What if there is a tax incentive/differential to agree to be in an YINBY area? For example 1.5% in NIMBY, and 1% in YIMBY? Let people elect their choice, AND pay for it.
The early part of this post seems to ignore that NIMBY literally means “not in my backyard”. Why would anyone be clamouring for more housing or more infill development in their own backyard? It’s in the name.
The problems is of course that everyone sees the problem, they just want the solution to occur elsewhere (or add in your other pet causes like X% social housing or government built or Y% of tenants are refugees, or what have you)
The point I was trying to make, however clumsily, was that it is an implication of the house-price view of NIMBY that, other things being equal, people will try to maximise the value of their assets. One way to do this is try to seek planning permission to build more on your plot. That is one sure way to increase the value of the land!
I understand your point: NIMBYs don't do that, of course they don't, they are NIMBYs! And I very much agree. I was attempting to show that the 'maximise property value' model of NIMBYs behaviour is incorrect.
I agree with your last point and it is an implication of the concentrated costs/dispersed benefit model of NIMBY. However, what I was trying to argue is that the existence of (uncompensated) concentrated costs is the product of policy and not an inevitable symptom of development itself.
With the right bargaining system in place, I hope, everyone will want the solution to occur near them so that they can capture the gains!
Nice article. One point I would make though is that although it's true that most people want more houses to be built and also for house prices to decrease, people don't always necessarily see the link between the two. That is to say, some people who want lower house prices, (wrongly) don't believe that building more housing can help curb prices. Similarly, it's possible that some house owners who might want prices to go up don't object to more housebuilding elsewhere on the basis that they don't think it will affect house prices. More rationally, they might also just conclude that price changes will be minimal and it would probably just reduce the rate of house price inflation.
One hope is that, under this model, they won't have to believe this (true) claim about supply in order to support local building. The uplift for them will do the talking.
Part of the problem is that local benefits aren't counted as much as local costs are.
If there is a new plan, and 90% of people like it, then those 90% of people go on with their day, and the remaining 10% of people start raising objections.
And it's become common practice to buy off local objectors one way or another. So there is an incentive to keep objecting to a deal that benefits you, in the hope that it's changed to benefit you even more.
One interesting effect of this approach is that it may address concerns from long term landowners who may stand to benefit in the longer run (5-10 years) but it doesn't solve problems for renters or people working on a 1-3 year timescale. For renters, there's no upside from the short term local disruption eg. Building noise, road closures. I suspect the best way to cut them into the YIMBY deal is direct subsidy to offset partially the rental cost
I suppose the big way that renters get cut into the deal is through a functioning rental market. More direct ways to cut them in though would be great. I know, for instance, the street votes proposal explicitly involves renters in the ballotting process.
And yet nimby's are only too ready to complain that schools, shops, pubs, etc in their area are closing through lack of customers. And/or that their children can't afford to buy a home in the area. Bizarre.
Yes, typically what a properly designed Land Value Tax could do. If you pay your taxes on the value of the land you basically only partially owns it. And you are more willing to see its value decline (the concentrated cost is shared among all taxpayers who see tax revenues decline).
Under this option, where do the current owners live during the construction period? Would temporary housing nearby be part of the bargain? If the local area already has a shortage of housing, would the current residents be forced to live in another area temporarily?
Any kind of large scale renovation or regeneration requires a temporary increase in demand elsewhere when people move out to allow for construction.
Of course, if everyone tried to do a SPZ at once in the current market, I suspect they will not be able to find somewhere to live (it would be the same if everyone tried to do a rennovation at the same time). I suspect people will stagger this to suit them.
SPZs would be a voluntary system so I don't foresee anyone being forced to live anywhere. If they would like to do one, one of the constraints that they will be working with is finding somewhere to live in the meantime.
If temporary housing is not part of the contract, then that is an additional cost that the current owners would have to swallow: two relocations plus the cost of temporary housing during the construction period. Since most landlords want 1-year leases for rentals plus deposits, this complicates the transaction even more.
If I were the current owner, my new housing would need to be much better, or I would need extra cash to make it worthwhile.
In many cases, the surplus will be such that relocation costs could be covered. The particular contracts will, I suspect, differ from case to case. But this will be, as you say, an important part of any deal-striking at the local level.
Encouraging bargaining make sense, but it doesn't address the fact the costs are very concentrated, whereas the benefits of many projects are thinly spread out. A new highway helps many commuters, but few individuals who stand to benefit would bother giving input even if it were solicited.
The SFZ and land readjustment mechanisms mentioned in the piece offer concentrated benefits to locals engaging in densification, so they are incentivised to bargain. I think it's land readjustment that would be used for the highway issue.
Bargaining is supposed to address those concentrated costs! The uplift from some projects will be so great that many of those who currently would say no would, I expect, will be vying for a project to come to their area.
Brainstorming…
What if there is a tax incentive/differential to agree to be in an YINBY area? For example 1.5% in NIMBY, and 1% in YIMBY? Let people elect their choice, AND pay for it.
I like this. It is somewhat like "fiscal zoning" as discussed in 'Growing the Growth Coalition' by Judge Glock (issue 12 of Works in Progress!)
The early part of this post seems to ignore that NIMBY literally means “not in my backyard”. Why would anyone be clamouring for more housing or more infill development in their own backyard? It’s in the name.
The problems is of course that everyone sees the problem, they just want the solution to occur elsewhere (or add in your other pet causes like X% social housing or government built or Y% of tenants are refugees, or what have you)
The point I was trying to make, however clumsily, was that it is an implication of the house-price view of NIMBY that, other things being equal, people will try to maximise the value of their assets. One way to do this is try to seek planning permission to build more on your plot. That is one sure way to increase the value of the land!
I understand your point: NIMBYs don't do that, of course they don't, they are NIMBYs! And I very much agree. I was attempting to show that the 'maximise property value' model of NIMBYs behaviour is incorrect.
I agree with your last point and it is an implication of the concentrated costs/dispersed benefit model of NIMBY. However, what I was trying to argue is that the existence of (uncompensated) concentrated costs is the product of policy and not an inevitable symptom of development itself.
With the right bargaining system in place, I hope, everyone will want the solution to occur near them so that they can capture the gains!
I'm very happy for development to happen in my backyard if I get to share in the benefits, but not if I am simply expected to suck it up and bear it.
Nice article. One point I would make though is that although it's true that most people want more houses to be built and also for house prices to decrease, people don't always necessarily see the link between the two. That is to say, some people who want lower house prices, (wrongly) don't believe that building more housing can help curb prices. Similarly, it's possible that some house owners who might want prices to go up don't object to more housebuilding elsewhere on the basis that they don't think it will affect house prices. More rationally, they might also just conclude that price changes will be minimal and it would probably just reduce the rate of house price inflation.
Research article on this:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4266459
Only for FT subscribers (sorry):
Repeat after me: building any new homes reduces housing costs for all - https://on.ft.com/3PEGBEZ via @FT
Totally agree!
One hope is that, under this model, they won't have to believe this (true) claim about supply in order to support local building. The uplift for them will do the talking.
Part of the problem is that local benefits aren't counted as much as local costs are.
If there is a new plan, and 90% of people like it, then those 90% of people go on with their day, and the remaining 10% of people start raising objections.
And it's become common practice to buy off local objectors one way or another. So there is an incentive to keep objecting to a deal that benefits you, in the hope that it's changed to benefit you even more.
One interesting effect of this approach is that it may address concerns from long term landowners who may stand to benefit in the longer run (5-10 years) but it doesn't solve problems for renters or people working on a 1-3 year timescale. For renters, there's no upside from the short term local disruption eg. Building noise, road closures. I suspect the best way to cut them into the YIMBY deal is direct subsidy to offset partially the rental cost
Interesting ideas.
I suppose the big way that renters get cut into the deal is through a functioning rental market. More direct ways to cut them in though would be great. I know, for instance, the street votes proposal explicitly involves renters in the ballotting process.
Great piece and I like the sound of SPZs. They seem similar to Street Votes but at a greater scale.
And yet nimby's are only too ready to complain that schools, shops, pubs, etc in their area are closing through lack of customers. And/or that their children can't afford to buy a home in the area. Bizarre.
Yes, typically what a properly designed Land Value Tax could do. If you pay your taxes on the value of the land you basically only partially owns it. And you are more willing to see its value decline (the concentrated cost is shared among all taxpayers who see tax revenues decline).
Interesting idea.
Under this option, where do the current owners live during the construction period? Would temporary housing nearby be part of the bargain? If the local area already has a shortage of housing, would the current residents be forced to live in another area temporarily?
Great point.
Any kind of large scale renovation or regeneration requires a temporary increase in demand elsewhere when people move out to allow for construction.
Of course, if everyone tried to do a SPZ at once in the current market, I suspect they will not be able to find somewhere to live (it would be the same if everyone tried to do a rennovation at the same time). I suspect people will stagger this to suit them.
SPZs would be a voluntary system so I don't foresee anyone being forced to live anywhere. If they would like to do one, one of the constraints that they will be working with is finding somewhere to live in the meantime.
If temporary housing is not part of the contract, then that is an additional cost that the current owners would have to swallow: two relocations plus the cost of temporary housing during the construction period. Since most landlords want 1-year leases for rentals plus deposits, this complicates the transaction even more.
If I were the current owner, my new housing would need to be much better, or I would need extra cash to make it worthwhile.
In many cases, the surplus will be such that relocation costs could be covered. The particular contracts will, I suspect, differ from case to case. But this will be, as you say, an important part of any deal-striking at the local level.
Encouraging bargaining make sense, but it doesn't address the fact the costs are very concentrated, whereas the benefits of many projects are thinly spread out. A new highway helps many commuters, but few individuals who stand to benefit would bother giving input even if it were solicited.
The SFZ and land readjustment mechanisms mentioned in the piece offer concentrated benefits to locals engaging in densification, so they are incentivised to bargain. I think it's land readjustment that would be used for the highway issue.
Bargaining is supposed to address those concentrated costs! The uplift from some projects will be so great that many of those who currently would say no would, I expect, will be vying for a project to come to their area.