A wealth of research is available showing that NIMBY homeowners restrict housing development, either at the ballot box or their local zoning board meeting, for their financial gain. That’s what rent-seeking is all about: the pursuit of profit through politics.
Even so, there are a great many well-meaning anti-development types who oppose varying types of development out of misplaced concern for the poor they’re trying to help. Writing for National Review, Kevin Williamson discusses the faulty thinking of these do-gooders who do harm using his former home of Dallas, Texas as a case study:
Back houses [accessory dwelling units, or ADUs] have long been a go-to source of cheap housing in college towns and other places with substantial itinerant populations of temporarily penniless young people. I lived in one down the street from Texas Tech University — the neighborhood was affectionately known as the “Tech Ghetto” — for the very reasonable rate of $185 a month. These are not places to raise families — many of them are not even places where a 20-year-old wants to live for more than a few months or a year. They are the residential equivalent of the thousand-dollar car and the minimum-wage job: not generally anybody’s Plan A.
Dallas, which I will take as a case study, prohibited the building and rental of these residences in the 1970s on the theory that this would help to improve the living conditions on the south side of town, which was at the time disproportionately poor and black. That is the political mind at work in its purest form: “Man, these poor people sure do live in crappy houses. I feel bad about that. Also, poor people are kind of gross, and they cause all sorts of problems that my people have to address. I have a great idea! Let’s prohibit the kind of houses that poor people live in, and then they’ll have no choice but to move into really nice ones!” You see approximately the same kind of thinking in the plans of urban-development gurus trying to figure out how we can replace every McDonald’s with a Whole Foods.
The thing about poor people is, they don’t have any money.
The article is polemical, but Williamson’s outrage is well directed. Prices went up in Dallas, and many low-income residents were driven out of once cheap neighborhoods as a result.
The idea that self-interested economic actors pursuing their own ends can produce good outcomes is tough to swallow for many (other research finds that voters are more amenable to development when it is “low-income” housing and less so when they know that developers will profit), but that doesn’t make it any less true. When well-meaning voters find ADUs or other non-“Plan A” housing options unacceptable for the poor, this makes it impossible for self-interested developers to provide low-cost options to those living on a tight budget.
There are plenty of ways to help the poor that fit well within the free-market system, but restricting development because something isn’t “good enough” for those who desperately need help isn’t one of them.
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