There is now a NIMBY index

Check out the new NBER paper by Joseph Grourko, Jonathan Hartley, and Jacob Krimmel:

We report results from a new survey of local residential land use regulatory regimes for over 2,450 primarily suburban communities across the U.S. The most highly regulated markets are on the two coasts, with the San Francisco and New York City metropolitan areas being the most highly regulated according to our metric. Comparing our new data to that from a previous survey finds that the housing bust associated with the Great Recession did not lead any major market that previously was highly regulated to reverse course and deregulate to any significant extent. Moreover, regulation in most large coastal markets increased over time.

One embedded lesson is that the number of veto points over new construction is increasing.  And “By our metric, about one half of all communities in the Regulation Change index increased regulation, one-third decreased, while only 18 percent showed no net change.”

Here is a graph of housing affordability vs. their index of restrictiveness:

Here is my earlier Bloomberg column calling for more indices — this is exactly what I wanted.

Comments

That’s a terrible linear regression.

Yes and no. Putting a vertical line at 0.25 of the Wharton Index would give a pretty decent fit, too! :-)

Looks like about a half of the problem is NIMBY.

No kidding, who'd a thunk it? My puzzle is that no more new towns or cities spring up. Of course, restrictiveness is endogenous: Do it when you can afford it.

New cities spring up all the time. It is just that they usually don’t start from absolutely nothing. But metropolitan Phoenix, Atlanta, Dallas, Houston, Miami, Charlotte, Denver, Austin, San Antonio, Raleigh, and even DC have grown so much over the past 50 years that they are essentially new cities. The same could even be said of San Jose and Los Angeles. And there are also the Florida metros (basically all of them).

Yes. The city that I live in (an exurb of one of the top 10 metros) had a population of of < 3000 in 1960, and it's about 120,000 today. It's basically all new in the last 25 years.

Good point.

In case you're looking for the data itself, the last sentence of the paper: "On Monday, January 15, 2020, we will post the underlying data so that researchers may use it to try to answer that and other questions."

The latest version I can find online is 2008-01-24, from one of the authors: http://real.wharton.upenn.edu/~gyourko/landusesurvey.html

It would be much more interesting to see if NYC is more or less restrictive than Paris, Hong Kong, Stockholm, Tokyo, Berlin, or Seoul.

That is the right question, of course. As six cities aside from NYC are mentioned, I can tell some stories, but not run a useful regression.

Paris is too big on account it's in France. Hong Kong has no politically similar hinterland. Stockholm has no habitable hinterland. Tokyo is hemmed in by mountains, and expands linearly along the coast. Berlin has real competition from other cities. Except for Paris, all this seems efficient.

Alas, Seoul I know nothing about. :-)

Stockholm has plenty of habitable hinterland. All the way to Uppsala could be developed. It's not uncommon to commute from Uppsala to Stockholm. Soedertaelja in the south is similar.

Stockolm is fairly small city. The metropolitan area is 2.2 M .

https://en.wikipedia.org/wiki/List_of_metropolitan_areas_in_Sweden#Metropolitan_Stockholm

Stockholm has a crazy housing situation because the Swedes massively over regulated their housing market. You're not meant to own a home and rent it out. If you own an apartment and move you're meant to see.

It's all nuts. It was nuts when I lived there 20 years ago and snagged a dodgy 'second hand' contract and now it's much worse.

https://www.bbc.com/worklife/article/20160517-this-is-one-city-where-youll-never-find-a-home

As for Berlin, well, Berlin isn't that important as a German city and was doing fairly well with housing until it's become more successful. Now caps on rents rises will make it all crazy. Berlin is in a big flat plain as well and could be easily expanded. It also has pretty good trains that could be used to keep housing prices low. Berlin is more comparable to Washington DC than to New York.

The worst places in Germany for housing are more like Frankfurt, Muenchen, Dusseldorf and Hamburg. Again, if rules were constructed for construction things could be made much better.

In California, being "progressive" trying to keep the place looking as much like it was the day you showed up as possible.

Ridiculous. People moved down to the new cities of Irvine, Mission Viejo, Laguna Niguel, and (new/old) Dana Point with wild and joyous abandon. You only had to stay in LA if you wanted to.

I suppose that it is interesting to note that in that last burst of greenfield development, buyers absolutely loved the master planned communities. They had sweeping tree lined boulevards, green belts, shopping centers with plentiful parking.

The "regulation" wasn't added by nimby residents, that was the product offered by developers.

OK, Boomer.

Tear your house down and build an apartment complex. Wait, you made that illegal.

Scroll up to see the regression if you’ve forgotten it somehow between clicking on the post and writing a comment.

Zero value added.

San Francisco Dogs Are Scooping People Poop.

"Wait, you made that illegal."

In the land feed covenant placed there by the land developer, along with bans on clothes lines, a long list of excluded trim colors, ....

Sure, the absence of affordable housing is restricting mobility of labor, but the absence of decent transit is even worse. Is there a transit index? If not, there ought to be.

They declared war on poverty in the '60's, '70's, '80's, 90's, '00's, '10's and poverty (and drugs) won.

Don't forget water and sewer.

In New England, minimum land per housing unit is at best an eight of acre with town water, and half an acre if a well is required on the lot. But for much land, the geology requires more.

My guess is California is much worse. I believe both ground water draw and surface water public water system draw is causing salt water incursion into ground water.

Most big cities in California, and other nearby States, are the result of big government water projects, both Federal and local, requiring higher taxes and debt backed by taxes.

The willingness to tax and spend on water projects dried up circa 1980, so California, the West, NYC, et al, have been riding on high tax projects from mostly the 1960s back to the 1860s.

The "just say no to taxes" has gotten a free ride on the high taxes from before, and now the ride is falling apart.

And economists, when it comes to water are faced by this big government regulation:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Water has been considered private property in the West since it was claimed by Europeans.

I thought Native Americans didn’t have the concept of private property, but they did fight each other for their land?

I have to thank MR. You actually got me thinking about Native Americans vs. the Azlatan movement and would they be fighting over the spoils.

"The most highly regulated markets are on the two coasts, with the San Francisco and New York City metropolitan areas being the most highly regulated according to our metric."

Which are among the most important metropolitan areas in America. Not many world-change business start in the slums, it seems. It takes a effectively working State.

"It takes a effectively working State."

No one has ever accused contemporary California of being an effectively working state.

No, but would it be more effective if hordes of slum-dwellers invaded it?! I don't think so. Let us be blunt. Loosing house regultation in NYC and California would just kill the golden eggs-laying goose, which it is not, I think, what we, Americans, want.

"No, but would it be more effective if hordes of slum-dwellers invaded it?!"

Insert comment about illegal immigrants and the large increase in homeless people I'm California

Haha, wow. Both SF and and NYC have plenty of slum dwellers, likely more per capita than the average city. In fact they both pay out large sums of money to attract slum dwellers. Even the richest neighborhoods in New York usually have lots of poor people about because the poor neighborhoods are so close to the rich ones. The productive classes are probably nowhere less segregated from ‘slum dwellers’ than in NY. Housing regulation does nothing to preserve any golden goose. In fact it creates ‘slum dwellers’ and slums by exacerbating poverty and concentrating poor people in neighborhoods full of public housing or rent controlled units.

If the army of homeless people sleeping on the steps of the NYSE isn’t killing the ‘golden goose’ I don’t think some affordable housing will.

"Affordable housing" is just a pretty name for more slums-building to enrich well-connected real estate developers. Why don't rich real estate developers don't build slums in their backyards?

"It takes a effectively working State."

Which have been destroyed since conservatives cooped the GOP and elected first Reagan, then lots of governors and legislators, and finally Trump.

It's not like Indiana, Kansas, Alabama, et al have solved any of the problems the GOP and conservatives spend 80% of their time blaming on California voters and pols and elites. Their other 20% is spent blaming NYC, Baltimore, Chicago, DC, Puerto Rico,....

Conservatives, et al, never attempt to solve any problems because they would need to put their money where their mouth is, and that means their solution needs uber wealthy liberals as customers, and bulldozing out the poor, working class, homeless.

I live in a flyover state. My husband was affected by a California business rule because a company he does business with does business in California, so yes, I can blame California.

Those states you listed don’t have the poop problems California does. Or the possible theft problems. How can a small retail business stay in business if a thief is allowed to walk out with $1000 worth of goods and not be prosecuted?

That seems to me, from what I’ve read, a NY state of mind, it’s a price one pays to live in an urban area.

Regulation increasing the cost of housing is surely in many cases a feature, not a bug. The desired effect may be precisely to keep out the riff-raff. But homeowners associations with high fees are perhaps a more efficient way to achieve the same effect. This way unnecessary regulation need not obstruct the market serving the riff-raff.

When developers, homeowner associations, and governments align, it does undermine the simple libertarian morality tale.

Should developers, associations, and first-round buyers not be free to enter into voluntary contracts?

Absolutely. All people, even liberals, should be perfectly free to set up white/Asian school districts with high property values to keep the riffraff out, from which to lecture the rest of us about President Trump.

You are a silly person, but you highlight that we do rely on government to prevent such contracts from going "too far."

And as land gets built, greenfield development dries up, we are increasingly relying on government to regulate density. "Too far" is being judged in a new way.

Usually "more density for you, less for me," if we're honest.

(I did vote for more development in my non-master-planned city, but the measure lost by a fair margin.)

"Should developers, associations, and first-round buyers not be free to enter into voluntary contracts?" Agreed they should be.
This is why I'm on the fence about NIMBY/YIMBY. When you are buying in, you know the rules. YIMBY wants to change the rules against the support of 51% of homeowners. I don't care what it does to house prices. The US is huge, and there are plenty of places to move to. No community has an obligation to house everyone.

The graph would have been more interesting had you plotted wealth against restrictiveness.

It is the wealthy who restrict and most active NIMBY's. They would, however, like to have a high rise or high density affordable housing in your neighborhood, just not theirs

The Trump Texas nimby index is 3/140.

That's the 3 miles out of 140 miles of private land Trump has access to for his wall.

Trump is stymied by this regulation:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Retired Boomer from 94% white New Hampshire lectures us about a wall.

Virginia is contemplating the elimination of local zoning, so that every home sale in Arlington and Fairfax counties will become an opportunity for a developer to tear down and replace with a duplex or four-plex.

I do hate it when my neighbors use their property in economically productive ways. I much prefer to live somewhere where property is solely used for status-seeking luxury consumption.

Oregon did exactly this, a few months ago. OTOH, a few months earlier than that they also passed a statewide rent control law. So I don't know what the net effect on housing will be.

Virginia, led by Grand Wizard Northam, is also already working against our civil rights. a Burgess (or was he a state senator) already attempted to threaten citizens with the national guard. Perhaps Virginia should not be looked to as a leader during its current period of decline.

I once foolishly pointed out, on a hyperventilating neighborhood thread concerning some quite modest default upzoning, sought by the city, that would obviously have had no bearing on our private covenants (except, just* possibly, by finally emboldening builders to challenge them, 60 or 70% of the text of those deed restrictions being honored mostly in the breach), that since the rental next door to me was over- filled with unrelated adults, IMO it might just as well be a triplex instead of a single-family home, or even consolidated with the shabby SF rental beyond that, and with my house too, for condos or whatnot ... as the neighborhood was in any case under the current regime changing in ways not necessarily purely desirable - in that amid the speculation a significant number of houses are untenanted, builders are essentially forced or at least heavily incentivized to replace the "not what consumers want" older houses with lot-devouring minecraft cubes of ridiculous volume in order to maximize square footage and make some sort of profit; and the new houses seem less likely - at between $1.5 and $2 million - to shelter the young families** that have traditionally been drawn to the area for its well-regarded elementary school that children can walk and bike to, and where they can learn to sing "Cielito Lindo" or whatnot in the company of other largely white and Asian kindergarteners. Or to shelter longtime area residents who might find their housing needs change someday, &etc.

Okay, in truth I only uttered the first clause of that run-on sentence, and I was careful to couch it in ding-y upspeak - but still my remark was poorly received. I think I made a couple of women cry. I am sorry for that, because I know the people in the neighborhood to be very tender-hearted. How do I know? Well, I'm going off not so much personal acquaintance, or their NextDoor hysteria over "who's that at my door on the Ring camera", as how many of them placed signs in their yard a couple years ago declaring that "In this house we believe: no human being is illegal, women are people too", etc.

So my conclusion is this: folks like T.C and A.T. should probably stop criticizing NIMBY so much. You can't have a YIMBY nation - which we largely do, no matter what the disingenuous may opine, demographic facts are facts - without NIMBY locally.

NIMBY and YIMBY are the same thing at different scales, and will be for a few more decades at least.

*Go, developers, go.

**After months on the market they do eventually attract buyers, I admit - mostly refugees from more expensive housing markets, I believe, who must be pressed for time and do not realize the micro-area is Baja Fashionable Area, not Fashionable Area itself.

As a wise man once observed, you can have one big national border or a lot of small municipal ones.

Minneapolis 2040 takes effect this Wednesday. Let’s see what happens.

Correlation != Causation. How about there is a confounding factor, say “where people want to live”?

It is of course ironic that the most Progressive cities in the US have the most expensive housing and restrictive market. But realistically, what would happen if we built 20-story cubes on every city block in New York and San Francisco? Wouldn't the top-tier entrepeneurs, managers and venture capitalists just buy themselves lower population density and create cities with more elbow room and pleasant areas for their wives and children?

I'm reminded of the highway construction in my neck of the woods. We continually build more highways to reduce congestion. But the congestion remains so something else going on, namely, that nobody wants to use public transit and everybody is chasing white/Asian school districts out to the exurbs. So more roads just equals more cars. And inside I-285, Atlanta proper has plenty of new construction of diminutive condos and apartments and square footage is still expensive. Obviously people are buying proximity to the professional service and upper tier-management jobs that pay them the high salaries to afford the nice in-town properties. And if the in-town properties aren't nice, then they don't get bought. I don't think you undo that dynamic just by building more housing.

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