Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a University Professor and Director of Cities at the University of Toronto’s Martin Prosperity Institute, and a Distinguished Fellow at New York University’s Schack Institute of Real Estate.
Restricting housing construction does not just hurt developers—it makes housing less affordable for everyone. But to overcome neighborhood resistance, you need to understand what drives it.
Next week, Los Angeles will vote on Measure S, a ballot initiative that proposes a two-year moratorium on developments that required changes to land use.
The law could potentially limit both new developments and affordable housing. Even with an exception for affordable housing developments written into the law, critics say it could still further restrict affordability in the region.
For a growing chorus of urbanists, NIMBYism and land use restrictions are the culprit behind everything from growing income inequality to shrinking affordable housing, productivity, and innovation. A 2015 study estimated that land use restrictions costs the United States upwards of $1.5 trillion in lost productivity. The 2016 Economic Report of the President called for sweeping reform of zoning and land use restrictions to overcome these costly economic rents, build more housing, and stimulate the U.S. economy.
A recent white paper by Paavo Monkkonen sheds interesting new light on the connection between NIMBYism and housing affordability. It takes a deep dive into, on the one hand, neighborhood opposition and land use restrictions, as well as housing supply and housing costs in Los Angeles, San Francisco, and California’s other expensive housing markets. (The research was partially supported by an unrestricted grant from the Center for California Real Estate to the University of California Center Sacramento Center Housing, Land Use, and Development Public Leadership and White Paper Award.)
California offers an ideal case study in the effects of NIMBYism on housing prices. Its major metros—Los Angeles, San Francisco, Silicon Valley, San Diego, Santa Barbara—are some of the most expensive in the nation. They combine high levels of productivity and high levels of amenity—two factors which create the high demand which puts pressure on housing prices, and have fallen victim to harsh land use restrictions.
My own research finds that knowledge and professional workers are able to pay California’s higher housing costs. The burden falls largely on less advantaged blue-collar and service workers who have very little money left over after paying for housing. San Francisco has the highest housing costs in the country, while L.A. has the highest share of rent-burdened households. Across the state as a whole, renters need to make almost four times the state minimum wage to afford an average rent.
The crux of the California problem, the Monkkonen paper argues, is not the state’s restrictions on uber-high density building in and around urban centers, but the broader dependence on lower-density zoning across the board. Los Angeles may be a relatively dense city and metro (indeed, according to some basic measures, it is the densest metro in the country), but three-quarters of its residential land is devoted to relatively low-density single-family housing that only shelters half the city’s population.
But adding new supply in the form of high-rise towers in and around the core will do little to solve the overall housing affordability problem. For one, those towers are usually built for the wealthy, and luxury buildings often boost the price of housing in neighborhoods in and around where they’re built (prompting calls like this one for a luxury housing tax to fund affordable units). They can also displace people from their neighborhoods and change the character of those neighborhoods—things residents very much care about and will understandably seek to block.
To get beyond NIMBYism, we first must understand it. Neighborhood resistance isn’t just triggered by residents trying to prop up their home values or protect their neighborhoods from things they don’t like—it’s the product of policies that provide incentives toward homeownership and a regulatory system that encourages and prompts opposition.
Even if the economic arguments about the costs and negative consequences of NIMBYism reflect sound economic logic, they amount to little if they fail to address the very real concerns of neighborhood groups. Most regular citizens and neighborhood residents don’t think like dispassionate economists. According to a 2016 Building Industry Association poll, some two-thirds of San Franciscans surveyed do not think increasing housing supply improves affordability. Rather, they believe that land use regulations help to protect their neighborhoods.
Monkkonen goes on to parse four different strains of NIMBYism and their underlying motivations:
- Traffic and parking: Nothing activates wary homeowners faster than the threat of losing a parking space. People moving into new apartments tend to own cars at higher rate, and one study found traffic to be one of the most common complaints in opposition to affordable housing in the Bay Area.
- Strain on services: Other residents fear that parks and schools will be overrun, as well as the limits of sewer, power, and water resources to handle new development and more people.
- Environmental preservation: Some of the most prominent fights over development in California—like the Sierra Club’s resistance to Governor Jerry Brown’s “by-right” legislation—are over possible environmental damage from added density.
- Neighborhood character: Finally, residents are often concerned over how new construction will negatively impact historic and architecturally significant urban neighborhoods.
To fend off the four flavors of NIMBYism, the paper suggests several strategies:
- Make better use of existing housing policies: On this front, California has a unique framework—the Housing Element. With this planning law, regional housing needs are based on population projections, Councils of Governments allocate units to cities and counties, and cities update their local housing according to these needs. Monkkonen points out, however, that there are no consequences for noncompliance. He also notes that the method of using population projections is a “bad practice” for assessing the need for housing, because places with high-cost housing already deter people from moving to a place.
- Inclusive planning: This seems obvious enough—new development faces less neighborhood resistance when the neighborhood is included in the process from the git-go. But this means more than just holding public hearings, which are dominated by organized neighborhood groups as opposed to average residents. Social media and other communication channels can be used to tap neighborhood views and sentiments more broadly. One counterintuitive idea: the paper suggests that increasing the ways new projects can get approved “by-right” would allow more affordable housing to get built, because it would take less political influence in order to steer a high-density development into existence.
- Better data, information, and nonpartisan analysis: This means better educating residents and the public on the reality of housing development, housing policy, and affordable housing. Providing objective information on how building more housing and more affordable housing will not damage housing price and neighborhood quality can help lower the temperature on contentious debates over development.
- Shift land use decisions to the regional level: The paper joins a growing chorus of urban economists and urbanists who call for shifting land use decisions away from the local level and toward the metropolitan or even the state level. This would make it more possible to design a policy that encourages an increase in overall density—but would also require checks and balances to prevent abuses of less-advantaged neighborhoods.
There are other ways to combat NIMBYism. Yale Law School professor David Schleicher suggests using local tax policy to essentially co-opt NIMBY opposition to new development. The basic idea, referred to as “tax increment local transfers,” is to allow the residents of neighborhoods to share in the tax revenues that come from new development—for example, by rebating and reducing their own property taxes over a period of time. Others suggest that shifting from the current property tax to a land-value tax, which taxes property owners on the underlying value of the land itself, will create better incentives for more intensive land use.
But regardless of the precise mechanism employed, finding better ways to understand and counteract NIMBYism and create more vibrant and affordable cities is one of the most pressing policy issues facing urban America. The need to build more housing without removing community input is, as Monkkonen puts it, "a challenge we can no longer ignore."