
Study: Renters in high-rent cities are as NIMBY as homeowners - tysonzni
https://www.cambridge.org/core/journals/american-political-science-review/article/when-do-renters-behave-like-homeowners-high-rent-price-anxiety-and-nimbyism/72B5F7B4CFEC099E9EC4A7A1EAD8611D
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sxates
I live in Oakland and am a member of a few groups that give me a look outside
my usual wealthy tech bubble to the sentiments of the lower income folks here.
There is HUGE resistance to new development in Oakland among the very people
who are being priced out. But unlike property owners who tend to resist new
development because they worry about supply pushing prices down, many of these
people seem to see an opposite correlation: that new development means higher
rents, which displace them and their communities.

I think this is simply a misunderstanding of how development works. They see
rents going up, and new buildings going up, and assume that the new buildings
are the cause of the increase, not a response to the increase. They think we
need to build more below-market rate units, because the luxury ones raise
average rental prices.

But really, the shortages which create high prices are what create the
business case for building expensive luxury condos. If rents weren't already
high, these buildings wouldn't be built. If the demand is there but not the
supply, everyone at the wealthy end of the spectrum will take all of the
supply, leaving the poorer ends out of a home. So the more market rate units
we have, the more lower end units that are available. Seems simple to me, but
a lot of people seem to get this wrong.

They have this idea that there are a bunch of wealthy and greedy developers
out to get them and their precious neighborhoods. The buildings these
developers start have a shockingly high rate of spontaneous combustion in
Oakland, right when framing is complete.

I wonder if the property owner interests only encourage these mis-perceptions
since they serve their interests.

~~~
Spooky23
The crowd tends to speak the truth.

People aren’t dumb. The type of construction common today isn’t in the
interest of people who own single or <4 unit property or people who rent.

Developers are absolutely greedy and generally have no interest in the impacts
surrounding their work. For most, their job is to gather capital, do a deal
and gtfo.

~~~
cycrutchfield
Building high-density housing is certainly in the interest of people who rent,
since more rental supply equals lower prices for rent.

But you're right that it isn't in the interest of people who own a property.
Congratulations, you've identified the cause of NIMBYism!

~~~
Spooky23
It does not. Only one thing leads to lower rent in these cities -- real estate
busts.

There are probably two dozen residential or mixed use skyscrapers alone being
erected in Manhattan. The annual rents of 80%+ of these units probably exceed
the median household income in Manhattan, unless they are directly subsidized.

The rents will come down when rates go up and overleveraged developers go
bankrupt.

~~~
cycrutchfield
I don’t think you completely understand supply and demand. If Mercedes makes
more cars, that does not raise the price of a Toyota.

~~~
Spooky23
Unlike cars, there is a finite supply of real property, most of which is
enjoyed by its owners for whatever purpose they choose.

To borrow your car analogy, there will never be a "Toyota" housing unit built
in Atherton, CA or a few blocks from Rockeffler Center in NYC.

The current issues have more to do with a glut of cash than a shortage of
housing.

~~~
cycrutchfield
>Unlike cars, there is a finite supply of real property, most of which is
enjoyed by its owners for whatever purpose they choose.

In what world do you live in where the number of housing units in a city is
bounded by some value? A cursory examination of any city's housing stock data
would tell you otherwise.

>To borrow your car analogy, there will never be a "Toyota" housing unit built
in Atherton, CA or a few blocks from Rockeffler Center in NYC.

This is like saying that when you go to the Mercedes dealership all you see is
expensive cars, therefore there only exists expensive cars.

Each incremental Mercedes that is produced does not raise the price of a
Toyota. In fact, the derivative of that price curve is most likely negative.

Why is housing any different?

>The current issues have more to do with a glut of cash than a shortage of
housing.

I agree that low interest rates have exacerbated the situation, but the fact
of the matter is that there is a net influx of people to large cities like San
Francisco, and there is indeed a shortage of housing. Why you choose to ignore
the data, I do not know.

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Tiktaalik
This is not at all surprising when one considers that most of the time housing
intensification is focused around low income areas, and so new market priced
housing goes hand in hand with gentrification and displacement of low income
residents. Why wouldn't existing renters be opposed to this?

This wouldn't be an issue at all if municipal governments instead intensified
housing in the _most expensive areas_ , but homeowners there are rich and
capable of superior organization. For that reason you basically never see any
attempt to upzone wealthy areas with low density detached housing.

The only available easy out for municipal governments is to rezone industrial
land to residential and upzone it before anyone lives there.

~~~
michaelchisari
I've always thought that cities needed to focus on redevelopment as a much
broader, city-wide strategy. Instead of following trends of what the next "up
and coming" neighborhood is, actually revitalize all areas of the city.

Right now, Chicago has maybe 6 neighborhoods that people from outside of the
city consider moving to. This puts a ton of pressure on the rents in those few
neighborhoods and their surrounding areas.

But if the whole city had proper services, transportation, properly maintained
housing units and relatively low crime, that should ease the demand on those
few neighborhoods.

Instead, people just move into one area until it's too expensive to live
there, then get pushed into another area until it's too expensive to live
there, and so on and so forth.

~~~
seanmcdirmid
This doesn't work in practice. Places like Switzerland have all around good
city strategies, yet finding a place to live is still super hard and super
expensive. You can't even run off to the ghetto for cheaper options.

~~~
michaelchisari
There are always geographic considerations that limit market availability, of
course.

~~~
seanmcdirmid
Its not even that really. They just do well overall. Even Renens outside of
Lausanne, inconvenient in its location, is a nice place to live with decent
public transit links. I guess you could try living farther away, but the train
system even makes that viable. There is nowhere to get a good deal, except
maybe France, but I doubt Evian is much of a deal, and that ferry ride across
Lake Geneva is bound to get old eventually.

~~~
michaelchisari
In that sense, it's the evidence of a strong economy. There's a lot of factors
in play, like Switzerland having double the population density, but half of
the income gap disparity. The United States has twice as many people living in
poverty than Switzerland.

There's also the issue of how tourism affects local economies.

So yeah, it's a complicated issue.

~~~
seanmcdirmid
> like Switzerland having double the population density, but half of the
> income gap disparity.

If you build evenly gentrified cities, isn't that going to be the results
anyways? (also, I'm sure the US has way more than twice the number of people
living in property, perhaps you meant per capita)

But when I was living there, it was fairly stressful. I guess if I was a
poorer resident rather than a relatively more well off post-doc, it would
actually be easier to find housing since there would be some assistance at
least.

~~~
michaelchisari
> perhaps you meant per capita

Percentage of population, yes. 7% in Switzerland, 14.5% in the US.

> But when I was living there

Do you mean living in Switzerland or the United States?

~~~
seanmcdirmid
Switzerland

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saudioger
Of course they are, they don't want to get priced out of their neighborhood by
gentrification. You can live in an undesirable area for 20 years and have
somewhat stable rent, but once the area gentrifies because of a crunch on
housing availability, a developer's going to start buying properties, slapping
on a coat of paint, and doubling the rent.

It's happening _incredibly_ quickly in Boston's neighborhoods one by one. It
happened to The South End, Southie, Jamaica Plain, Somerville (not technically
Boston proper but 10 years ago they used to call it Slummerville), and now
Dorchester and Roxbury are gentrifying.

I own a single-family house in a previously undesirable area, and on 2
separate occasions I've had developers come to my door cold trying to buy my
single-family house to tear it down and develop on the property.

~~~
BurningFrog
But new developments _lower_ rents, since they increase the housing supply.

But a lot of people simply don't understand this and fight development despite
it being in their best interest.

 _Then again_ , I see that one of the two studies was done in San Francisco,
and if the renters are in _rent controlled_ apartments, they don't have much
reason to care about housing prices and can oppose development because they
don't like change.

~~~
drb91
They only lower rent if they meet demand. If demand far outstrips supply, rent
will continue to rise, just slower with new development.

~~~
BurningFrog
They always lower rents, compared to if they hadn't been built.

~~~
drb91
Not if they _increase_ demand, as gentrification does!

~~~
BurningFrog
I know people _think_ that happens, but economists haven't been able to see
it.

What _does_ happen is that both housing construction and gentrification
increase when the economy is going well. It's easy to think that one is
causing the other when in reality they're both caused by an underlying factor.

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tysonzni
Link to paper:
[http://mhankinson.com/assets/jmpWeb.pdf](http://mhankinson.com/assets/jmpWeb.pdf)

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tysonzni
tldr; At the macro (city-wide) level, renters tend to be more supportive of
development. But wrt development in their own neighborhood, renters in high-
rent cities exhibit NIMBY-ism towards market-rate housing (associated with
gentrification). Interesting that they don't mind more _affordable housing_ ,
which suggests that their concern is not simply economic but rather involving
risk-aversion, fear of lesser quality of life, and gentrification.

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wnissen
Renters and pro-growth, urban-minded owners would seem to constitute a
majority in many of the highest cost parts of California. And yet my town
recently passed a milestone of sorts: the principle and interest to buy the
median home consume 100% of median household income, before taxes, food, or
any other expenses. This study appears to explain how the current situation
has come about.

~~~
michaelchisari
California seems to have a (huge) added problem of speculative real-estate
investment. The median price on a home will skyrocket if there's a significant
amount of people who buy up properties for investment and not for use.

~~~
eherot
People buy properties as "investments" when they see prices rising constantly,
not the other way around.

~~~
michaelchisari
Sure, but it exacerbates the problem of rising rents.

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patio11
Isn't the causational arrow in the other direction? If your polity didn't
prefer to have high prices, you wouldn't have high prices. If you have high
prices, _of course_ your polity prefers high prices.

~~~
closeparen
It’s surprising that renters would ever prefer high prices.

~~~
tropo
Prospective renters prefer low prices. Existing renters don't care, but they
like the things that cause high prices.

The rent will not change for the life of the lease. Under rent control, the
renter won't be much affected ever.

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tropo
This is due to rent control.

Renters become more like homeowners when there is rent control. They
essentially have an investment to protect. Their immediate financial situation
(rent being due, much like a mortgage payment or property tax) is unaffected
by neighborhood changes. The enjoyment of their neighborhood is affected
though, and they seek to maximize this.

The difference between the controlled rent and the market rent is in some
sense an income that the renter receives from the landlord. The higher the
market rate rent, the greater this income will be.

Long leases may have a similar effect; this is voluntary rent control.

~~~
Gibbon1
Nope not due to rent control. It's due to things like it it taking me 45
minutes today to drive from my apartment to the bay bridge.

What I find annoying is the same people that are against rent control and
zoning are also utterly against government providing basic public services
such as buses, subways, and mass transit.

So developers build more office space, businesses add jobs, people get packed
in tighter with no increase in transportation services to match. You don't
need to be a renter or owner for that to rankle. And at least as a owner in
theory the value of you asset is going up. As a renter there is no upside at
all.

~~~
eherot
> What I find annoying is the same people that are against rent control and
> zoning are also utterly against government providing basic public services
> such as buses, subways, and mass transit.

I guess I must be the exception then. I am very much in favor of government
spending on public transit (which is a reliably good investment in our
economy) and generally against rent control (which is known to suppress the
creation of new rental stock) except as a temporary measure.

