Tuesday, May 23, 2017


I'm with the YIMBYs: advocates of less restrictive urban housing development, including development of more market-rate housing. This column by Noah Smith lays out the YIMBY case, while trying to be sympathetic to NIMBY concerns. As he concludes, "the YIMBY viewpoint has the weight of evidence and theory on its side." The outrageous cost of housing in the Bay Area, which imposes very real hardships on the poorest members of our community, is in this view largely a product of supply not being allowed to respond adequately to demand.

One point that could be added to the YIMBY argument is the evidence that over time market-rate housing "filters down" to lower-income renters, as argued in this recent article by Stuart Rosenthal:
While filtering has long been considered the primary mechanism by which markets supply low-income housing, direct estimates of that process have been absent. This has contributed to doubts about the viability of markets and to misplaced policy. I fill this gap by estimating a "repeat income" model using 1985-2011 panel data. Real annual filtering rates are faster for rental housing (2.5 percent) than owner-occupied (0.5 percent), vary inversely with the income elasticity of demand and house price inflation, and are sensitive to tenure transitions as homes age. For most locations, filtering is robust which lends support for housing voucher programs.
Of course, skeptical NIMBYs might claim that "filtering" smacks of "trickle-down," a theory of income distribution that seems to have been pretty well refuted by the evidence. But there is a big theoretical difference between the impact of increasing supply of housing at the top and the impact of transferring income to the top. Not to mention the weight of the evidence. Build baby build!

No comments:

Post a Comment