Why encouraging more private development won’t solve the housing crisis
Michael Friedrich/March 15, 2024
https://newrepublic.com/article/179147/case-against-yimbyism-yimbytown-2024
A two-story row house converted into a five-story condo building in Washington, D.C. Sarah L. Voisin/The Washington Post/Getty Images
Sonja Trauss, the charismatic founder of the YIMBY movement, recently spoke at a conference of fellow travelers about the importance of supporting small home builders. “Most neighborhoods are still zoned low-density, and so if you’re seeing new housing, it’s going to be small projects,” she said at Austin’s YIMBYtown 2024, a gathering of people who believe that saying “yes in my backyard” to private development will fix America’s housing crisis. Trauss bemoaned the onerous regulations, fees, and paperwork—not to mention meddling homeowners—that make it so hard for small firms to build. Her organization, YIMBY Law, sues cities that create barriers to new construction. “What we’re doing, a lot of it is really for the small developers,” she said, quickly adding, “I mean, and the future residents, of course, guys.” The audience laughed.
So the YIMBY story goes: What’s good for the industry is good for the tenant. In recent years, this viewpoint has become enormously influential. Some adherents are unsurprising, like the Koch-backed Mercatus Center and industry titans like Airbnb, both of which funded the conference. But the idea is politically bipartisan. YIMBYtown featured both Julián Castro, President Obama’s secretary of housing and urban development, and Montana Governor Greg Gianforte, a Republican who appeared virtually at the conference to advocate “red-state YIMBYism.” Young, progressive-minded activists are also in on the action, and the conference held panels not just on wonky stuff like minimum lot size and parking reform but also anti-racism and ending homelessness.
The policy that unites YIMBYs—from orthodox free-marketeers to grassroots social housing boosters—is “upzoning,” in which cities reform local land-use policy to allow for more, and bigger, development. This change, YIMBYs argue, drives developers to fill cities with “abundant housing,” spurring competition and putting “downward pressure” on prices. The appeal is obvious: a “one weird trick” to solve the housing crisis—without upsetting the market.
If only it worked. A decade since the YIMBY movement launched, there’s little serious evidence that its policies are the magic supply-increasing bullet that proponents claim, nor that they meaningfully decrease rents for working families. The YIMBY agenda can’t solve the housing crisis. But there are solutions: ones that provide the homes we need without ceding power to the profiteers who rigged the system.
The housing shortage is real. Households are forming faster than developers are building new homes, and by some estimates the country is short 2.3 million units. For several decades this problem has been squeezing renters in big coastal cities like San Francisco and New York, but in recent years it has mounted into a national crisis, reaching formerly affordable bastions like Spokane, Boise, and Reno. The result is an increasingly brutal market, where the typical American tenant is rent-burdened and homelessness is on the rise.
According to YIMBYs, the big problem is exclusionary zoning policies: in short, laws that restrict the size and type of buildings in many neighborhoods, often those dominated by single-family homes. Cemented in place in the twentieth century by segregationists and maintained for decades by NIMBY—“not in my backyard”—homeowners who resist any changes that might compromise their “neighborhood character,” these rules effectively ban apartments on 75 percent of residential land. “We’ve significantly constrained the production of new housing in major cities, and increasingly in other places too,” Ned Resnikoff, the policy director at California YIMBY and a YIMBYtown speaker, told me. “The only housing that private developers have any incentive to produce is extremely expensive.”
Since around 2014, YIMBYs have been vigorously trying to loosen these and other development constraints through legislation and local activism. Whether their ideas emerged from the depths of right-wing think tanks or from the passions of Bay Area populists like Trauss is a point of some contention. What’s certain is that YIMBY policies satisfied elite consensus, promising workforce housing for tech-sector donors while scratching a deregulatory itch that libertarians had long been trying to reach.
Over the years, YIMBYs have supported “legalizing” all sorts of new homes—high-rises, “fourplexes,” backyard apartments, and, in some cases, forms of subsidized and social housing—often mouthing a social justice motivation. But they are also explicit that deregulation alone won’t help those struggling at the bottom of the market, and the movement has found itself at odds with low-income tenants of color who oppose new developments that herald gentrification. YIMBYism was always “a promise that we didn’t need to redistribute anything,” said Alexander Ferrer, a planner and researcher at Strategic Actions for a Just Economy, a Los Angeles tenant advocacy organization. “We could just make more property.”
That cities would benefit from more market-rate apartments appears true enough. Studies show that new development slows rent growth both in neighborhoods and citywide, and it’s relatively well documented that when developers build new high-end apartments, it eventually frees up more low-cost apartments, in a process that housing scholars call “filtering.”
But evidence undermines this simple story, as even the sunniest supply-side forecasts show very modest impacts. One 2019 study of New York City found that every 10 percent increase in housing stock yields a 1 percent decrease in rents nearby. For YIMBYs like Trauss and Resnikoff, such research presents important proof that, on the margins, building moves rents in the right direction. (“Adding more reduces prices,” Trauss told me, “so adding even more reduces prices more.”) But as a practical matter, marginal changes don’t add up to affordability for most. Even if developers somehow built 50 percent more housing in New York City, the median one-bedroom unit would still rent for $3,548 per month (if applying the study’s findings to today’s market). “In the best-case scenario, we’re talking about throwing a pebble in the ocean compared to the scale and scope of the need,” said Anthony Damiano, a housing researcher at the Center for Urban and Regional Affairs at the University of Minnesota.
Market-rate development can even drive prices up for renters in low-income buildings: In a 2020 paper on Minneapolis, Damiano found that new construction increased rents by 6.7 percent in lower-priced housing nearby, even while it decreased rents slightly for high-priced units. Meanwhile, the fabled “filtering” effect can take years or even decades, and it’s unclear that it reaches the people in greatest need. Such outcomes are hard to square with YIMBYs’ social justice aspirations.
And then there’s the question of how we might cajole developers into building more in the first place. YIMBYs treat it as self-evident that upzoning will largely do the trick, but the evidence is weak. “We just don’t have the wins to show that here’s a city that was overzoned, and now it’s less zoned, and here’s how it changed,” said Kevin Erdmann, a senior affiliated scholar at the Mercatus Center, author of Building from the Ground Up, and a firm believer in the power of zoning liberalization.
The one major study of land-use reforms across the United States shows that, during the three to nine years after a city enacts upzoning and other density-increasing measures, new housing supply increases by less than 1 percent. That increase occurs primarily at the high end of the market, and there’s little evidence that new supply frees up additional low-cost units or makes them cheaper. Faced with these results, Resnikoff pointed to a wish list of other needed policy changes, like permitting reforms and rule changes to cut developers’ construction costs. But needless to say, upzoning produces nowhere near the dramatic supply spike that YIMBYs promise.
At the same time, studies show that upzoning can actually increase housing prices. Cameron Murray, an Australian economist and author of The Great Housing Hijack, found that just 2 percent of land was used in the 20 years following an upzoning of Brisbane and that prices rose. “You can certainly zone for high density in areas that are high-value, and things will get developed over time in that location,” Murray said. “But prices won’t be cheaper. That’s typically not what happens.”
To support their claims, YIMBYs instead cite a few recent success stories. In the last decade, both Minneapolis and Auckland, New Zealand, enacted large-scale zoning reforms, followed by upswings in building and downswings in prices. But Erdmann has questioned the supply-side success of Minneapolis, raising alternative explanations for the change, such as the effects of the 2020 George Floyd protests and the city’s low population growth, and Murray has shown that the Auckland data was flawed, undermining claims that the city’s trends were different from those of peers whose policies remained unchanged. New construction is now crashing in Auckland, and rents are rising again, Murray said. “We’re sort of back to square one.”
Ultimately, the solution to the housing crisis is political and economic, not a matter of technocratic tweaks. Zoning reform is neither necessary nor sufficient to fix it. It’s true that exclusionary zoning rules are rooted in harmful racist policy. Abolishing them is justified. But relying on that approach to induce new housing supply, especially for the lowest-income residents, is a losing proposition. High interest rates, soaring construction costs, and developer land-hoarding present major impediments to building. Intensified corporatization and concentration of ownership make it increasingly difficult to protect vulnerable tenants from rent hikes and eviction by landlords, no matter how many towers the industry erects.
With so many people straining to pay the rent, those invested in housing justice might harness today’s tremendous pro-housing political will to demand more broadly beneficial policy. “There is, one hundred percent, a left-wing politics for building stuff, but I don’t think it can be founded in any positive orientation toward YIMBYism,” Ferrer said, noting that it makes no sense for downtrodden tenants to align with a movement so cozy with real estate and the political right wing.
A first step would be agitating to repeal the Faircloth Amendment, another artifact of twentieth-century racism, which has blocked construction of new public housing for more than two decades. From there, the federal government should reinvest public funds in building homes to rent affordably. In practice, that could mean creating a system like that of Vienna, which provides high-quality, low-cost housing to a huge portion of its citizens. Progressive organizations like California YIMBY, despite their support for a limited statewide social housing model, hold that this approach on its own would simply take too long. “If we focus exclusively on non-market solutions, I just don’t think we’re going to get the scale of housing construction we need in a reasonable time frame,” Resnikoff said. But the private market makes no guarantees, and it’s clear that governments are capable of building large public projects quickly when the incentives are right—think of the postwar public housing boom or construction for the Olympics.
In addition to building, federal and state legislators should implement rent regulations and protections for current tenants. Rent control, a variety of methods for capping rent increases, can shield working tenants from displacement without reducing housing quality or new construction. “Just-cause eviction” laws make it harder for landlords to remove tenants arbitrarily and easier for tenants to unionize. Some YIMBY organizations, to their credit, have supported versions of these measures—although most draw the line at stricter forms of rent control, citing claims that they discourage developers from building.*
“There needs to be a lot more state intervention and funding for housing, and we’re not going to get that without a political confrontation with the state,” said Shanti Singh, communications and legislative director of the California renters’ coalition Tenants Together. “One of my biggest criticisms of YIMBYs is that they’re focused on policies that don’t require that political confrontation.”
YIMBYs have prioritized other political confrontations, such as picking fights with obstructionist homeowners, anti-gentrification politicians, and low-income tenant organizers in service of supporting private developers. At YIMBYtown, Trauss urged attendees to focus on the “afflict-the-comfortable side of the project, like enjoying that the NIMBYs are mad.”
But fighting so-called NIMBYs, while perhaps satisfying, is not ultimately effective. There’s no reason on earth to believe that the same real estate actors who have been speculating on land and price-gouging tenants since time immemorial can be counted on to provide safe and stable places for working people to live. Tweaking the insane minutiae of local permitting law and design requirements might bring marginal relief to middle-earners, but it provides little assistance to the truly disadvantaged. For those who care about fixing America’s housing crisis, their energies would be better spent on the fight to provide homes as a public good, a change that would truly afflict the comfortable arrangements between politicians and real estate operators that stand in the way of lasting housing justice.
* This article has been updated.
Michael Friedrich @mfriedrichnyc
Michael Friedrich is a journalist who writes about culture and cities.