Somebody wants to build some houses in Nimbyville. They developer stands to make money, and increasing the supply of housing will benefit those who want to move there[0] by (presumably) lowering the cost of housing overall.

This is fine, but there's a good chance the people in Nimbyville who own houses will see the value of those houses go down in the event these new ones are built. Or they may be hurt in some other less tangible way, the salient point is that they think it would be bad for them and are willing to expend some effort or forgo some utility in order to prevent the construction. Furthermore and importantly, they current residents have power over the new builds, via city councils and zoning and objections etc.

Hence the free market solution is to buy this privilege from them. The developers can offer to pay the people who stand to lose property value, until the proposition is profitable for the Nimbys. If the price gets too high then it might be worth it to go down another route like legislative change from a higher power like state government, or a PR guilt campaign. This seems to be what's happening now. I wonder though if you couldn't just pay people off? [1]

[0] Even if the housing isn't cheap, since it potentially frees up a cheaper house in the same area.

[1] You may argue that this constitutes rent seeking on behalf of the Nimbyvillians.

Housing has the big problem that it's a monopsony market. For that actual plot/lot of land there is only one seller.

Yes, nearby plots are kind of fungible, but when the same incentives drive the price up everywhere you run into the problem of having a market in a pathological state. It's impossible to add new sellers, the barriers to entry is too high (eg. you can't create new land there).

This doesn't mean that forcing communities to change is the best solution, but if they want to remain frozen in time they should pay for that privilege. (Eg. they should buy the land around themselves and/or the air rights so they can control new developments to exactly zero, ie. in their case by keeping everything static.)

After all this kind of proscription on change depresses the value of individual plots, because if someone would like to sell their plot they only can sell it to folks who will keep the existing house (or at best build a very similar one there), which is a strictly smaller group of potential buyers, than were new developments allowed.

The fact that the current inhabitants have such control over new construction is something I was taking as fixed, but I wouldn't argue it's healthy.

Finally, as a compromise between paying Nimbys and forcing them to pay, I would be interested in seeing a trial of a kind of mutual auction. For example, a group of residents and a group of developers secretly bid what the project is worth to them (positive or negative) and then the higher bid pays the other party the value of the lower bid. There is probably a name for this, and a theory that shows how to do it properly, but I'd be interested to see if some economic games could reach a better solution (in terms of regret-minimization, for example).

Monopsony is when there is only one buyer; monopoly is when there is only one seller.

Wouldn't the nimbys hold out for a higher price forever?

That's what happens if you try to build something like a railway: Once you've brought up 95% of the land you need, the owners of the final 5% realise they can demand a huge sum.

That sounds like the exact opposite of what you should be doing!

The fact of the matter is the city has taken without compensation the right of people to build whatever the hell they want on their properties. And your solution to this theft of a private right onto public hands is to not just formalize said theft, but to re-distribute such right to those who never had it in the first place, and who stole it via laws and regulations?

No.

The free market approach is to not interfere in what people can build in their properties. And if a community feels they must interfere, they are welcome to offer the owner of the property payment to purchase that right, which the owner may freely accept of reject.

That is what a free market solution looks like.

Not theft and subsequent redistributing of the proceeds to the thieves.

Unless it affects other properties in real ways - not with abstract "property value decrease". If someone emits toxic fumes, that constitutes real damage.

You can surely charge people for polluting the air outside their land, or making too much noise in other peoples properties/public land, etc... Without imposing limitations on what people can build.

In the same way you can fine people for littering or putting on loud music in public, you can fine them for doing the same when it's coming out of their property. No need to ban anything outside of the harmful act.

And indeed, such a stance, if applied equally everywhere and across the board, would very much be able to replace the few positive effects of zoning.

For example, instead of having dedicated "industrial districts", simply by enforcing pollution and noise levels on public rights of way you can ensure the harmful impacts of such pollution impact only those who agree to be impacted.

Want to build a loud factory somewhere? All you need to do is buy enough land around it that by the time the noise leaves your property line it's in low enough that its within the same levels as it would be in any residential area.

If you can't afford to buy that much land, you can simply get together with other industrialists and build up a private "industrial area" to make good on economies of scale. Best thing is, since that "industrial area" is entirely privately owned, the general public won't even have to pay for the road upkeep inside it!

The same thing happens with pollution! Feel free to make as many smoke stacks as you want! You'll be charged for every CO2 coming out of your property line! This encourages industrialists to put in carbon capture right at the source!

Great rant! I never really boiled it down to the bare nubs like that, but you are right.

I am going to share that basic idea around some. More people need to internalize it.

Having not done that is likely why people love stories about other people doing good.

I strongly disagree with that definition. Holding the door for someone is doing good. Picking up a plastic bottle off the street and putting it in a recycle bin is doing good. Doing good does not need to be high impact, or to even directly impact anyone at all.

And I thought through it in detail, taking your comment seriously.

Now, at times there is way more reward than sacrifice. And it may be very minor league, but it is there.

I agree with you completely in that the good is all about the target of the good, not our cost of action.

Not all good is high impact too. Just being a good human, holding doors, helping in small ways all add right up to impact the world we inhabit. Broad impact that is catchy. Everyone benefits.

But there simply is a cost of action, yes?

(Great discussion, BTW)

This explanation is commonly repeated, but it rings false, for a couple reasons.

One is that if you ever talk to a NIMBY boomer (or are related to one), you'll very rarely hear them talk about their home value, except in the context of lamenting how their kids can't live near them anymore. Instead, you'll hear them talk about how they'll lose their view if the high-rise goes up, or they'll be in shadow, or that it'll bring in the riff-raff, or the roads can't support more traffic, or how will the school systems cope, or it'll change the bucolic character of the town, or you won't be able to know your neighbors. It's all about preserving lifestyle, not money.

A second is that even if these are bullshit excuses for actually wanting money, their incentives don't add up. The worst NIMBYs are people who intend to die in their home and never move again. Economically, they shouldn't care about their home value, because by the time they can turn it into cash, they'll be dead. A lot of them are even childless, so the "leave an inheritance for the kids" argument doesn't apply.

A third reason is that development usually raises home values. 30 units on a half acre in the Bay Area goes for about $10M; 1 unit on a half acre in the Bay Area goes for about $3-4M. This is how developers profit, and how they can convince homeowners to sell to them in the first place. Upzone a 1/2 acre SFH and the homeowner can pocket a million or two over fair market value, and the developer pockets maybe $3M after construction costs.

A more likely explanation is to a.) take NIMBYs at their word when they say it's all about quality of life rather than finances and b.) understand that development privatizes gains among former and non-residents, socializes losses among current residents, and socializes gains among future residents. When a lot gets upzoned, the people who make a financial windfall are the developer (non-resident) and the seller (former resident). The people who enjoy a better quality of life are the new residents who move in and wouldn't otherwise have a home in a desirable community (future residents). The people who suffer a worse quality of life - for all the reasons listed above - are the existing homeowners (current residents). Guess who are the voters?

https://japanpropertycentral.com/real-estate-faq/building-he...

Good explanation, thanks.

While often repeated on HN, reality is that existing homeowners have the home to live in it, approximately none of them are tracking prices or caring if it goes up/down. The only exception is the house flippers, but those are a tiny minority.

Even for the rare few who do obsessively track prices, they don't matter because the city planning commissions who approve the permits to building companies are not consulting with any voters on what they do or don't do.

What does it matter? They bought property just like any other person in America. If you work remote does that mean you should have to live in the middle of nowhere to free up space for someone who commutes?

If your position is that a non-resident can come into town and force a long-time resident to have to move out just because they want to take their place, how is that ok?

Often times it could be a rich person defending his property name but it could just add easily be a poor family.

I’m no NIMBY but often times the solution isn’t easy because it has to be fair.

The people who want to hold the moral high ground have to also accept the suffering and sacrifice that go with it. "Doing the right thing" has a cost to it. That's exactly why I call these people out. They want to be seen as good people, but aren't willing to suffer the burden that goodness requires.

> Isn’t one group bearing the brunt of sacrifice the very definition of inequality.

No, it isn't, because I'm talking about voluntarily sacrificing for your community in the pursuit of a higher good than your own personal enrichment and the enrichment of your children.

> Often times it could be a rich person defending his property name but it could just add easily be a poor family.

Define "rich". Define "poor". When I was a young child, people who could afford to eat three meals a day were "rich". Today, I define "poor" as being unable to eat at a restaurant every day of the week and not being able to afford a first-class flight. It's an ever-sliding scale based on your own income, and everyone's comfortable sacrificing more - or less - than someone else.

Naturally this means that developments will be big to absorb these costs.

Things change over time. Whether it be 10 years or 100 years. Arguing about character of a neighborhood is somewhat nonsensical IMO.