Anyone who follows zoning has witnessed this drama:
A developer requests a zoning change to allow a modest apartment building next to a mostly single-family neighborhood. The request prompts howls of protest from the neighborhood’s homeowners. At the zoning hearing, one homeowner after another trudges to the microphone to urge, earnestly and sincerely, that the development threatens his neighborhood’s character, the quiet and peaceful enjoyment of his home, and the lives of his children and small pets. If the neighbors think the hearing will go against them, they also will decry the lack of public process (regardless of how much process has taken place), and level accusations of gentrification or nefarious devotion to profit. Nothing has the potential to turn the bourgeoisie into revolutionaries quite like a zoning fight.
NIMBYism would be comical if it weren’t so damned effective.
But, unfortunately, NIMBYism is effective indeed. It has become increasingly difficult to build new housing in our most productive cities and our nicest neighborhoods. Over the past three or four decades, homeowners objecting to development have systematically curtailed the supply of housing where we need it most. The consensus among economists, on both the right and the left, is that zoning has driven up home prices, exacerbated economic segregation, and created a drag on the national economy by redirecting migration away from rich, high-productivity regions to poorer, low-productivity regions.
Although there is gads of research on the effect of strict development regulations, there has been surprisingly little analysis of its root cause. Strict development regulations do not materialize out of thin air, after all: they are the result of sustained, consistent political pressure by homeowners who object to development near their homes.
This background political pressure is taken as a fixture of the political environment of modern American cities. We have coined a term — “NIMBY” (for “Not In My Back Yard”) — to describe it.
The term, alas, has become trite. We can agree that “NIMBYism” is a bad thing (despite occasional attempts by homeowners to claim otherwise). It signifies, vaguely, opposition to development made for selfish reasons. Beyond that, the term lacks clear content. After all, it can’t be the case that any objection to any sort of proposed development constitutes “NIMBYism.” Was Jane Jacobs a NIMBY for battling Robert Moses’ plan to plow a superhighway through Greenwich Village? Is a homeowner a NIMBY for objecting to a paper plant, smoky barbecue pit, or some other plainly objectionable use next to her home? Nothing prevents us from labeling either a “NIMBY”, but, as the term is commonly used, neither arguably qualifies. Both Jacobs and the hypothetical homeowner could make a straightforward case that the proposed uses, whatever their public benefit, would inflict significant costs upon them personally. Objecting to development merely because it imposes disproportionate environmental costs on the objector is not the kind of selfishness we mean by “NIMBY”.
I contend that it is a useful exercise to think methodically about NIMBYism. Developing a sound theory of NIMBYism will, of course, enable us to define NIMBYism. The working definition used by most today is little more sophisticated than, “I know it when I see it”.
But if a “theory of NIMBYism” is to be useful, it must explain NIMBYism as well as define it. We lack a theory that explains why homeowners object when they do. To be clear, the central puzzle is not why homeowners object to development, but why only some homeowners object. Homeowners in some places seem to object to every garden-variety proposal while homeowners in other places exhibit only indifference. On average, California homeowners tend to object to development more often and more vigorously than Texas homeowners (and have more tools to do so). But there is plenty of variation within each state — Austin homeowners are more reliably “NIMBY” than Houston homeowners — and, perhaps most significantly, plenty of variation even within cities. Within Austin, Hyde Park homeowners are more likely to object to development than homeowners in Dove Springs. A useful theory of NIMBYism explains why some homeowners have an incentive to object to development while others do not.
There are other puzzles that any sound theory of homeowner obstructionism ought to solve. For example, why do homeowner objections to development seem to end at their neighborhood’s boundary? If NIMBYism is an attempt to cartelize the supply of new housing, homeowners ought to systematically object to development anywhere, or at least nearby, rather than just within their neighborhood. But homeowners tend to show little interest in development proposals one or two neighborhoods over.
Why are homeowners more likely to engage in NIMBYism than renters? And why do the exceptions to this rule tend to occur in rent-controlled cities?
Why is obstructionism concentrated among homeowners rather than other types of property owners? Apartment owners, for example, have a general interest in limiting the supply of competing product, but one rarely sees an apartment owner speak at a zoning hearing against new development.
Why has NIMBYism intensified over time? Zoning was widely adopted nearly a century ago. Homeowners, presumably, have always cared about their home values. If NIMBYism is simply about “protecting home value,” why is NIMBYism more prevalent today than in the 1930s, 1950s, or even 1970s? And why has it grown so much more sophisticated?
A good theory of NIMBYism will not only explain the phenomenon of homeowner obstructionism, but offer a basis for realistic policy proposals. Systematic, institutionalized NIMBYism, such as that pervading California and the northeastern megalopolis, imposes serious inefficiencies on the economy and exacerbates social inequality and segregation. As others have pointed out, though, the cure prescribed by “market urbanists” — “Loosen zoning restrictions!” — is little more than a pipe dream. A better understanding of NIMBYism might help us craft remedies that stand a chance of being implemented.
Thus, this blog, which is my attempt to lay out a theory of NIMBYism.
My central thesis is that NIMBYism is about monopolizing access to neighborhood amenities. In the absence of zoning restrictions on the number of housing units in a neighborhood, neighborhood amenities would be a public good. Zoning converts neighborhood amenities from a public good (a partially non-rivalrous, non-excludable good) into a “club” good (a partially non-rivalrous, excludable good). Because “club” membership is bundled with home ownership, zoning causes the value of neighborhood amenities to be capitalized into home prices. NIMBYism can be thought of as the practice of objecting to development in order to protect the value of “club” membership.
Homeowners will only spend the effort to object where there is something to preserve. And, in most neighborhoods, neighborhood amenities have no “club” value. The neighborhood may not be very nice, so that the value of the neighborhood’s amenities is zero or negative. The neighborhood may have many other close substitutes, so that no one is willing to pay a premium for its amenities. Or the neighborhood may enjoy particularly attractive amenities, but the zoning allows practically unlimited development, preventing homeowners from capturing the value of those amenities. (Downtown neighborhoods tend to be a specific example of the latter). Development in neighborhoods like these tends not to spur NIMBYism.
There are plenty of neighborhoods, however, in which the value of neighborhood amenities is capitalized into home prices. These are neighborhoods with valuable amenities that lack close substitutes and which are, for lack of a better word, “under-zoned.” Homeowners in these neighborhoods have strong incentives to obstruct increases in zoning entitlements and to agitate for down-zonings in order to protect the value of club membership. And they do.
The foregoing is is just a sketch. In coming posts,I will discuss congestion and overuse externalities, environmental and social amenities, the concept of “prestige,” and the difficulty homeowners face in credibly signaling the effect of development on neighborhood amenities. I will explain why prestigious neighborhoods like down-zonings, and why historic preservation, which can be thought of as the ultimate down-zoning, is particularly popular. I will discuss why “neighborhood planning” is one of homeowners’ best tools for propping up club value. And I will try to explain why NIMBYism tends to spread from neighborhood to neighborhood and to intensify over time.
I will also discuss other types of regulation that should be thought of as zoning’s close cousin. Regulations that restrict parking to neighborhood residents, for example, are, like zoning, attempts to limit outsiders’ access to neighborhood amenities. When a neighborhood enjoys particularly good access to downtown or another amenity, this proximity is itself an amenity. In such neighborhoods, homeowners can be expected to oppose street connectivity in order to monopolize the benefits of this proximity.
I hope to work in some policy proposals. The chief one is, “When you find yourself in a hole, stop digging.” It may be politically impossible to loosen (much less eliminate) restrictive single-family zoning in established neighborhoods. But we can stop the practice of automatically applying single-family zoning to large swaths of suburban and exurban greenfield tracts. There is no particular constituency for zoning fringe greenfields exclusively for single-family use, so cities ought to stop doing it. This practice merely begets the next generation of NIMBYs. Those greenfields are tomorrow’s opportunities for infill.