
How Anti-Growth Sentiment, Reflected in Zoning Laws, Thwarts Equality - Cadsby
http://www.nytimes.com/2016/07/04/business/how-anti-growth-sentiment-reflected-in-zoning-laws-thwarts-equality.html?_r=0
======
OedipusRex
It's not so much that urban development kills "character", it's that current
urban development methods are ugly. They have no class to them. The "not in my
backyard" argument will always be brought about by people who's previously
beautiful surroundings are replaced by brick rectangles with evenly spaced
windows. The trick is to make urban areas attractive but not gentrified.

~~~
ars
In Europe people go to the park to have solitude with nature and go home to
interact with people [on the street by the house].

In the US people go to the park to interact with people, and go home to have
solitude [hopefully with nature in their backyard, but even if not they want a
quiet apartment without lots of people near them, or at least the illusion of
it].

Some people prefer the US way, some the European way. But you have to build
the city to match what people want.

The ugly urban cities are a result of a mismatch.

~~~
wallflower
The European way, in many ways, was a consequence of geography and, to a
lesser degree, climate.

The US is a car-centric culture that is fueled by (relatively) cheap gasoline
(energy prices).

Take for instance shopping malls. Shopping malls in Asia (usually in urban
centers) build up vertically while in the United States they are build out
horizontally with acres and acres of parking spaces.

Some of the best US cities have European-like features (NYC with Central Park
and its other parks like Union Square, Tompkins Square, traffic shut down on
some streets or at least seating that takes up part of the street).

~~~
ars
> Some of the best US cities have European-like features

Careful with calling it "best". Not everyone likes that kind of thing in a
city.

I don't. I hate those types of cities, I feel very stressed and oppressed
("squished" if you get what I mean) when I go to cities designed in that way.
I can handle it for a visit, but I would never want to live there.

Different people like different things, that's why we have a variety of cities
in the US, you can live in a place that matches what you like. But don't call
it "best" just because it happens to be what you like.

~~~
TheCoelacanth
The problem is we don't allow a variety of cities anymore. We have effectively
outlawed the denser European-style cities. The only ones that exist are those
that are old enough to be grandfathered in.

------
MichaelBurge
They should just repeal zoning laws entirely. Maybe make an exception for
polluting heavy industry, or for people using government money or government-
backed loans. It should probably even be a constitutional amendment.

People who want quiet suburbs can pool together a corporation to own a planned
community. That limits the scope of their NIMBYism to just their community,
and as shareholders they could vote on whether to get paid for selling their
land to Walmart or Google or the people wanting to set up high-density
apartment complexes. Plus they have an even stronger voice in their immediate
community, so they can do things like build walls to keep the homeless out. I
think getting bought out as a shareholder would warm them to the idea; if
Walmart buys the land next door you just want to complain, but if you're
getting some of the money you might be in favor.

The government should only have the power to prescribe structural integrity
rules, fire safety codes, building codes for number of exits, etc.

~~~
mtviewdave
The "corporation" you've described _is_ a government. Literally.

A government (in the United States) is just a mechanism for an area's resident
citizenry to express their collective will. Whether you call it "government"
with "citizens", or a "corporation" with "shareholders", it's the same thing.

~~~
MichaelBurge
They fill similar conceptual roles, but the details are different.

~~~
paulddraper
...and those details are?

------
p4wnc6
I feel that in many of these discussions, it's beneficial to see NIMBYism as a
response to an incomplete insurance market, as described in [0].

This is not to say it is a complete or normative defense of NIMBYism, but
rather that a lot of knee-jerk SJW sort of reaction is missing the point and
failing to address, or even really attempt to understand, where NIMBYs are
coming from.

Part of me wonders if this could be solved by tech, particularly insurance
products that offer homeowners protection against the variety of ways that
seemingly-great expansion projects can go wrong. I'd enjoy working on that
sort of problem, except that so much of the current interest in this entire
topic is political, and politicians have some incentive to maintain zoning-
like systems because it offers them (the politicians) great opportunities for
rent seeking, by being the gatekeepers of an approval process that should
instead be more straightforward and just hedged by homeowners in the form of
custom insurance products.

[0] "Why are there NIMBYs?" William Fischel, <
[https://www.dartmouth.edu/~wfischel/Papers/00-04.PDF](https://www.dartmouth.edu/~wfischel/Papers/00-04.PDF)
>

~~~
AnthonyMouse
The problem is, it isn't an insurable problem if housing prices decrease when
the new construction goes _right_. You would just put the insurance company on
the opposing side of the development instead of the homeowners.

The source of the problem is that people started buying homes as investments,
overpaying for them because there was insufficient supply, and now that
they've got a mortgage and they don't want to end up underwater, so they have
to make sure everybody else overpays too.

Probably the solution is inflation. Build more housing and at the same time
print more money. Then real housing prices go down while nominal housing
prices stay the same, so your house doesn't "lose value" compared to your
mortgage but housing still becomes more affordable for new buyers. This would
also help by devaluing everyone's student loans and other debt. Call it the
banks' punishment for 2008.

~~~
benlangmuir
Why do you think nominal housing prices will not increase with the new money?
I can understand why housing prices would be sticky when going down, but I've
never heard that they are sticky when going up.

~~~
AnthonyMouse
Increasing the housing supply would tend to cause nominal housing prices to
decrease. Increasing the money supply would tend to cause nominal housing
prices to increase. Do them both at the same time and they cancel.

~~~
benlangmuir
Ah, reading comprehension failure on my part. Wouldn't the effects of the
inflation be out of proportion with the housing supply increase, though?
Printing money will affect many prices, but the housing supply only affects
the local housing market.

~~~
AnthonyMouse
Sure, the nominal prices of everything else would increase, as would wages so
that purchasing power would remain largely unchanged. Moderate inflation is
basically harmless -- in a lot of ways it's beneficial. It's effectively a tax
on money (especially on lenders), which makes it extremely progressive. (That
is one of the reasons _de_ flation is so catastrophic. The other is that
deflation makes cash an investment, so people would hoard cash instead of
investing in actually productive activities.)

And the government can use the new money in place of normal tax revenue, which
helps the economy.

It's possible to go too far and have hyperinflation. It becomes problematic if
prices double every day and nobody will accept your money because it will have
lost half its value by the time they get to the bank, as is often the case in
failing or mismanaged countries. But if we had e.g. ten percent inflation per
year for several years, the effects would be a rather large net positive. It's
basically a wealth transfer from lenders to borrowers, where "borrowers" means
the taxpayer (national debt), people with student loans or car loans or credit
card debt, etc. And homeowners with mortgages, canceling the reduction in
housing prices that would otherwise come from significantly increasing the
housing stock.

------
davidf18
I live in Manhattan with its very high housing costs.

As Harvard Economist Edward Glaeser, Economics Nobelist Paul Krugmann,
Financial Times columnist and an economist Tim Harford have been saying, the
issues are politically induced housing scarcity through the use of zoning
density restrictions and also overuse of historic landmark status. The use of
politics to create artificial scarcity to create market inefficiencies is
called "rent-seeking" in Microeconomics.

Another example was the NYC limit of 13,000 Taxi medallions which lead to a
market value for medallions of $1.2 million. Then Uber/Lyft came along to
disrupt the market and provide more transportation in NYC and the value of the
medallions dropped to less than $700 K.

I believe that Congress is looking into the zoning form of "rent-seeking" with
the understanding that zoning is not necessarily local but might be federal to
override this inherent unfairness where older people housing expensive and
scare for younger people.

For more info: Edward Glaeser: Build Big Bill (Mayor of NYC)
[http://www.nydailynews.com/opinion/build-big-bill-
article-1....](http://www.nydailynews.com/opinion/build-big-bill-
article-1.1913739)

Tim Harford: The Undercover Economist. [https://www.amazon.com/Undercover-
Economist-Revised-Updated-...](https://www.amazon.com/Undercover-Economist-
Revised-Updated-Exposing/dp/0199926514)

Creating these politically induced market inefficiencies are what create an
inherent transfer of wealth from the poor to the wealthy and from the young to
the old and of course is a major contributor to financial inequality.

------
Dowwie
In a realistic scenario, de-regulated zoning around San Francisco would
benefit developers and lenders while worsening the financial burden of the
middle class.

If zoning were de-regulated around San Francisco, I doubt that many of you
would pay much less than what you'd pay now for housing, assuming you're not
making less than the AMI.

San Francisco had an Area Median Income in 2014 of $83,222. Those who make
below this qualify for affordable housing. If you want to imagine what kind of
housing policy the bay area would implement, look to what the DelBlasio
administration is doing [1]. In 2015, the AMI for a family of four in New York
City was $86,300. According to the DelBlasio administration's plan, "there
will be affordable housing available for each level of income from “Extremely
Low Income” to “Middle Income.” The middle group, “Low Income” will benefit
the most, receiving nearly 60 percent of the 200,000 projected units. Each of
the other levels of income will receive eight to 12 percent of the units."

So, given that you wouldn't qualify for affordable housing, you'll end up
buying new property at market-driven prices. If developers were to flood the
market with thousands of additional units, how would that affect prices? If
you were a developer, wouldn't you try to maximize profit for your investors?
With that given, developers would collude. They'd roll out new, optimally
priced units over time. They'll make excuses to policymakers as to why
projects are delayed.

Today, the middle class can't even get a chance to buy something that it can't
afford. With de-regulated housing, the former constraint is lifted and new
homeowners will be heavily debt-burdened with super-jumbo non-conforming
mortgages. However, you'll have somewhere to live.

[1] [http://www.amny.com/real-estate/affordable-housing-in-new-
yo...](http://www.amny.com/real-estate/affordable-housing-in-new-york-city-
mayor-bill-de-blasio-s-plan-explained-1.11761817)

~~~
AnthonyMouse
> If you were a developer, wouldn't you try to maximize profit for your
> investors?

Selling 1000 units at $2000 is more profitable than selling 500 units at
$2500. Moreover, collusion is a) illegal, allowing us to smite them with the
Hammer of Antitrust Enforcement, and b) assumes there are few enough
developers that they can actually do that without anybody defecting, which
seems unlikely.

> In a realistic scenario, de-regulated zoning around San Francisco would
> benefit developers and lenders while worsening the financial burden of the
> middle class.

Your proposed alternative to increasing supply once to reduce prices is to
keep supply constrained and subsidize rents forever.

There is no way out of the fact that increasing the housing supply is the only
real solution, and that requires zoning regulations to be relaxed so that it
can actually be increased. If you then have other problems with increasing the
housing supply, you fix them, because one way or another there needs to be a
lot more housing.

~~~
makomk
Selling 1000 units at $2000 is only more profitable than selling 500 units at
$2500 if those units cost nothing to build. That's very far from being the
case.

------
mc32
These things are not so simple. Even in that places where they build baby,
build! There is inequality. Brazil, China, etc. Brazil is diverse, China is
pretty homogenous, both have large inequalities. It's not a one dimensional
problem.

~~~
dietrichepp
That's a rather poor mischaracterization of the argument. Of course it's not a
one dimensional problem, everyone knows that equality is a complicated
problem.

------
HillaryBriss
> The lost opportunities for development may theoretically reduce the output
> of the United States economy by as much as $1.5 trillion a year

We should also do away with National Parks and Forests, which are nothing more
than zoning laws at the Federal level.

For that matter, state and local parks get in the way too.

How much lost economic output are restrictions on real estate development in
Golden Gate Park costing the city of San Francisco?

How many more people could be housed there if the city simply got out of the
way and let the developers build twenty or thirty thousand new units in there?

Why does Federal law even allow a local community like San Francisco so much
control over its land?

~~~
stale2002
You are thinking about things in exactly the wrong way.

For every 1 story increase in building height in a San Francisco apartment
complex, there is 10 less houses that have to be build in Suburbia.

10 parcels of land that can now be converted to national parks, and public
spaces.

People need a place to live whether you like it or not.

We can either make room for them in the cities, by increasing density and
building height limits, or we can stand by and watch as urban sprawl continues
to destroy our environment.

~~~
spacecowboy_lon
But not everyone wants to live in an apartment/flat there are serious
downsides to lease hold property's.

A co worker was on the residents committee for a block of flats (london UK)
that had to have the roof replaced not cheap and the original contrcator did
it wrong and they had to sue them and have it redone.

~~~
pas
Yes, and?

But living in your own house means you have your own roof, that can just as
well needs maintenance, and you also can pick a bad contractor, and so on.

There are trade-offs. And there are external costs. Having your own backyard
means usually having and using a car, taking up space close to downtown
(because fuck commute times, right?) for just a family (and taking up road
capacity too). These are currently undervalued.

The whole housing calamity in the Bay Area (and in London and Berlin) is
manifestation of exactly this. (Plus idiotic zoning laws and height
restrictions, and of course grafts, bribes, corruption, and the usual.)

~~~
spacecowboy_lon
Its the difference between a £250,000k Job and a £10k one ogh and coordinating
50-70 different lease holder to pay their share.

Even more extream if your looking at a listed building - which I did when I
was looking at buying a ex alms house listed in Pevsner (one of only two
buildings of note in my home town)

~~~
pas
In my experience the paying the lease (or whatever the money due is formally
called) is the least controversial part of it. You'll have more problems with
the owners of the apartments. (So all the problems of the dreaded HOAs, exist
for every building if it's owned by a group - which is quite usual in Europe.)

But these are very low-level problems, and they tend to sort themselves out
pretty quickly (in ~5 years, let's say, if the building needs a renovation and
the owners were not too keen on participating and saving for it beforehand).

~~~
spacecowboy_lon
Try getting a mortgage on a property with a short lease <60 Years it can be
hard and expensive to extend the lease to make it practicabel.

~~~
pas
If you are getting a mortgage, you usually buy it.

Also, if you want to get a mortgage for a lease, you can, if the mortgage
repayment deadline is before the lease expiry. When it comes to property banks
only care about getting a notarized mortgage contract and getting on the
property's land registry sheet in a first position. (And this latter part is
interesting, because most land registries - as far as I know - don't really
have the concept of expiring records - so you can't record the fact of your
lease.)

------
1024core
The only viable solution, keeping both sides happy, is to have a kickass
public transportation system.

I live in SF. Some of the working class people I meet live as far away as
Richmond, Vallejo and Gilroy. They spend hours commuting back and forth; but
they have no choice. It kills the 'quality of life', but what can one do?

If, for example, it was possible to get from Richmond to SF in 15 minutes at
any time of day or night, it would make a world of difference. The pressure to
live in SF would be eased, knowing that any time you wanted to enjoy the city
life, it was a quick 15 minute ride away.

Communities hate more development, because people don't want to disturb their
little paradise, which they worked so hard to create. And these days, it is
much easier for people to move; heck, many people live nomadic lives, spending
months here, and months there.

Something else to think about: an influx of residents has second-order
effects: more schools, more police, more fire, etc. etc. Who'll pay for that?
The taxes will flow over decades, but these things need to be built right
away!

~~~
natrius
Shipping people in from economically segregated exurbs is not a solution to a
segregation problem. We could just repeal the laws that are hurting families
with less wealth. The controversy on this issue should be a huge red flag:
we've allowed the power of our governments to be wielded on behalf of the
wealthy at the expense of everyone else, and our political culture finds that
acceptable. Fix the culture. Repeal the segregation laws.

~~~
1024core
> Shipping people in from economically segregated exurbs is not a solution to
> a segregation problem.

That is not the idea. The idea is to let people live where they want to live,
without the weight of the commute hanging over them. And even if someone
chooses to live far away, they should still be able to maintain a decent
quality of life.

There is no denying that dwellings closer to the city centers are in higher
demand, and hence cost more. I posit that it is primarily due to a mediocre
transportation system. If the Bay Area had a world-class high-speed system,
the demand would be reduced, lowering the prices and benefiting everyone.

~~~
natrius
I'm with you: let's build better transportation infrastructure. But we can't
keep using our laws to segregate by income. Some income segregation is
inevitable, but we shouldn't encourage it by making the good life scarce. More
homes is good for everyone.

------
wdr1
This article has gotten a fair bit of attention here in Santa Monica. We have
the highest rents in LA, possibly one of the strongest anti-development
communities, and aggressive rent control.

This fall there will be an initiative on the ballot called "L.U.V.E." which
will require any development over two stories to get voter approval. It's
actually split the anti-development activists apart, as some of them think it
goes too far.

It's a beautiful city, but part of me feels like it's a ticking time bomb due
to lack of education in society. Much like there was broad rejection of
vaccinations here, there's rejection of the concept of supply & demand (some
calling it a "Republican conspiracy.")

------
tim333
There must be massive opportunities to manage these things in a smarter way as
illustrated by the $1.5 trillion a year mentioned in the article. For example
in SF they could build aesthetically appealing tall buildings with much of the
profits going to the government rather than private developers and use some of
that to build better accom for the homeless who clutter the streets. Everyone
wins pretty much - you could give a bit of compensation to people next to the
new buildings who might be a bit inconvenienced.

Maybe someone could do a startup to sort this stuff. I've been thinking about
it but not cracked it.

------
sandworm101
I don't think liberal zoning is the problem. I've seen my city go through
massive changes in the last 30 years, top of the list being a radical
increase, a liberalization, of zoning. They are allowing more and bigger
developments. Multi-story and multi-unit developments are everywhere, but that
isn't making housing any more affordable.

A piece of land with a liberal zoning is worth more. It is a target for
redevelopment in order to max out the zoning. The net result in my local is
the steady replacement of anything old (ie 10+ years) by newer ridiculously
large replacements. Apartments and other attached units are now so expensive,
and prices rising so steadily, that the logical thing to do is let them sit
empty. The pittance one might claw back in rent pales in comparison to rising
prices, and who needs pesky tenants anyway.

So... liberal zoning --> rising land values/prices --> redevelopment is better
than renting --> fewer rental units = higher rent. It's true up and down the
west coast. Now if a government told owners that no, they are not going to rip
down that apartment block to replace it with luxury living, all-one-level,
condos (ie for old/rich retirees) then perhaps prices might stabilize, sending
more units into the rental market and so also stabilizing rents.

~~~
rspeer
> Apartments and other attached units are now so expensive, and prices rising
> so steadily, that the logical thing to do is let them sit empty.

I highly doubt this is going on over any long period of time. If there's a
bubble like this, it'll pop.

Why do you think these new apartments are luxury apartments? It's because
living in your city is a luxury that people with enough money are paying for.
If they didn't exist, people would be paying even more for living spaces that
_do_ exist. So, build new apartments and prices go up. But don't build new
apartments, and prices go up _more_.

The most reliable way to get affordable housing (besides a lottery or waiting
list, which doesn't solve the problem) is to have built new housing 30 years
ago.

~~~
sandworm101
Luxury has some scientific definitions. Top of the list is size for a single-
family dwelling. My city has liberalized zoning for size, but kept limits on
number of occupants and such for fear of impacting infrastructure. The result
is ever-larger units. New houses seem less like houses and more like diagrams
of local building codes. Property line minus ten feet, there's your wall.

Luxury apartments can also be defined during zoning as units that the city
assumes will rarely be occupied. It is often easier to get a permit if you can
claim that the people in your development aren't going to contribute to
traffic problems. I've even seen the pre-selling to overseas investors trotted
out as justification for not upgrading traffic connections to a development.
So-called "elder living" units also fit this scheme.

As for rents, the standard has always been that yearly rent should be around
1/20th of the unit's value, the "20-year" rule. But with property prices
rising so quickly, some units are renting out at 1/50th their value. Once you
get into those areas, rent becomes irrelevant and you run into the paradox
that many units (houses and condos) are worth significantly more without
tenants. You don;t want to bother asking tenants to clear out so you can show
the unit. So investors planning to flip something in the next couple years
don't bother with rent. Only when they think that they may have to hold on for
a while do they consider.

~~~
rspeer
If the problem is that overseas investors are buying the houses, sure, that's
a problem that decreases the amount of living space. But how would restrictive
zoning fix that problem?

And I still don't think the flipping is relevant in the long run. It's pent-up
demand sorting itself out. They can't keep flipping forever.

~~~
TulliusCicero
> But how would restrictive zoning fix that problem?

Not only does restrictive zoning not fix the problem, it only makes it worse.
Part of why you have investors buying properties in places like SF is that
housing is such a hot commodity due to the restricted supply. If it was easy
to make lots more apartments and condos there, it would be less attractive as
an investment, which would mean less speculation.

------
michaelbuddy
Does anyone really think that once they own property in a certain area that
they are gonna believe in the 'anything goes' mentality? 'Growth' is
subjective. "Hey look at all the great businesses in my neighborhood bringing
in taxes! I mean sure they are all pot pharmacies and bars that my kid gets to
pass on his way to elementary school but you know GROWTH!"

~~~
toomuchtodo
I think the issue is, everyone believes they should be able to become a
stakeholder in a resource that is, by definition, naturally constrained. Only
so many people get a say in a geographic area, and the stark reality is that
once you reach a certain critical mass, you're incentivized to protect your
quality of life over allowing for more people to join you.

Strangely, its thought of as acceptable for tech workers (with their new found
purchasing power due to disparate wages compared to traditional workers) to
displace long-time residents of a community, but those same tech workers are
aghast when communities would prefer they not come.

“We don’t need one more job in Boulder,” Mr. Pomerance said. “We don’t need to
grow anymore. Go somewhere else where they need you.”

Indeed. It seems I'm a bit late to coin the term "tech privilege".

~~~
morgante
What's strange about this at all? The pro-growth mentality is consistent:
anyone can come, if they can afford it.

The anti-growth mentality is incoherent: it was fine for me to move here 20
years ago, but how dare tech workers try to do the same thing!

~~~
duncan_bayne
Bryson made the same point about anti-immigration forces in the USA (and the
same applies elsewhere, like Australia where I live).

"Immigration was just fine for my grandparents, but now it's about time it
stopped."

~~~
AnthonyMouse
> "Immigration was just fine for my grandparents, but now it's about time it
> stopped."

That's a mischaracterization though. The fundamental equation for immigration
is to make sure the immigrants don't bring down the average. When your
grandparents came here the average was lower than it is now.

Which is why it's a lot easier to get a green card if you have a masters in
engineering than if you're a farm hand. It fundamentally has to be that way if
you want to have any sort of a social safety net, otherwise the majority of
world population would take citizenship and become eligible for social
assistance.

~~~
duncan_bayne
> It fundamentally has to be that way if you want to have any sort of a social
> safety net, otherwise the majority of world population would take
> citizenship and become eligible for social assistance.

I agree entirely, which is why the (if there is a 'the') Libertarian position
on the matter is a combination of open immigration and private charity instead
of socialism.

[http://pc.blogspot.com.au/2016/06/immigration-is-
fundamental...](http://pc.blogspot.com.au/2016/06/immigration-is-fundamental-
human-right.html)

