There is a lot of chatter about the perils of NIMBYism
floating around these days, largely due to Ryan Avent’s recent ebook, The Gated City, and related pieces in
the NY Times and The Atlantic Cities.
Avent’s arguments are that density is good for economic health and
productivity, and the reason there isn’t more dense residential development is,
in large part, due to NIMBYism (Not In My Back Yard) that prevents new
construction. I’m sympathetic to Avent’s arguments, but I’m not sold on his
diagnoses. The economic literature Avent relies on for his 'density leads
to productivity' arguments measures employment or firm density, not residential.
You can have a dense commercial center without dense residential development,
and this is an important point because it challenges the NIMBYism premise.
If NIMBYism is preventing dense development, we should see
evidence (not just anecdotes in the local papers) that developers are bringing
plans to the city and getting struck down by the local community. Local regulations prevent dense residential
development, but NIMBYism is not the same as zoning restrictions. Certainly
communities block drug treatment centers, wind farms and other types of uses
all the time, but there is not really much evidence that NIMBYs block residential
development based on density. So what do we know about NIMBYism and local regulations, and are
they preventing productivity gains by limiting development?
Other than economists, two groups of scholars have explored
the role of NIMBYs and zoning in preventing development, which are legal
scholars and urban planners. One of the
better known and well regarded legal scholars is William Fischel, who in his
2007 book The Homevoter Hypothesis
argued that NIMBYism can work itself into long range planning efforts and
excessive local zoning, and these types of effects start to occur when about
two-thirds of the households are homeowners. Fischel also points out that
renters are rarely NIMBYs as they are not overly concerned with maintaining
their investment because they can simply move if they don’t like the direction
of the neighborhood. Homeowners, by
contrast, worry about outcomes that may potentially reduce the value of their
properties, and these property owners tend to overestimate the likelihood of
lousy outcomes. In this sense they are acting rationally to protect their real
estate, and Fischel argues that the way to resolve this is to guarantee a
minimum value to insure against any losses. (He wrote the book before the
housing market crashed, which was a time pretty much everyone thought home
prices only go up.) Fischel also argues that NIMBYism is equally against
commercial and residential construction, and his examples largely use
opposition to detatched single family homes rather than large apartment
buildings.
In the scenarios described by Fischel NIMBYism is a problem
but can be solved through compensation to those expecting harm. Avent, in the Gated City, argues that the potential
developers should be compensated by those who want to block development.
Avent’s solution is unworkable, but Fischel’s turns out to be closer to how
NIMBYism actually works. In a 2001 paper in Urban Studies, Anthony Matejczyk
looks at how NIMBYism plays out in Saint Paul, Minnesota. What he finds is that
developers and communities tend to cooperate and compromise far more often than
abandon the projects due to opposition. This changes the projects, and maybe
reduces the size of projects, but hardly prevents any new, dense development.
Jonathan Levine is one of the few scholars who have looked
at developer preferences. In his book Zoned
Out he uses data from Boston and Atlanta to model how the zoning code
limits development. He finds that the zoning code is more restrictive than
developers prefer in central cities and close-in suburbs. More distant suburbs
have zoning that more closely matches developer interests.
So it is really the zoning code and local land use
regulations that restrict development more than an active NIMBY opposition. The
origins of local officials supporting restrictive zoning are important, and
under considered by Avent’s (and others’) critiques. Let’s look at Palo Alto,
which Avent uses as a poster for the harmful effects from NIMBYism and an example of potential lost productivity.
In the 1960s Palo Alto was growing like crazy, as was the Bay Area, and the
number of housing units grew by 21 percent during the decade, and most of that
growth was between 1965 and 1970 in multi-family units. In 1970 Palo Alto
commissioned a report on how to develop the 7,500 acres it acquired ten years
earlier that sat in the foothills. It was expected that this land would be
developed with residential uses, and probably in low-density detached homes.
Then three things happened. First, the Ramapo
decision occurred, broadening the rights of cities to restrict development. Second,
the Palo Alto report came back (years later) with a “no build” option that was
economically favorable. Prior to this report development was always assumed,
and now “no build” is standard operating procedure. Third, Proposition 13 came
around and reduced the ability of local government to raise money through the
property tax. (Another related phenomenon was that during this period of time
the wounds of urban renewal and heavy fisted, failed development were still
fresh. People legitimately and rightly wanted to prevent that kind of
development from happening again and viewed real estate developers as the
problem.)
These three occurrences provide ample fodder for restricting
development. Cities do not actually want too much residential development
because residents are expensive. Kids want to go to school, families expect 24-hour
police protection, and so on. In addition, restrictions on property taxes make
sales and other local option taxes more important. Palo Alto was doing great
with commercial development associated with Stanford, and any new residents
would reduce their financial health and increase obligations. It should be
noted that Palo Alto has been restricting development for decades now and has
done quite well economically. In any event, broad new powers to restrict
growth, preservation of open space, limiting the number of expensive residents
and promoting commercial uses all add up to less growth than some may hope, but
these are all perfectly rational bureaucratic decisions that, at least in my opinion,
do not amount to NIMBYism. Like Fischel, I expect that opposition can be bought
off, and this happens all the time through exactions, direct payments to the
community, and other compromises. The real menace is regulations and decades
old incentive structures that distort the zoning choices public officials make.
And where NIMBYism is problematic, the effects are often quite local as dense
development can occur elsewhere in the city or region. If NIMBYism was a
leading deterrent to desirable development we would see some cities within a
region embrace development and capture the benefits. Yet we don’t see that. We
see similar growth restrictions through metro areas, and I agree that these are less than optimal. NIMBYism is a problem, but
not likely a leading obstacle to development according to the published
research.
No comments:
Post a Comment