Combating NIMBYism

Over in Linky Friday, Will posted an essay from Matt Yglesias on how Seattle was able to partially or completely solve their housing shortage and how cities like San Francisco and New York could learn. The lesson seems to be more about how Washington State’s more centralized building permit system works as a safeguard to excess NIMBYism. Nonetheless, North asked how we could combat local NIMBYism and stop housing crisis issues. Here my thoughts:

1. Recognize that NIMBYism is economically rational
   A lot of anti-NIMBY writers seem to see NIMBYists as being nothing more than naive children who are constantly shooting themselves in the feet. They seem to see anti-housing activists or anti-building activists as being renters who want affordable housing but refuse to allow the kind of building that lowers housing costs for a variety of touchy-feely reasons. There might be some truth to this but it is not all anti-building activists. The truth is that NIMBYism simply is economically rational for property owners, whether they rent their property or live in it. Housing is the biggest asset that many Americans own. If you are a property owner, you want your land to fetch a maximum price at market in case you need to cash out or want to cash out. So it simply makes sense for the property owners of San Francisco, New York, and other hot markets to want small housing stocks and low growth. The majority of city dwellers might rent but they often don’t have the actual capital or political capital to seriously organize against the lobbying power of landlords and property owners who often have their own paid advocacy groups. Renters tend to operate on much more shoestring budgets when it comes to political organizing and are probably more concerned with short-term goals like staying around. Getting renters to organize for a twenty-year cure is going to be hard. I am always amazed at the idea that NIMBYism is bad for property owners. It seems to me that NIMBYism is quite good for property owners and the property owners know this. I feel like the anti-NIMBY advocates will develop better arguments and tactics when they understand this.
2. The daunting, long and boring work of democracy
   The best way to encourage more building is to organize, organize, organize. I often see signs in San Francisco that state “Notice of Public Hearing.” These notes seem to be posted whenever someone wants to do some kind of construction from a business expansion to a home remodel to building a condo. I wonder if pro-building advocates attend these meetings. The meetings are inconvenient and often filled with cranks (my general experience with public meetings is that they tend to be filled with people who have a lot of free time and often some imaginary axes to grind.) People on the pro-building side tend to have busier jobs and just want hang out with families and friends after work. They don’t want to spend their time listening to or arguing with cranks at public hearings. But these public hearings show politicians who cares about what and if the pro-building side can’t bother to show up, why should the politicians listen?
3. Some anti-free market stop gaps might be needed.
   The million dollar question with the housing crisis debate is when will relief come to the most vulnerable citizens like senior citizens on fixed incomes and minority groups who tend to be the hardest hit by gentrification and displacement. The issue with cities like San Francisco and New York is that they might need to build housing at an ungodly clip in order to help the most vulnerable. This is probably not going to happen and is also financially impossible because the current building trend goes for luxury condos and the condo developers also have reasons to want a slower market. Financing money can also dry up and leave a lot of buildings in incomplete states. A condo was being built across from LeeEsq’s building in Brooklyn. The money for the condo dried up around 2007-2008 and the developers just kept the project in an incomplete state until 2014 when they got financing to complete the construction. Vulnerable citizens like people on fixed incomes and minority groups have no reason to be pro-building if the lower housing prices are ten or twenty years down the road. That is too far down the road and hypothetical for people to get excited about. Part of the solution to getting more building done might be a kind of grand bargain that actively seeks to reduce displacement while the building occurs. Saying “you can come back in ten or twenty years” is not going to cut it. The pro-building crowd seems loathe to do anything that might slightly go against a market based solution.

Sadly, I am not sure what kind of grand bargain can happen because the housing market involves too many working parts. You have renters, home owners, developers, and landlords. Each of these groups has different goals and ends but something is going to be done for renters while the housing gets build. Perhaps anti-eviction laws? Maybe encouraging home ownership is bad policy, but the replacement policy is going to need to make long-term renting possible. Young people might be able to move every year or every other year, but this is harder for older people. The reason I get frustrated with Matt Yglesias is that he seems to think moving year to year is just as easy at 57 or 73 as it is at 24. I think that there is a valid role for government regulation and policy to ensure security and stability especially for vulnerable citizens like the elderly. People should not be taken away from their support networks.

Affordable housing is a long term crisis for many Americans. A significant number of renters in the United States pay more than 50 percent of their income to rent. The recommended rate is 30 percent of income should go to rent. The problem seems like it is going to get worse before it gets better. The only thing that would make San Francisco more affordable¹ is probably a huge slump and burst in the current tech boom. A lot of things need to be done but no one seems willing to compromise to make these things happen. I remain convinced that the best solution is going to involve streamlining the building permit process along with regulations to help current renters even if this goes against free market ideology.

Image by Dizzy Atmosphere

Image by Davide D’Amico

1. Has there ever been a time when high rents significantly fell? Friends who went through the first Tech Bubble in San Francisco tell me that rents did lower in the early aught recession but they did not go as low as pre-tech boom levels. Are rents just sticky?