beholden to developers that they can get away with anything.
- rayiner 8y ago
  It’s the government’s job to ensure adequate infrastructure. The people that buy from the developer will be paying for their proportionate share of that new infrastructure with taxes. Forcing the developer to cover the costs of infrastructure is just a sneaky way to shift the tax burden from existing residents to new residents.
  - singingboyo 8y ago
    The maintenance cost of existing infrastructure is paid for by existing residents. It seems sensible to have the up-front cost of adding new infrastructure covered by new residents/developers (who are later considered existing residents covering maintenance for the new, now-existing infrastructure). Why would existing residents ever agree to new development if they have to pay for it? (Either through taxes to upgrade infrastructure, or by needing to deal with insufficient infrastructure that doesn't get improved as needed) Maybe instead of directly performing the upgrades, developers should be paying extra to the government (either lump sum, or over N years) because in theory the government can then do a few large upgrades rather than developers doing many small ones, but the cost of new capacity should really be the responsibility of the people who need it (developers/new residents).
joe_the_user 8y ago
This terrible (imo) approach would require a huge amount of capital for people to either build or to live in a low-density community. Today, a big factor driving up rents is the amount of money coming into "hip" areas, seeking profits proportionate to it's investment. I can't see how this scheme wouldn't simply increase the problem - while trampling people ordinary intuition concerning property. The ideal situation imo is to have certain areas where very high density is the only use and other areas where low density is standard. Here the market would dictate an overall increase in density while relatively reducing the cost of buying land.
- danieltillett 8y ago
  How exactly would this proposal require a huge amount of capital to build? Your solution is to effectively steal the rights of the owners of the land (by taking away their ability to control density) without compensation and hand a windfall to developers. How do you think we ended up in the current NIMBYism situation?
  - nwah1 8y ago
    Titleholders are merely stewards, at best, and it is they who regularly receive windfalls from the productive activity of surrounding individuals. The public are the real owners of the land.
    - danieltillett 8y ago
      You might find the titleholders disagree with this view and they have a rather large amount of power hence why we have developmental gridlock.
  - joe_the_user 8y ago
    How exactly would this proposal require a huge amount of capital to build? With your "reverse auction" approach, the would-be builder has to spend money on both out-bidding others who who'd prefer other uses AND has to spend on the actual cost of building, so two/double costs. Your solution is to effectively steal the rights of the owners of the land. My approach modifies the rights of title holders. It's no more stealing than more other measures (such zoning) because it happens in the bounds of the right. Indeed, I am simply proposing extra-aggressive zoning to encourage density. Moreover, your approach also modifies land-holder rights. I mean, landholder have never had unconditional control of their land, that control has devolved to the state or the sovereign all the way back to medieval times and before.
Paul-ish 8y ago
Is this approach to development written up anywhere, or is this your idea?
- danieltillett 8y ago
  It is partially my idea in that I have read (long time ago) a similar approach for locating unpopular things like waste dumps, but I haven't seen it proposed as a solution for overcoming development paralysis. I have been surprised how many people have voted it down here. The primary post has been up and down like a yo-yo over the last 24 hours. I would really like to know why. I will try to write it up in more detail on my blog.
  - Paul-ish 8y ago
    Writing it up is not a bad idea. If you could find citations from economists or research that has shown this to work (even if its in slightly different situations) I think it could be convincing.

schoen 8y ago

I doubt that the locations for prospective real estate developments are fungible enough to make the plans and conditions applicable to each interchangeable. Remember that the things that are said to matter the most in real estate are "location, location, and location". https://www.nytimes.com/2009/06/28/magazine/28FOB-onlanguage-t.html https://www.nytimes.com/2009/06/28/magazine/28FOB-onlanguage... Housing developments and their costs of construction and their suitability for a particular site and their aesthetic appeal to an area and the demand curve that they face there and their utility connection options and the other regulations that they will be subject to apart from permit approval are all different in different places, so a developer's level enthusiasm for building a particular project in one city or another, or one neighborhood or another, is very unlikely to be exactly transferable... You might say that the auction mechanism would nonetheless take account of this because the developer would only bid amounts that would lead to profitability literally anywhere, but I don't think such amounts exist. ("Cool, the 50-story apartment building concept has been approved for construction on a vacant lot with no existing utility connections 5 km from the nearest other building and 30 km from the nearest bus stop! Let's go build it!")

danieltillett 8y ago
The location requirement can be covered by the bid proposal of the developer. The can say the development requires certain features. It will be in their interest to make this as broad as possible so they create the maximum competition between communities for the development. For example developers could make the conditions so tight that only one location met all the requirements pushing up the cost since that community would know this was the only site and so hold off bidding. Alternatively, the developer could set the conditions broadly so that more communities would bid lowering the cost. The nice thing about this is the friendlier the developer makes the proposal to a community the lower the price they will have pay. The community gets development that maximises their returns while the developer is encouraged to create community friendly developments.
- schoen 8y ago
  Thanks for the interesting response! I wonder how many developers currently think this way (in terms of explicitly specified sets of features rather than specific sites). And, what's more, how eager would they be to be seen to be thinking this way in a public bid? One thing that comes to mind is that some developers might not want to publicly specify some of the features that actually matter to them, for example things about neighborhood incomes, crime rates, homelessness, or other neighborhood demographics. Still, developers may feel that these things will significantly affect the suitability of a site to a profitable project, but not want to deal with the public relations aspects of spelling out their reasoning. I'm not sure how strong an argument that is against your proposal, but maybe developers would consider it pretty fundamental. Edit: Also, it's amusing to think about people trying to quantify aesthetic fit. "We want to build this development in a place that McMansion Hell thinks is overall pretty tacky, but not super tacky." "We want to build this development in a place with an average of 12 architectural classiness points, but in any case not more than 17 classiness points."
  - danieltillett 8y ago
    All those other considerations you mention will play a role, but they will affect the final sale price and hence the undeveloped land value. Developers will be worried about the spread between site acquisition costs (land + development bid cost) and final sale price. Locations with problems will have lower undeveloped land values. In practice this proposal would work best when land owners and communities work together to put together potential sites that meet developers needs. I think developers will hate this idea because instead of the whole surplus going to them and their corrupt buddies in government, it will have to be shared with the local community. Since the bid will be public there is no way to payoff someone in the planning department to get approval for your development. Of course from my perspective this is a feature not a bug.

DavidSJ 8y ago

I think communities already negotiate with developers. But what's good for the local community isn't the same as what's good for the region as a whole. The housing crisis is regional; the benefits from development extend far beyond the neighborhood or even municipality in question -- reducing housing prices all over the map. So you can't expect a negotiation between the developers and the community to account for that external benefit, and you're left with a tragedy of the commons where each community wants more housing supply, just not here.

danieltillett 8y ago
I think you are missing the point of my proposal. Rather than “negotiating” (think corruption) the communities only get the development they are happy with. Rather than developers spending their time in court fighting communities, they would spend their time creating attracting development proposals that communities would bid on. The current approach is designed to maximise conflict and minimise community benefit. Let’s think about creating a system that minimises conflict and maximises community benefit.

jessaustin 8y ago

It's a fine idea but adjustments would be necessary to account for the fact that a development in one location will generate a different cash flow than a very similar one in a different location. Also most communities who would take part in such a scheme would also simply approve proposed developments without it.

danieltillett 8y ago
I addressed this issue up thread - the developer just makes the conditions for the bid part of the bid documentation. It is in their interest to keep it broad so that they get more bids.

jimrandomh 8y ago

> imposes large costs on the current residents and home owners You mean, imposes large costs on landlords and home owners. Residents are made better off if they're renters.

pchristensen 8y ago
If development in the area is a bad thing, then it's definitely NOT being imposed on the landlord. If development in the area is a good thing, then the value accrues to the property, which benefits the landlord, leading to increased rents. The renter has to decide if the benefits from the development are worth the increased rent, and this will vary by person.
- lovich 8y ago
  Not if they're developing more supply of rental units. I'll give that this doesn't play out in practicality in a lot of places. My own neighborhood is currently constructing enough apartment buildings to double the number of units, but our rent still went up. This however is a function of such pent up demand. Nearly half of my coworkers have an hour+ commute and most of them would be love to move closer to the city if the pricea dropped, and that will only happen if more units are built. A 1-3% increase in available units probably won't do anything but change local neighborhood prices, but a city adding 10%+ in units everywhere is going to drop their average rent costs
danieltillett 8y ago
If it increases undesirable things like gridlock or noise then even renters suffer from development. While developments should lower rents (all things being equal) it does still have external costs to renters.
shados 8y ago
The only benefit renters have when new construction come in is that they can get the hell out instead of being stuck with "beep beep beep" trucks backing up at 6am and demolition tremors all day long for 3-5 years straight (yeah, I'm jaded). Anyone living there, regardless of if they own or rent, is affected by the changes. People currently there bear the burden, people who come in after reap the benefits.

stinkytaco 8y ago

Also, hold those developers responsible for fulfilling their obligations. I am, perhaps, a bit of NIMBY. I'm willing to accept that some of my concerns are not in the public interest. I don't want an apartment building in my neighborhood because of the impacts on street parking, traffic, noise, etc. All of those things negatively affect me, and so I take a lot of convincing. But another issue is that developers have a history of claiming they will ameliorate these issues by improving infrastructure, such as adding underground parking, upgrading sewers, building sound barriers, etc and then do not. Or they exploit loopholes to avoid their obligations. An example where I live is that new developments are required to have sidewalks. Developers simply tell homeowners they are required to build the sidewalk within 2 years which, of course, doesn't happen. 5 years later, the city goes in an builds them and applies specials to the home and everyone is unhappy except the developer, who walked away from the project long ago. Sometimes its seems that cities are so beholden to developers that they can get away with anything.

rayiner 8y ago
It’s the government’s job to ensure adequate infrastructure. The people that buy from the developer will be paying for their proportionate share of that new infrastructure with taxes. Forcing the developer to cover the costs of infrastructure is just a sneaky way to shift the tax burden from existing residents to new residents.
- singingboyo 8y ago
  The maintenance cost of existing infrastructure is paid for by existing residents. It seems sensible to have the up-front cost of adding new infrastructure covered by new residents/developers (who are later considered existing residents covering maintenance for the new, now-existing infrastructure). Why would existing residents ever agree to new development if they have to pay for it? (Either through taxes to upgrade infrastructure, or by needing to deal with insufficient infrastructure that doesn't get improved as needed) Maybe instead of directly performing the upgrades, developers should be paying extra to the government (either lump sum, or over N years) because in theory the government can then do a few large upgrades rather than developers doing many small ones, but the cost of new capacity should really be the responsibility of the people who need it (developers/new residents).

joe_the_user 8y ago

This terrible (imo) approach would require a huge amount of capital for people to either build or to live in a low-density community. Today, a big factor driving up rents is the amount of money coming into "hip" areas, seeking profits proportionate to it's investment. I can't see how this scheme wouldn't simply increase the problem - while trampling people ordinary intuition concerning property. The ideal situation imo is to have certain areas where very high density is the only use and other areas where low density is standard. Here the market would dictate an overall increase in density while relatively reducing the cost of buying land.

danieltillett 8y ago
How exactly would this proposal require a huge amount of capital to build? Your solution is to effectively steal the rights of the owners of the land (by taking away their ability to control density) without compensation and hand a windfall to developers. How do you think we ended up in the current NIMBYism situation?
- nwah1 8y ago
  Titleholders are merely stewards, at best, and it is they who regularly receive windfalls from the productive activity of surrounding individuals. The public are the real owners of the land.
  - danieltillett 8y ago
    You might find the titleholders disagree with this view and they have a rather large amount of power hence why we have developmental gridlock.
- joe_the_user 8y ago
  How exactly would this proposal require a huge amount of capital to build? With your "reverse auction" approach, the would-be builder has to spend money on both out-bidding others who who'd prefer other uses AND has to spend on the actual cost of building, so two/double costs. Your solution is to effectively steal the rights of the owners of the land. My approach modifies the rights of title holders. It's no more stealing than more other measures (such zoning) because it happens in the bounds of the right. Indeed, I am simply proposing extra-aggressive zoning to encourage density. Moreover, your approach also modifies land-holder rights. I mean, landholder have never had unconditional control of their land, that control has devolved to the state or the sovereign all the way back to medieval times and before.

Paul-ish 8y ago

Is this approach to development written up anywhere, or is this your idea?

danieltillett 8y ago
It is partially my idea in that I have read (long time ago) a similar approach for locating unpopular things like waste dumps, but I haven't seen it proposed as a solution for overcoming development paralysis. I have been surprised how many people have voted it down here. The primary post has been up and down like a yo-yo over the last 24 hours. I would really like to know why. I will try to write it up in more detail on my blog.
- Paul-ish 8y ago
  Writing it up is not a bad idea. If you could find citations from economists or research that has shown this to work (even if its in slightly different situations) I think it could be convincing.