Can we get to YIMBY?
How NIMBYism harms housing production
In response to our current housing crisis, our November 2nd post, Reforming Land Use Regulations and Housing Production focused on possible regulatory solutions for spurring housing production, as an increased supply of housing is what is needed to drive affordability for renters and homeowners alike.
Last week, Tom Barkin, president of Federal Reserve Bank of Richmond affirmed the need for supply increases and offered the following about the crisis, “We need to make the math work better, both for homeownership and renting. But how?” he asked. “Well, subsidizing current prices at a wide scale will only increase demand further, worsening the imbalance with supply. Suppressing demand isn’t an attractive option either. So, that leaves us with the need to increase housing supply. Everyone is struggling with this issue, but we can learn from each other.”
With more than seventy-five percent (75%) of all U.S. zoned land, zoned as single family residential, options for housing production are limited. Single-family zoning is land use policy that restricts development to single-family homes only, making other housing options like apartments, condos, or accessory dwelling units illegal without rezoning. Often these policies include minimum lot sizes and reduced density as we saw in the Rockford ordinance I discussed on November 2nd. These regulations add costs as was established in that same post and in multiple national research articles and papers. Some communities are addressing their land use regulations to spur other housing development. Others are not and continue to see little to no housing production and continued home and rent price increases. This is the case in Rockford, Il.
Barkin further noted NIMBYism (Not in My Back Yard) is a huge affordable housing problem, “While the need for more housing may be obvious to us, it often isn’t to those who don’t want their town to change, or who don’t like the specific change being proposed.” Over decades, working as a developer, I have seen homeowners and renters alike show up to dispute the development of roadways, big box retailers, grocery stores, condos, apartments, and even other single-family homes.
Are NIMBYs the reason we cannot address costly land use regulations that have been reported to account for nearly 40% of multi-family costs? Given the slow response in addressing land use regulations by many municipalities, I can’t help but wonder.
Atlantic author Jerusalem Demsas, reported (April 22, 2022) in Community Input Is Bad, Actually several accounts of community members squelching developments. She wrote, “To put a fine point on it: Deference to community input is a big part of why the U.S. is suffering from a nearly 3.8-million-home shortage and has failed to build sufficient mass transit, and why renewable energy is lacking in even the most progressive states.” The article goes on to offer accounts where citizen interventions stalled or killed home development. She included a X (formerly Twitter) posting of Michael Kaess that when I went to his X page to find it, I found multiple community meetings where Bronx (NY) residents spoke out against housing developments, including this October 4, 2022 Community Board Hearing post.
https://x.com/WaluigiSoap/status/1577339356292980737?s=20
Here at home, in Rockford, IL we’ve had similar examples of NIMBY actions aimed at killing developments – especially affordable housing developments. In Ruckus in Rockford, Tax Credit Advisor (November 2016) wrote about a housing development on South New Towne Drive that drew national attention for its NIMBY response. Transparently, I was involved in the development of that affordable housing apartment complex, serving as the Rockford Housing Authority CEO at the time. While this was 7 years ago, there remains significant opposition in our community when it comes to housing related matters and no new real new construction has been built since.
Jerusalem goes on to say, “The community-input process is disastrous for two broad reasons. First, community input is not representative of the local population. Second, the perception of who counts as part of an affected local community tends to include everyone who feels the negative costs of development but only a fragment of the beneficiaries.” She adds, “Instead of empowering communities that most suffered under urban renewal, the local-review process has again privileged wealthier people who routinely block new projects, and many of the projects that do get built are in poorer areas.” The article also notes that these wealthier activists are also mostly white.
History shows many NIMBY folks rise in opposition to anything being built that could lower their own property values – as they perceive it. There is generally strong belief by NIMBYs that anything, but other single-family homes will lower their property value and threaten their investment in their home or investment properties. Reviews of the adjacent properties to the Rockford New Towne development since construction of the apartment property show that values have increased consistent with other residential real estate in the city. Additionally, there is significant research to show that affordable housing in a neighborhood, that is well built and well managed, increases the value of neighboring properties.
The underlying driver for NIMBYs is really fear. Fear of change and fear of loss. And while I don’t fully believe the NIMBY movement is behind our failure to address land use regulations, my experience shows it is also fear that prevents us from making bold and innovative changes to land use policies that could ignite the production of new homes and multi-family units.
In an August 9, 2023 FORTUNE Magazine article, Minneapolis has a YIMBY message for America: Build more houses and get rid of suburban-style zoning and inflation will disappear, the message is loud and clear – change land use regulations!
In 2019, Bloomberg’s Businessweek Feature covered the bold move by Minneapolis, Minnesota leaders who practically eliminated single family zoning, increased density, and work to address racial equity. The result? Minneapolis became the first major metropolitan area this year to see annual inflation fall below the Federal Reserve’s target of 2%. They came in at 1.8%.
Besides eliminating single family zoning, leaders invested $320 million for rental assistance and housing subsidies since 2018. These investments spurred significant production of apartments and condos, as well as those missing middle products I spoke about in Labor and Housing on November 11,2023.
The same Bloomberg article notes, “The Minneapolis region got authorization to build about 14,600 multifamily buildings last year, ranking 11th out of 51 peer metro areas in permits per capita in that category in 2022, according to Bloomberg calculations using Census Bureau data.” Imagine what thousands of new housing units could do for any community – especially one like Rockford, IL.
Over the coming months, will leaders in communities with stagnant housing production rise and address land use regulations and other deterrents to housing production or, will the fall victim to the fear of change and align with NIMBY fears? Or will they rise and lead us through a new era of YIMBYism – Yes in My Back Yard and drive a housing renaissance that can squelch inflation, provide jobs, and create new affordable housing options that take the pressure off burdened renters and homeowners? Time will tell.
If you believe in the need for affordable housing across all housing segments and types, then I encourage you to reach to your elected officials and say now is the time to be bold, and simply more like Minneapolis!