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Wednesday, July 3, 2019

NIMBYism in US

Consider this example of a reprise of the Bootlegger and Baptist. One group of people (Baptists) oppose urban renewal by means of vertical development and densification on the grounds that it will cause gentrification and drive low income people further away from the cities. Some of them also argue that vertical growth is a scar on the urban form and erodes the city's character. Their preference is for more public housing programs to make housing affordable. Another group (Bootleggers) consisting predominantly of landowners fear that more construction will depress prices and erode their wealth. They find it convenient to hide behind the former and support the status quo.

The net result is a culture of NIMBYism that limits additions to the stock of housing supply in the largest cities. In the US, this trend is most acute in the West Coast Democrat-controlled cities. Immensely rich locals, all self-declared Liberals, hide behind the fig leaf of gentrification and lobby to maintain the status.

Sample this about San Francisco,
The San Francisco city council, acting unanimously, recently rejected a 63-unit housing complex because it would cast a shadow on an adjacent park. In nearby Berkeley zoning officers can deny new development that “would unreasonably obstruct sunlight, air or views.” Local residents in a posh part of the city have raised over $100,000 to contest plans for a new homeless shelter, claiming that the new “megashelter” will breed crime and violence (“drug users” and “pets, including those designated as ‘vicious’ will be allowed” they warn). These tactics, along with excessive environmental reviews, have hampered new development in the city. Since 1990 the city has averaged a mere 1,900 new housing units each year... West Coast cities, which are under near-total control of the leftiest Democrats around, rank among the least affordable for middle-class Americans and most inhospitable to the poor. Every morning traffic in the Bay Area is clogged by service-sector commuters, some of whom live far off in the state’s Central Valley and must make three-hour long treks in each direction. The smog from the cars settles in the valley, resulting in some of the worst air quality in the country.
City Journal has more on California, in the context of the State Senate's decision to shelve Bill 50 which would have eased restrictions on housing density along public-transit corridors and in job-rich areas,
Suburban homeowners were the real force behind SB 50’s demise... wealthy Los Angeles suburbs like La CaƱada Flintridge... haven’t built a single apartment in decades. For all the disturbing media coverage of homelessness and displacement in the Bay Area and Los Angeles, the housing crisis has mostly been a boon for California homeowners. The planning-induced scarcity—coupled with soaring tech-sector salaries and a steady flow of billion-dollar IPOs—has sent house values skyrocketing. Even shacks now command bids well north of seven figures. Houses that might have sold for $40,000 in the 1970s can easily go for $2.5 million today. Compounding the trouble, California is constitutionally unable to tax much of this wealth. In most states, rising house values would mean higher property taxes. But California’s Proposition 13, a 1978 ballot initiative that sets real estate taxes at 1 percent of a property’s sale price and limits annual increases in to 2 percent per year, means that property-tax revenues don’t rise proportionately with home values. With house prices increasing many multiples since 1978, Prop 13 has produced one of America’s most arbitrary state tax systems. Its terms reset only when a home is sold or rebuilt, so it’s common for neighbors in identical houses to pay dramatically different tax bills. Property owners have no incentive to sell, downsize, or host additional housing units as costs rise.
This is a telling reflection of the elites. In the context of California above, we are not talking about the traditional landed or rich elites. While there are those too, we are mainly talking about the generation which has become wealthy on the back of technology and knowledge-based economy over the past quarter century. Incidentally, they are also vocal supporters of liberal causes. Many of them would even have philanthropies which seek to support public causes, including addressing the affordable housing challenge in developing countries and the US. The hypocrisy cannot be lost. 

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