Tuesday, August 24, 2021

Housing shortages

This is Joseph.

One place where Mark and I disagree is whether the YIMBY (yes in my backyard) movement can make arguments dumb enough to make the NIMBY (not in my back yard) group seem less dumb. So I thought I would lay out the essential piece of my argument.

Let us imagine that the government decided to tightly regulate farming. This isn't a ridiculous argument as these disasters have been attempted before. The result of bad policy could easily be a food shortage, which would cause prices to rise, and since the options are eat or die it isn't crazy to imagine food prices would rise quickly. Now imagine you needed permission in order to increase food production, from the people earning the excess profits. They would resist this at all costs, because everybody likes being rich.

Now consider housing, also a necessity (especially in climates where living outdoors is hazardous). In Canada we see a shortage of new construction to match population growth:
Now every pro-growth policy reduces housing prices (one might say that this is the point). Lack of affordable housing is a big deal. Similarly, there are many non-carbon emitting fuel technologies that have to be built somewhere. Ranging from nuclear plants (consider the zoning on this one) to windmills (where senior politicians have claimed health effects like cancer, even if these seem unfounded).

YIMBY can go wrong with too much unplanned, unrestricted growth with too little care for the consequences on the inhabitants. It is not the goal to replicate the squalor of London during the Victorian age. But the idea of stopping all development in the service of neighborhood character is also a clearly bad goal. In 1200 AD houses were very different -- do we really want to preserve the character of the medieval city? 

Finally, this really is a collective action problem. Allowing small blocks of residents to protect property values by blocking all development means that if any one block cracks then they take all of the consequences while preserving other people's wealth. The real question is the scale at which these right operate -- at the individual or city level it is probably ok, at the small neighborhood level you can see some real issues. 

Anyway, just a quick thought. 

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