08.08.2017
  • United States

What’s In My Backyard?

YIMBYs look to the free market to solve the housing crisis. But the profit motive is what caused the affordability crunch in the first place.

The view from the roof of Chelsea Park, a luxury building in New York with low-income "set-asides." StreetEasy

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Earlier this year, Massachusetts Democrats almost passed a party platform that included support for rent control, stronger tenant protections, inclusionary zoning policies, and land trusts. Local progressives, including delegates from Our Revolution MA, submitted a resolution that garnered wide backing and almost passed. But the pro-tenant measure ultimately failed. The sticking point? The resolution also called for removing existing language that advocated building market-rate housing.

Delegates aligned with the national YIMBY (Yes In My Backyard) movement felt that it was more important for the platform to explicitly advocate for more housing than to incorporate additional tenant protections and programs focused solely on affordability. They joined with conservative anti-rent-control Democrats to block the resolution. While the final platform did include tepid language about protecting tenants (and landlords) from discrimination, it also endorsed “efforts at all levels of government to encourage the production of new rental units,” including “public and private sector partnerships.”

So who are YIMBYs? And what effect have they had on the national housing movement?

YIMBYism is a response to the better-known NIMBY, or Not In My Backyard, movement. The prototypical NIMBY emerges to oppose a development in their immediate neighborhood because it reduces quality of life: increasing traffic, blocking views, casting shadows, generating noise, etc. NIMBYs are usually property owners, and they are likely to vehemently criticize a development they think will decrease their property values, such as a homeless shelter or low-income housing project. Their opposition builds on a history of racism and discrimination in housing access, linked with practices like redlining and restrictive covenants.

While people rarely self-identify as NIMBYs, YIMBYs are loud and proud. They strongly support increasing overall housing stock, arguing that the affordability crisis is a product of restricted development in growing urban centers. When confronted by arguments that market-rate development drives up local housing costs and leads to displacement, they respond that any opposition to development (or developer profit) is NIMBYism that ultimately opposes the interests of low-income people and contributes to displacement.

To their credit, YIMBYs have correctly identified some of the trends that erode affordable housing, like exclusionary zoning in suburbs and an influx of tech workers in places like San Francisco. But their framework is fundamentally flawed in two crucial ways.

First, by positioning themselves as NIMBYs’ virtuous foils, YIMBYs paint all critics of development as entitled, self-interested actors who have no concern for the greater good — ignoring the fact that it is quite possible to be skeptical of a development for reasons other than personal greed.

Developers play a huge role in shaping urban economies. Yet they’re accountable to their investors, not to the communities where they build. It’s not unreasonable for tenants being driven out by rising rents to challenge projects that benefit from the value of the neighborhood they once called home. In many of these projects, “market-rate” rents are far out of reach for the surrounding neighbors. For example, in Boston’s Egleston Square, organizers are challenging a neighborhood development plan that includes apartments priced at $2,500-3,000 a month, in an area where half of the current residents make less than $35,000 per year.

It is hardly an understatement to say that many of the luxury developments in formerly low-income neighborhoods fail to address any of the existing concerns of that community. Nevertheless, YIMBYs attempt to claim the mantle of equity and fairness, and to pigeonhole all critics of development as reactionary opponents of progress. This shouldn’t come as a surprise, as many YIMBY groups are funded in part by developers and real estate interests.

There could be some use for the YIMBY in affluent suburbs, where opposition to development is often inextricably linked with opposition to affordable housing and racial inclusion. Suburban exclusionary zoning and NIMBYism deny lower-income people, often people of color, access to suburban school districts and other amenities, and concentrates the burden of providing housing in cities. But it’s not clear that the YIMBY analysis differentiates between wealthy suburbs and gentrifying urban neighborhoods — their emphasis is on more construction wherever developers see an opportunity to build.

The second, and more important, problem with YIMBYism is that it is based on an embrace of the speculative housing market. It assumes that the cause of the housing crisis is a dearth of supply, and that the market will address the crisis if restrictions are lifted.

This may be true on a regional scale. But even then, the resulting drop in rents and home prices are not enough to bring housing within reach for most working people. In order for expanded supply to solve the crisis, land prices would have to be much lower than they are now, or the state would have to restrict the price of land. In the current market, land is extremely valuable in cities like Boston and San Francisco. That means the purchase price is high, and since construction costs are also high, rents must be through-the-roof if developers want to recoup their investment and make a profit.

The YIMBY narrative rests on an idea called filtering, which maintains that even luxury construction increases affordability: as new luxury units are built, wealthier residents move into the new housing stock instead of competing for existing lower-quality housing. Apart from the condescension — should low-income people really have to wait for housing to “filter” down to them? — this framework ignores the reality of today’s housing market. Existing housing is more likely to be turned into short-term rentals through Airbnb, flipped to a condo developer, or turned into a high-end rental than it is to be occupied by a low-income family. There is also strong evidence that rents in existing housing near new luxury housing rise more than rents in apartments that are not close to new luxury housing.

As the Lincoln Institute of Land Policy outlines in a recent report:

It might stand to reason that development of housing — any kind of housing—would lead to lower housing prices. In most urban areas, however, the opposite occurs. Construction of new residential real estate impacts the price or rent of existing homes in two different ways simultaneously. As the basic notion of supply and demand suggests, the addition of new units in a given market will inevitably put some downward pressure on the cost of existing units. But the larger effect tends to be upward pressure on housing costs because new homes are primarily built for higher-income residents . . . Modest price increases in a region can translate into very acute increases in specific neighborhoods.

New development often comes with marketing campaigns that promote not just one building but the surrounding neighborhood, which can send rents soaring.

As developers and real estate brokers attract the high-income residents who can afford the new development, those residents also demand higher-end retail, restaurants, and neighborhood services. The incoming retail can also pay higher rents, pushing out existing neighborhood businesses and lower-income residents.

People’s lives are affected intimately by changes at the neighborhood level. Gentrification and displacement impact mental health, education, and income. Although a resident displaced from a particular neighborhood by new development might be able to move to a different, more affordable neighborhood, they will lose access to jobs, social-support networks, and public transportation, among other things. Our cities are experiencing a public health crisis because of the increase in evictions and displacement. Any philosophy that accepts this trade off — displacing existing residents in order to spur a small regional decrease in housing prices — is deeply flawed.

The idea of filtering, as well as the premise that new construction will bring down rents, means little when housing can be, and often is, used as an investment. Boosting the number of housing units doesn’t necessarily mean people who need homes will get them. Increasingly, what we see in so-called “global cities” is a proliferation of housing as a global commodity, not a basic necessity.

In Boston — the capital of the state where Democrats chose to promote new construction over tenant protections — housing-as-investment has embedded itself in the landscape. In August 2016 the Boston Globe reported that “Boston is an increasingly popular destination for international real estate investors looking to park their cash in an uncertain global economy.” At least sixteen of the luxury condos in downtown Boston’s new Millennium Tower were bought by a single buyer on behalf of wealthy foreign investors.

San Francisco is having the same problem. As the Bay Area publication 48 Hills recently wrote:

Developers build not to meet the market demand but to meet the demands of their investors. In San Francisco in the 1980s and 1990s, it was high-rise office space, not housing, that brought the highest returns to investors . . . Today, investment capital gets higher returns with luxury condos. So that’s what is getting built. It’s not NIMBYs, or Mayor Lee, or zoning policy that is driving the gold rush of housing for the very rich: its international speculative capital.

Ultimately, YIMBYism is an exhortation to unleash unfettered market forces to remedy the housing crisis, despite the evidence that the profit motive is what caused the affordability crunch in the first place. Mortgage lenders realized they could make more money selling subprime loans and defrauding home buyers than they could by ensuring homeowners long-term stability. As a result, many former homeowners have joined the renter nation, competing for an increasingly unaffordable rental-housing supply.

YIMBYs argue that zoning and other restrictions on development prevent the market from meeting people’s housing needs. But the housing market has never met the needs of the poor — in fact, while the latest housing crisis was caused by the mortgage market’s collapse, working people have been overpaying for substandard housing since at least the mid-nineteenth century, well before New York City pioneered zoning restrictions in 1916.

By advancing a narrative that privileges development (and developer profits) over non-market strategies and tenant power, YIMBYs provide cover and political support for politicians who want to be seen as progressive but don’t want to confront developers. Some YIMBYs are running for office themselves on a pro-growth platform.

If questioning development is a sign of small-minded reaction, and encouraging development is the mark of a data-driven urban progressive, then all the politicians need to do is let the new buildings rise and smile at the ribbon-cuttings. But that’s too easy — and it doesn’t work. Many people are waking up to the fact that the market cannot provide affordable, quality health care, and are campaigning for a national health insurance system to provide that care. In the same vein, we should be advocating for a national housing plan that guarantees stable, decent housing for everyone, including the poor.

At the end of the day, YIMBY/NIMBY is a false choice. We need to ask: what is being built in my backyard? Who benefits from that development? And who loses?