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Rob Nanfelt is on vacation this week. But we still have information you’ll find valuable. Our REBIC Board President, Michael Foess had lunch with the author of this article, Aaron Houck. Michael said they specifically discussed the Veto Power of Incumbent Residents (another term for NIMBYs). We think Aaron’s perspective is a great approach. As a point of reference, Michael informs us that Aaron is now working for Robinson Bradshaw as a land use attorney but wrote the article when he was at UNCC. We share some snippets and as usual, encourage you to review the entire document.
Policy Essay: Reducing Policy Barriers to Housing Abundance
March 23, 2023 | Aaron Houck
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…Skeptics sometimes express fears that permitting developers to build more freely will simply create more profits for corporations and landlords. That is, people worry that any and all surpluses created by new supply will be captured by already-wealthy actors while homebuyers and renters remain stuck with rising costs. There’s certainly a logic to that theory, and it seems plausible based on individual stories we’ve heard (or experienced ourselves) of particular households being priced out of a home or neighborhood. But when social scientists have gone looking for evidence of this phenomenon as a driver of rising prices overall, they have not found it. In fact, the data suggest the opposite.
Study after study … finds that increasing housing supply helps keep prices and rents down—even the construction of “luxury” apartments with higher-than-average rents for the neighborhood. (For more, see this report on “Supply Skepticism” from New York University’s Furman Center or this “Research Roundup” from UCLA’s Lewis Center for Regional Policy Studies).
To understand why, think about the counterfactual where such housing doesn’t get built. The absence of such housing doesn’t mean that demand for units disappears—it still exists. So those would-be buyers for never-built housing go looking for other options, bidding up the price of available units. People who can’t quite afford the rising prices of the very most expensive housing turn to slightly less expensive (but still expensive) housing, bidding up prices in that submarket. This dynamic cascades down through all segments of the housing market, crashing hardest on the least expensive segment of the housing market. Housing scarcity disproportionately harms low-income households. Housing abundance benefits low-income households.
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The Veto Power of Incumbent Residents
To the extent local policies contribute to the shortage in housing, the resulting problems with unaffordability are a self-inflicted wound. Why would we do this to ourselves?
The affordability crisis does not affect everyone equally. For instance, from the perspective of an incumbent homeowner, the phenomenon I’ve been calling an “affordability crisis” can be reframed as something completely different—the rapid appreciation of their most important financial asset.
If they already own property, they have a material interest in seeing property values increase. Sure, they may feel some sympathy for renters, young families, and newcomers to the region who struggle to access adequate housing without breaking the bank. But their pain is a property owner’s gain.
The interests of incumbent residents systematically differ from those of prospective residents in critically important ways. Incumbents often seek to preserve the status quo of their immediate surroundings. They selected a particular home in a particular neighborhood—they don’t want to see it change. Change inevitably involves disruption, and new development brings more people, which means more traffic, more crowds, and more noise. The demographics of the newcomers are likely different too. And if on top of all that additions to the housing supply also prevent home values from appreciating, then why would any incumbent resident support new development?
Prospective residents, by contrast (at least until they themselves become incumbent residents), want new places to live. They want those places to be affordable. The construction of new housing units is thus in their interests.
So who wins in this political contest between the very real incumbent residents and the theoretical, hypothetical future residents? The incumbents win nearly every time because our policymaking processes privilege them.
Our land use policymaking gives power and priority to incumbent residents of neighborhoods. Public hearings regarding rezonings and area plans are open to all in theory, but in practice the participants are far from representative of the full population that will be affected by the decisions—they are disproportionately wealthy, old, educated, White, and homeowners.
Current homeowners (sometimes called “homevoters” or “neighborhood defenders” in the academic literature) will show up and express their opposition to change. But someone currently renting in another part of town or a nursing student in another city won’t find it worthwhile to attend and advocate on behalf of development that might house them in several years’ time. Many future buyers of proposed starter homes that might eventually be finished in ten years’ time are today only children, more concerned with Marvel movies than mortgage rates. Those voices and interests won’t be heard, so they’re less likely to be considered.
In effect, incumbent residents enjoy veto power over new construction in their neighborhoods. Their frequent exercise of vetoes is a major factor in the under-production of new housing supply. Blocking housing development doesn’t release housing market pressures, it displaces them. Just as with a balloon, pushing down in one place produces bubbles elsewhere. In the context of growing demand, squeezing supply means prices rise.
And in places experiencing population growth, like greater Charlotte, the incumbent residents of different neighborhoods or municipalities sometimes act as if they are in competition with each other to prevent growth and change from occurring within their borders. They may not oppose the growth of the region more generally, in fact—and this is crucial—they probably support it because of all the prosperity regional growth brings, but they don’t want it happening near them. A chorus of “not in my backyard!” reverberates across the region.
In the past, Charlotte’s development pressure could be pushed from existing neighborhoods to undeveloped farmland or forests without incumbent residents and their vetoes. But as more of the region’s land is built out and occupied by incumbent homeowners, that release valve is no longer available to the same extent. Without change, housing prices will continue to increase or—worse still—the region’s economic growth will stagnate.
As a comprehensive plan, Envision Gaston will consider specific actions that can better align growth and development in the unincorporated areas of the County with local values curated through community conversations. The planning process lets the community…
Work collaboratively to ENVISION an ideal future,
Create a PLAN focused on that future, and
Prepare the County to ACT in the years to come.
A key piece of the plan will be the Future Land Use Map, which will guide future growth and development. A series of framework elements will support the land use strategy. These framework elements will touch on topics such as:
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Let your voice be heard! We need your input in three important ways.
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Community Workshops (Links below in our calendar so you can add a time and date to your personal calendar.)
Choose the best option for you and drop in anytime to participate!
Tuesday, August 5
11:30am to 1:00pm OR 4:30pm to 6:30pm
Location: Gaston County Library (Main Branch) – 1555 E Garrison Blvd, Gastonia
Thursday, August 7
4:30pm to 6:30pm
Location: CityWorks – 1401 E Catawba St, Belmont
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