"The big barrier to deregulation is not homeowners’ selfishness but denial of Econ 101." For a good example of this, see the reader comments on the NYT site. I had low hopes...and it was worse than I thought it would be.
I didn't read many NYT comments, but those I did read said that the problem is population growth, not regulations. That's false, but they seem to think that a shrinking population would be the panacea policy. Maybe you could write a quick article for Bet On It about the dangers of a population shrinkage?
It's worse than you think. According to the NYT comments, rising house prices are due to immigration, greedy developers, monopoly and the real estate lobby, and anyway, Not In My Back Yard noway nohow.
I know you talk about building your own bubble before, but reading the comments by the readers in NYT sections is a little discouraging, because people outside the bubble believe SO differently and knowingly argue against BBB/YIMBY position with irrational points.
While it’s embedded throughout the article, I’d love to see you explicitly state the moral reason(s) people should support YIMBY, or at least why NIMBY is an immoral position, when you write to people outside the bubble. Maybe YIMBY needs to be a “luxury belief” (Rob Henderson) - “I can afford to sacrifice my net worth that’s heavily tied to my property value in order for upper-middle class families to live near me.”
> Even sympathizers often believe that housing deregulation will never happen. They blame self-interested voting, arguing that because most Americans own homes, they will stonewall any policy to make homes cheaper.
Very true and applies to most countries. Homeowners identities are wedded to the value of their homes and wish for ever increasing prices. Partly because it erodes their debts (when there’s a mortgage outstanding) and creates a store of value for retirement. Falling prices would be most home owners worst nightmare. To turn homeowners from NIMBY to YIMBY perhaps tax systems need to change. I’m a homeowner and for the sake of the younger generations and social cohesion I’d be willing to go YIMBY (deregulate and build, build, build).
There are whole lot of behavioral factors like this, such as wage stickiness. It is one of the reasons why low, consistent inflation is good. It allows for price decreases in real-terms with requiring them in nominal terms.
So one approach is to figure out how to just keep prices nominally stable while increasing supply, that could prevent significant blowback. Note though, two cities with some of the highest rates of development in the past few years (Austin and Raleigh) also have continued to see price increases because the demand still outstrips supply. YIMBYism, when applied to these areas is just preventing _even higher_ costs. But that also gives us more room to maneuver with regulation
Even with massive deregulation, it would take the highest priced places, like SF, 75 years to reach a free market equilibrium. A 50% or even 75% drop in real prices combined with 75 years of 2% nominal price increases will prevent prices from going down.
What I have been seeing is a growing trend in urban areas to tie housing construction to social justice policies - putting governmental bureaucracies increasingly involved in who can live where, what prices people should pay for housing, and where construction would be approved. When cities demand that X % of any new construction must be a set-aside for low income housing they effectively are “taking” private property for some notion of public good.
Great piece. I hope it gains traction.
"The big barrier to deregulation is not homeowners’ selfishness but denial of Econ 101." For a good example of this, see the reader comments on the NYT site. I had low hopes...and it was worse than I thought it would be.
I didn't read many NYT comments, but those I did read said that the problem is population growth, not regulations. That's false, but they seem to think that a shrinking population would be the panacea policy. Maybe you could write a quick article for Bet On It about the dangers of a population shrinkage?
It's worse than you think. According to the NYT comments, rising house prices are due to immigration, greedy developers, monopoly and the real estate lobby, and anyway, Not In My Back Yard noway nohow.
I know you talk about building your own bubble before, but reading the comments by the readers in NYT sections is a little discouraging, because people outside the bubble believe SO differently and knowingly argue against BBB/YIMBY position with irrational points.
While it’s embedded throughout the article, I’d love to see you explicitly state the moral reason(s) people should support YIMBY, or at least why NIMBY is an immoral position, when you write to people outside the bubble. Maybe YIMBY needs to be a “luxury belief” (Rob Henderson) - “I can afford to sacrifice my net worth that’s heavily tied to my property value in order for upper-middle class families to live near me.”
This paragraph was doubled:
> Even sympathizers often believe that housing deregulation will never happen. They blame self-interested voting, arguing that because most Americans own homes, they will stonewall any policy to make homes cheaper.
Very true and applies to most countries. Homeowners identities are wedded to the value of their homes and wish for ever increasing prices. Partly because it erodes their debts (when there’s a mortgage outstanding) and creates a store of value for retirement. Falling prices would be most home owners worst nightmare. To turn homeowners from NIMBY to YIMBY perhaps tax systems need to change. I’m a homeowner and for the sake of the younger generations and social cohesion I’d be willing to go YIMBY (deregulate and build, build, build).
There are whole lot of behavioral factors like this, such as wage stickiness. It is one of the reasons why low, consistent inflation is good. It allows for price decreases in real-terms with requiring them in nominal terms.
So one approach is to figure out how to just keep prices nominally stable while increasing supply, that could prevent significant blowback. Note though, two cities with some of the highest rates of development in the past few years (Austin and Raleigh) also have continued to see price increases because the demand still outstrips supply. YIMBYism, when applied to these areas is just preventing _even higher_ costs. But that also gives us more room to maneuver with regulation
Even with massive deregulation, it would take the highest priced places, like SF, 75 years to reach a free market equilibrium. A 50% or even 75% drop in real prices combined with 75 years of 2% nominal price increases will prevent prices from going down.
What I have been seeing is a growing trend in urban areas to tie housing construction to social justice policies - putting governmental bureaucracies increasingly involved in who can live where, what prices people should pay for housing, and where construction would be approved. When cities demand that X % of any new construction must be a set-aside for low income housing they effectively are “taking” private property for some notion of public good.