Housing Reform Needs Real Alternatives

Policy Housing Reform Needs Real Alternatives Roger Valdez Contributor Opinions expressed by Forbes Contributors are their own. Roger Valdez is Director of the Center for Housing Economics. Following New! Follow this author to stay notified about their latest stories.

Got it! Sep 7, 2022, 09:30am EDT | Share to Facebook Share to Twitter Share to Linkedin YIMBYs have much more in common with NIMBYs that differences. getty The taxonomy of various political and intellectual approaches to the housing problem in the United States is important. Too often, distinctions with a difference are lost in battles over whether to build new housing and whether that housing should be subsidized or not.

My mantra, “we don’t need more affordable housing, we need more housing so that it is affordable,” attempts to highlight that key distinction: we need less regulation on the production of housing in the market so that its price comes down, not more money to subsidize non-profit, tax credit fueled housing. I’ve pointed out here before that from the outside, the so called Yes In My Back Yard (YIMBY) movement appears to be built on a market based intellectual foundation. It isn’t.

First, it is important to note that the YIMBY formulation is a response to NIMBYs, single-family homeowners whose response to new housing development is Not In My Back Yard. Those of us who have worked in urban planning or housing are familiar with what I prefer to call the “angry neighbor,” a person who offers red herring after red herring in the service of trying to stop new housing production that will, in the end, boost supply and cool off the red-hot equity in their investment, their house. When the angry neighbors in Seattle opposed microhousing – small apartments with shared amenities – they said they were too small; when developers tried to build new single-family housing on smaller lots, they said the houses were going to be too big.

But are YIMBYs really the opposite of NIMBYs? Also, are YIMBYs boosters of a free-market economy and an approach to solving housing problems that favors innovation, entrepreneurship, and buyers and sellers exchanging value in a rule-based economy? A post at Substack on the “ Left Nimby Canon ,” by Noah Smith, does a great job of drawing the political and ideological distinctions between YIMBYs and NIMBYs, but in doing so, makes it obvious that YIMBYs truly are another kind of liberal, favoring government intervention, and most importantly, wanting policy to achieve a set and politically ideological accepted outcome. And this is key, because free market thinking by definition does not demand a set outcome, but opportunity. The author of the post points out a classic NIMBY red herring offered by many opponents of new housing, induced demand.

If we build more housing, the argument goes, it will attract more demand, and thus the need for more supply. The resulting spiral will go into infinity meaning the prices will always “skyrocket” and the impacts of new growth, like rising prices, will make cities uninhabitable. The problems with this are obvious.

First, if a developer built 10,000 units of housing in a corn field in Iowa, there wouldn’t suddenly be a flood of 10,000 people trying to lease a unit. In the absence of jobs, housing doesn’t create a demand for itself. Jobs and economic growth and the desirability of a place create the demand for housing, and if none or little is created, prices go up.

Second, the reason why new housing is more expensive is the same reason is a new car is more expensive than a used car. As housing ages, it becomes less desirable than newer housing and therefore with less demand for it, it gets less pricey. And last, the Yogi Berra effect – nobody goes there anymore it’s too crowded – would suggest that if people didn’t like a city because of growth, they’d stop coming, and prices would fall.

MORE FOR YOU Biden’s Proposed IRS Bank Account Snooping Authority Runs Into State Resistance 2021 Diversity Green Card Lottery Winners To Be Shut Out Because Of Visa Deadline The Swamp Grew – Even Under President Donald Trump The discussion in the post doesn’t take these items on, but does address the NIMBY left’s allergy to supply and demand and their insistence that there is no “proof” that it exists. “Of course, no amount of studies will prove that market-rate housing always reduces rents everywhere. There are probably cases where it doesn’t! Market-rate housing driving down rents and pulling high-income people out of low-income neighborhoods not a law of the Universe, it’s just starting to seem like a general tendency” But in trying to defend more housing development that is “luxury housing” and too expensive and thus shouldn’t be built, the post offers what it suggests is a YIMBY argument, that new housing acts like a “fishtank” keeping yuppies away from older, less expensive neighborhoods.

The idea is that when Amazon AMZN arrives in that field in Iowa, creates lots of jobs, and the glassy high-rise housing follows, it will contain all the brogrammers and techies in those buildings keeping them away from the quaint town down the road. “And if the new fishtank units lure yuppies away from long-time residential working-class neighborhoods, that’s also good!” And the point made continues suggesting that, “new market-rate housing is pulling yuppies out of regular folks’ neighborhoods and sticking them in fishtanks — to everyone’s benefit” (emphasis in the original). And here is where taxonomy would put YIMBYs and NIMBYs growing off the same branch.

The notion that neighborhoods should stay the same is classic leftist thinking. I’ve been posting in this space for years , that trying to hold the ethnic and demographic composition of neighborhoods at a constant is not “to everyone’s benefit. ” On the contrary, neighborhoods can and should change and that change, if accompanied by mostly unregulated housing production, creates opportunity for more people to make economic gains.

One bomb usually hurled by NIMBYs at YIMBYs the post points out, is that YIMBYs are just capitalists and libertarians of the Ayn Rand school. One of them, Nathan Robinson, is cited in the post as suggesting that “YIMBYs are free-market dogmatists who believe that allowing market-rate housing should be the one and only tool of housing policy. ” Even I don’t believe that, but here’s a response on Twitter to that notion offered by Laura Foote a prominent YIMBY activist from California: “We need publicly subsidized and/or public housing too.

And we could transition to entirely public housing. I have no problem with that. ” The biggest problem with YIMBYs is their demand that everything work out exactly as they want it too, that is, the outputs have to please their prejudices.

If growth and new housing changes the demographics of a neighborhood, it’s bad, and some policy fix with a bunch of subsidies for non-profits is the answer. The policy that best represents the YIMBY world view is Mandatory Inclusionary Zoning, a scheme that imposes fees on new development and then hands the cash to non-profit developers. This is a form of bribery and is inflationary, making it morally suspect and, in the end, a policy that makes life worse for people with less money.

The YIMBYs can claim that the policy creates more housing by allowing more production in exchange for the fees, but the fees are paid for in the form of higher rents, and that drives up overall housing prices. But the YIMBYs can feel justified that the right ox is being gored and the non-profit sector can solve the problem; more housing for the good people at the expense of the bad people, private developers. But it’s renters that end up paying the price for a few very expensive subsidized units .

I may be one of the few proponents of what I have called “a conservative housing policy,” something I defined most recently at The American Conservative . Here’s a summary: “At the national level, a conservative housing policy would stop subsidizing locally created housing inflation and help needy families with direct transfers. It would reverse the long-standing subsidization of homeownership through restrictive land-use policies and easy money and abstain from trying to racially program neighborhoods.

Conservative housing policy would support an open market for a commodity without substitutes and a quick cash safety net for needy families. This would, in the end, be compassionate, offering individuals and families opportunity and a chance to realize it. ” This is a totally different branch on the taxonomy, and one that strangely hasn’t been embraced by many Republicans or conservatives.

I’ve spoken at conservative events and received a standing ovation for my comments about the free market only to be asked afterward by an attendee, “great speech but why don’t they require more parking in these new developments?” Hardly the stuff of Ayn Rand or Fredrich Hyek. So I agree absolutely with the posts conclusion: “As I see it, the disagreement between YIMBYs and Left-NIMBYs isn’t really about free markets vs. socialism — they’re all a bunch of lefties.

It’s about the vision of what a good city should look like. Roughly speaking, Left-NIMBYs are tied to the past, while YIMBYs want to build a city of the future. ” But unfortunately, today, there is no conservative counter movement.

Instead, when it comes to housing, the one thing that almost all American’s share is what the post lays at the feet of NIMBYS, a “grasping for an unreachable stasis. ” Everyone wants someone else to pay for the problem and few people believe that money – yes, profit – can be made producing more housing that can be affordable to people earning half or less of Area Median Income. Such a policy has never been pursued; it should be.

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