Empathy for the NIMBY Devil

Everyone is conservative about what they know best. And what everybody knows best is their own home

I’ve been meaning to write something about the YIMBY movement for some time, and Matt Yglesias’s latest gives me a good opportunity to do so. It’s a strong, bold, clear statement in favor of radical housing reform in his home town, a subject Yglesias knows much more about than I do. Why, then, did I feel like on an emotional level, it wasn’t as convincing as it should be?

The case for radical housing reform in a city like D.C. is straightforward. Building more housing in highly-desirable urban cores will make housing more affordable generally, not only in those cores but in the surrounding suburbs. More affordable housing will in turn make it easier for people to get their first homes and start families. A lower cost of living will make it easier for companies to hire at nationally-competitive salary rates, which means a more robust job market. More housing means a higher total value to the housing stock and a greater population, both of which grow the tax base, which means more money for all kinds of social goods. As the story spins out, housing reform unleashes a veritable bonanza of benefits that will help fight climate change, reduce crime, improve education—you name it. It’s such an obviously positive story that it’s hard to believe anyone would be on the other side.

Yet most people are. I think it would be worthwhile, for both political and substantive reasons, for advocates of the YIMBY agenda to contemplate why that might be.

The first, simplest way to come to an answer is by asking: who are you in this story? If you imagine that you are the mayor of Washington, D.C., then the case should be very persuasive. The most certain part of Yglesias’s argument is that more building means a higher tax base. More revenue means more money to spend, and getting to spend money is both the fun part of being mayor and the best way to get reelected. So if you’re the mayor, and you’re politically able to build, you should, and you will.

Most people, however, do not imagine themselves to be the mayor when they think about the effects of policy. Nor do they think of themselves as participants in an abstract general interest. They think of themselves as themselves, or as themselves plus their kids, their parents, their neighbors. How housing liberalization will benefit them directly is considerably less clear.

Yglesias talks about the citizens as collective land-owners, but only homeowners are land-owners, and over 50% of D.C. residents rent their homes. Tenants, of course, suffer greatly when rents skyrocket, as they have in the most desirable cities, and the only practical ways to keep rents from skyrocketing are to increase supply or to tank the local economy. Of those two, increasing supply is clearly preferable. But as Freddie de Boer points out (and he himself is a species of YIMBY), the increase in supply operates with a time lag, one that is likely too long to benefit current renters, particularly those already in danger of being priced out of the market. From their perspective, they needed housing abundance years ago; if it comes years from now, it’ll be too late to help them—and in the meantime, deregulation might well make it easier to get them evicted.

If you’re a home-owner, meanwhile, it’s also not obvious how more abundant housing benefits you directly. Yes, in aggregate the city’s land will become more valuable—but that increase in value won’t be evenly distributed. If I sell my one-family home to a developer who is now able to put up a high-rise, I should do very well. But the point of putting up all those high rises is to prevent housing prices from continuing to go through the roof, which means that if a developer didn’t want to buy me out (because my location wasn’t optimal for building a high-rise, say), then the increased housing supply should be putting a lid on the value of my house. There’s a reason why the core of NIMBY resistance is homeowners: because YIMBY’s explicit aim is to make housing more affordable by making it more abundant.

Yglesias is aware that there are rational economic reasons why people oppose liberalizing the housing market, which is why he proposes bribing people in various ways to support a policy that is collectively beneficial even though it might not obviously benefit them directly. He proposes turning parking permits into property, for example, so that holders of those permits would benefit from a rise in parking demand rather than suffering. He also proposes allowing low-income neighborhoods to opt out of up-zoning, directly addressing their fears that they would simply be evicted en masse in the wake of radical liberalization. From the YIMBY perspective, political opposition is a collective action problem where everyone’s individual interest is in keeping development restricted, but the general interest cries out for more development, and if that’s correct then an enlightened leader would propose policies that tie the individual interest to the general interest so as to win political support for a program that people would otherwise understandably be skeptical of. But the “general interest” remains something of an abstraction. Who actually benefits if D.C. transitions to more abundant housing?

I think the predominant answer to that question, apart from the mayor and those who are involved in the building itself (developers, construction workers, etc.), is “people who want to move to D.C. for work.” Those people previously had hard choices to make about longer commutes versus higher prices for less space, or versus foregoing an exciting career opportunity. Now their choices, and their lives, will get a bit easier, and more of them will choose to make the move. That’s certainly good for them, and because it’s good for the local economy it’ll have a variety of positive spillover effects that local businesses and their employees will feel. But those are secondary effects; the primary benefit, I suspect, will be to those moving in.

That’s not an argument against housing deregulation. On the contrary: it’s a huge problem, economically and culturally, that America is becoming a less-mobile society, and high housing costs that inhibit people from moving to areas with robust opportunity are a big reason why. I’m just pointing out that it’s a political problem if many of the biggest beneficiaries of your reform are people who currently can’t vote for it because they don’t live there yet.

Indeed, this is a common difficulty with arguments for liberalization. You see it with immigration, for example. Higher rates of immigration economically benefit the country as a whole—there’s a robust literature supporting that contention and almost nothing on the other side. The distribution effects associated with immigration are more contested; there’s some evidence that high immigration, particularly of unskilled workers, holds down wages at the low end and thereby increases inequality, but there’s also evidence pointing in the opposite direction, showing that the rise in economic activity associated even with low-skilled immigration ultimately benefits native unskilled workers because they frequently are not in direct competition for jobs in the same sector. But regardless, even if the distribution effects are overall positive rather than negative, much of the aggregate economic benefit to immigration is captured by the immigrants themselves—precisely what you’d expect given the high cost and risk of immigration in the first place. There’s nothing wrong with that, of course—it’s one of the great things about America’s historic openness to immigration that it makes it so much more possible for people better their lives simply by moving here, and with distribution effects contested and the aggregate benefit clear, the case for immigration on the basis of the general interest is robust. But it is still a political problem if natives ask, “what’s in it for me—or even for my children and my neighbors?” and most of the answer is participation in an abstraction rather than something tangible.

Again, I’m not making an economic argument against housing liberalization (or against immigration). Restrictions on development really are causing severe economic distortions in the most desirable cities to live in, particularly in California, and that has started to break the political logjam preventing liberalization. But there’s a reason the logjam exists in the first place, and it’s not just that people are selfish and myopic (though they are). It’s that it’s much clearer what they have to lose than what they have to gain.

Which brings me to the core psychological matter that I really think is a blind spot for some of the YIMBY folks, Yglesias included. Yglesias is a dynamist. He likes growth as such, and his instinctive understanding of change is that, all else being equal, it’s happening because of people’s choices, and therefore should be welcomed. Capitalism depends on embracing that point of view (as does every version of socialism that derives from Marx), on seeing creative destruction as an essential part of progress. But it’s not the way most people think, naturally. Most people are relatively risk-averse and biased toward loss-avoidance rather than toward return-maximization.

Moreover, the closer you are to the edge the more likely you are to exhibit this bias, the more determined to risk losing what you have. The NIMBY impulse is quintessentially conservative, and there’s nothing weird about lower-income people being conservative. Yes, poor people play the lottery, but that’s precisely because it’s a risk with an extremely fixed and manageable downside: the price of the ticket. It’s a shitty, negative-expected-value investment, but it is quite thoroughly boxed. Proposals to deregulate housing, or to reduce trade barriers, or other similar liberal (in the classical sense) reforms obviously increase the pace of change, and they don’t obviously increase most individuals’ sense of power or control over their environment. On the contrary: many people reasonably suspect that the beneficiaries will be those who already have a lot of power and control over the collective environment rather than folks like them. That’s why they instinctively distrust them.

It is possible to overcome that instinct and those biases, to build a constituency for liberalizing change. Most people understand that if we want the economy to grow, that means some businesses will fail, and sometimes people will lose their jobs. We accept, mostly, that capitalism is a whirlwind of change. But here’s the thing: home is supposed to be a haven from those buffeting winds. So it’s bound to be especially hard to convince people that this is the area that should be liberalized, that the risk you should take for the greater good is that your neighborhood changes radically, or is dispersed entirely. Even if you personally come out economically ahead, that might not feel like winning.

I’m on team YIMBY. When development questions come up for a vote, I vote yes. But I understand the sources of distrust. My wealthy neighbors don’t trust that developers have any interest in building the kind of neighborhood that they would want to live in, and want to preserve the historic character of the place they moved to because that’s why they moved here. My poorer neighbors across the park don’t trust that there will be anywhere left for them to live if developers are given the option of building at market rates wherever they want. They both cling to cartels that are economically destructive because they are clinging to the home they know, even as part of the effect of those cartels is to make it less and less possible to keep things actually as they are.

I empathize with that desire. I wish I felt like more YIMBYs did.