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Comment by bhickey | Hacker News Reader

We're talking about this a lot in Cambridge and I'm hoping to put together an analogous map for us. For example, here's a map of parcels where the floor-area-ratio exceeds 0.75: http://i.imgur.com/D9m9Gx2.jpg

Most of our residential zones are currently zoned with a 0.5 or 0.6 cap.

The local NIMBY group has been petitioning the zoning board for more restrictions: downzone an entire neighborhood, add setbacks and more area restrictions along the main thoroughfare. Meanwhile, everyone who isn't affluent or in subsidized housing is getting pushed out to the surrounding towns.

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The only thing I wish on NIMBYs is for them to spend a decade in a Soviet queue for apartments.

This shortage is man-made.

Everyone is a NIMBY in their own way, it's just a difference of how much annoyance you are willing to tolerate. Most people wouldn't want a noisy factory or a smelly dairy next door, for example, but those things have to be somewhere.

Now imagine you spent a lot of money to get a house with a nice view. Suddenly Larry Ellison decides to build a skyscraper next door, which blocks the sun on your property every day. You can't even grow flowers anymore because there's not enough sun. Some of your trees die. Are you happy?

Now imagine you spent a lot of money for your house. A housing company proposes changes to the neighborhood that will reduce the value of your house by 20%. In other words, you will be working and paying for years on a portion of your house that no longer has value. Are you happy? Well, maybe you can handle it because you're rich.

So these are the kinds of things that go through the minds of NIMBYs.

> Everyone is a NIMBY in their own way

It certainly seems that many people want to be the last person to move into their neighborhood/area.

> Are you happy? Well, maybe you can handle it because you're rich.

I'm happy, because for me housing is consumption, not an investment.

I think it would mean that either you rent (but someone else is still an owner and has to deal with the situation) or you don't care much about the property value (which means, in other words, you are rich).

> which means, in other words, you are rich

Or it means I'm not planning to sell for a very very long time and thus appreciate the tax break a lower appraisal gives me. The same logic applies if I am a landlord--as long as the rent and thus cash flow stays the same, I don't particularly care about what some appraiser says the property is worth.

Anyways, it seems to me that restrictions on construction are a lazy owner's way to maintain property values. After all, there is no better way to add value to and capture the revenue from my house than to add another 2 stories to it and rent it out. I do own the land underneath it, after all.

Funny you mention Ellison. That's pretty much what he's doing on Lānaʻi, though less the giant skyscraper and more the idea of remaking the island for his own purposes.

Yeah, it (more or less) happened to him actually: http://www.wsj.com/articles/SB100014240527023036548045763437...

How strange is it to be Larry Ellison? Actually, all parties in that dispute are weird. Dude expects the world to freeze around him (who knew that redwoods would grow), so he offers to double the landowner's investment, giving them an $8 million dollar profit...and they don't accept.

Know what I'd do with $8 million dollars in real estate profit? Retire immediately.

> so he offers to double the landowner's investment, giving them an $8 million dollar profit...and they don't accept.

Being able to tell Larry Ellison to &#%@ off? Some things are priceless.

"You know, I don't do things like that. I'm a public figure."

Jesus what a self-important thing to say while not outright denying it.

That's not NIMBY. In that case, my right of light is violated by a neighbor.

We must pass a noble law...

>Now imagine you spent a lot of money to get a house with a nice view. Suddenly Larry Ellison decides to build a skyscraper next door, which blocks the sun on your property every day. You can't even grow flowers anymore because there's not enough sun. Some of your trees die. Are you happy?

I have trees now!? Flowers? Luxury! My current apartment doesn't get enough sun to grow plants that need sun. And we pay $2200/month for a two-bedroom apartment here.

Wow $2200 for a 2 bed? Luxury! That's how much you'll pay for a studio here in Mission, SF... if you're lucky. (and I wish this were a Four Yorkshiremen reference[1]. No!)

[1] https://www.youtube.com/watch?v=Xe1a1wHxTyo

You're arguing the hypothetical...

No, I'm pointing out that the hypotheticals used to make NIMBY sound sensible apply very, very rarely, and also presume that the supposed beneficiaries of NIMBY have a higher initial, pre-urban-density standard of living than we actually do.

So you live next to a noisy factory and a smelly dairy farm too?

I think you need to read the third paragraph, which is the more common case (although the other two paragraphs were based on real-life experience, too).

Housing is supposed to be a durable good, not an investment asset.

I own because I want to live where I am, but I might eventually want to move. If someone builds something that lowers my home's value by 25%, then that's a good chunk of change that I won't be able to repay on the loan if I were to want to sell. I didn't buy because it's an investment, but it acts like one anyhow, whether I like it or not. I'd prefer it if someone else's actions don't essentially shackle me to where I am.

Have a look at "Why are there NIMBYs?"

https://news.ycombinator.com/item?id=11919667

TL;DR: it's because home equity is used as a savings account, and it's the primary or sometimes only means whereby most members of the middle class can accumulate significant savings.

Therefore any land use changes that might negatively impact home values threaten peoples' savings, and alternately any land use changes that positive impact home values can be profitable to existing homeowners.

It's a very simple, deeply perverse incentive structure. It's in the best interests of those who own homes to lock people out of homeownership.

Realistically, in areas where housing cost and shit is a big problem, prices will always go up even if you build a skyscraper in my backyard.

My personal issue and why we've fought against some developments in the past, is because city noise/animal/traffic/blah blah rules are just not being enforced. At all. So if I ever want to be able to sleep (not sleep in. Just sleep at all...like at 4 in the morning or whatever), I had to buy a place that was totally overpriced, and in a totally sub-optimal location, just so I'd have tolerable neighbors.

Then someone decided to build a rental-only land-locked high rise where the only possible access point is through my development's parking lot. And said high rise, even though it is in my backyard, is technically in a different city, so when there's neighbor issues, it gets really complicated.

If it was in my Canadian hometown, it honestly wouldn't matter: some asshole decides to throw a party at 3 in the morning or play hockey in my yard, I call the cops on them, 10 minutes later problem is over. Here? They'll just laugh at me and tell me to grow a thicker skin.

So the only thing I -can- do is prevent it from happening in the first place. If it was like in other countries I lived? Knock yourself out, build away!

> It's in the best interests of those who own homes to lock people out of homeownership.

This is only true in the absence of periodic appraisals to recalculate property taxes. In states where that is the norm, homeowners are incentivized to allow other homeowners to prevent their properties from appreciating, so long as they're not planning to sell in the immediate future. This has its own drawbacks (mostly longtime, fixed-income homeowners who are forced out due to onerous property taxes), but it's a much healthier dynamic than what states like California, where property taxes are capped, have.

Property tax caps can be a good thing in inexpensive areas. Indianapolis instituted a property tax cap almost a decade ago when some unscrupulous politicians used the appraisal office to gain tax revenue by artificially raising everyone's valuation. I suppose the same thing could happen in California, but at least you have the potential to sell your house for a profit there.

The solution to that problem is to vote out said politicians, not impose a property tax cap.

Ideally, a land tax would tax away all land rent (but none of the capital income from the house on top).

If well designed, one can't take more than 100%.

Land taxes are even better for this. No need to penalize people for (housing) owning capital on top of the land.

It appears that you are getting down voted. I can only assume its because people don't like taxes, of any type, in general or that they don't understand what you mean by land taxes. Perhaps if you elaborated on land taxes then people would understand that "property" taxes should be determined by the value of the land being occupied and not include the value of what it is being used for (the tax amount shouldn't be more if its a 10 story high rise vs. a parking lot). Land is a fixed asset. If someone owned an entire block in San Francisco that was just surface parking they should pay the same amount of [land] tax as the owner of the lot across the street that has a multi-million dollar high rise housing complex. The nuances of various land tax plans can be interesting. One being that EVERYONE (human) that lives in a city/state/country gets an allowance based on the amount of land in that city/state/country divided by the number of people living in that city/state/country (and even perhaps multiplied by days living/residing divided by 365).

Yes, you could use the proceeds of a land tax to eg pay for a universal basic income.

You can also use some proceeds to pay for infrastructure development (of any kind). If done well, then the additional infrastructure will raise land values enough to pay for itself in higher taxes.

See https://en.wikipedia.org/wiki/Henry_George_theorem

The big insight I see is that it's not only expected values, but unhedged variance that make people NIMBYs.

Hmmmmmm... As someone with family in Boston and who plans to return there, I really want a some way to invest 20% of my IRA contributions in the Boston housing market until I can actually afford to buy a house there and move back.

I wonder if I can help someone else hedge against the market going down.

Slightly related, they have housing cooperative in Germany, especially the East. You can own a share, and get much reduced rent in return, in any of the cooperatives apartments and houses in the city. Depending on how well they do, they might also pay a dividend, but mostly the owners of the cooperative are also the renters, so generally they rather keep the rent down than make a profit.

I know old people who `paid' for their shares by working on building sites for these very houses in the 50s and 60s.

See http://www.wohnungsbaugenossenschaften.de/genossenschaften/h... and https://en.wikipedia.org/wiki/Housing_cooperative#Germany

As someone looking to get into one, it's quite difficult and can take years for them to offer you a decent place (which will have crazy competition).

Yeah, they are not exactly market based--ie they don't just increase prices and acquire more units.

This paper is an order of magnitude more interesting than the topic article. Thanks!

Thanks for appreciating it.

I do like it, too. However, my policy recommendation differs from the author: use a land tax to cut down land valuations.

One goal is of course to allow substituting capital for land (ie higher houses) to make housing cheaper. There's a reinforcing cycle: less NIMBYs, leads less restriction on that substitution, leads to less NIMBYs as per the paper.

One way to look at the problem is that something thought to handle externalities creates a bigger externality itself.

If zoning laws could be priced somehow so that when they become a cost they had to change or reduce it might help.

Zoning laws in places without expensive real estate like, say, much of the US midwest probably makes things better for people. In SF or in this example in MA and other really popular places they make things worse.

Perhaps some economist has tried to calculate the price of NIMBY, zoning law externalities. Anyone know of someone who has tried?

I really doubt that zoning laws improve quality of life for people in your average randomly selected town. Zoning laws give us things like parking requirements which drive down density and force everyone to drive. Then there's frontage requirements, setbacks, bans on multifamily and commercial construction.

One way we could price zoning laws is through their impact on buildable space. As long as we raise taxes on the beneficiaries, everything'll come out in the wash, right?

>I really doubt that zoning laws improve quality of life for people in your average randomly selected town. Zoning laws give us things like parking requirements which drive down density and force everyone to drive.

If you do drive, though, you are not going to appreciate new development which makes it impossible to park when you get home from work.

Not everyone hates living in places where people drive.

If people want a guaranteed place to park, they should build a parking space on their own property. There is no reason that public space should be given away to people for the purpose of parking.

No reason except existing buildings don't necessarily have parking or room for it.

I don't have a problem with people who live in a place determining what the public space there should be dedicated to.

The issue is when there is some limited quantity of shared parking and some choose to free-ride on that shared space rather than dedicating parking on their own property.

That wouldn't be a problem if one of those developments is a 20-story parking garage.

I have a handful of friends who left Russia in the early 90s and the pictures they paint of the USSR are highly unflattering in this regard. One, the daughter of Lenin Prize winner, grew up in a cramped two bedroom apartment. My guess is that things were much worse down the social totem pole.

Things have, for better or worse, changed pretty dramatically, at least from my experiences. I've been in Russia with my partner for about 3 years now, and we've lived in St. Petersburg, Moscow, and for a brief time, in Pereslavl.

While the apartments aren't huge by comparison to most houses in the US, they are pretty comfortable, though the quality will vary depending on the particular building and region you live in. Most of the buildings appear to be the same that were built during the USSR, it's just the internals were remodeled with more modern amenities.

It can take a little getting used to, living in somewhat cramped quarters, but for me anyways, I've always had fairly small places to live growing up, whether it was living in a 3 bedroom with 6 people in college, my cheapo first apartment, I guess it's more just something you get used to. Even now, my partner and I live with her mom/aunt in a 3 bedroom apartment in SPB and, aside from occasionally stumbling across each other in the kitchen and funny battles for the bathroom, we get by just fine.

   funny battles for the bathroom

Not so funny as soon as you have children.

heh, meant it sarcastically. Both where I live now and growing up, I've been in situations where it's 1 bathroom for 5 and 4 people respectively, and a queue forming in your own home for the toilet just gets silly, even if it's frustrating.

Well, part of the Communist marketing brand is that everyone equally gets a cramped two bedroom apartment, so it'd be useful to get hard evidence one way or another.

From what I've read about Soviet housing in the Krushchev era, though, you were very lucky if you got a cramped two bedroom. Not sure about the 70s and 80s.

The Communist marketing brand is that everyone would eventually get an apartment. Once communism is achieved, that is.

That sounds more like capitalism, which says that you might someday earn a one-bedroom condo, if you're innovative enough to start a company and get a good exit.

Marketing isn't very creative..

Christianity and some other religions also promise some utopia in the future.

No, capitalism is realizing that Zillow.com can find you a host of cheap properties in minutes, and HomeDepot.com or Tumbleweed.com can put a house on it cheap. ...while you start a company.

You're dodging my actual point, which the other replier definitely understood.

Once Upon a Time, we Westerners looked at Communism and laughed. We justified our system (democracy for the state, capitalism for the economy) by pointing out all the obvious material benefits we reaped from it:

* High economic growth

* Cheap, varied, available, high-quality consumer goods

* High and climbing wages

* A class structure that looked more like a Gaussian curve than an exponential distribution, with greater actually-existing, de-facto equality than the Communist countries

* Workers' rights and the free formation of unions

* Public infrastructure, parks, and transit

* Cheap, acceptable housing for families, leading to widespread owner-occupancy becoming the norm, something rarely seen in civilized human history

* Ever-climbing life expectancies at birth, thanks to rigorous public health, sanitation, and disease control measures

In contrast, the Eastern Bloc promised that Real Soon Now, actually-existing socialism would be transformed into Full Communism, and people could have nice things. All they had to do was make a few sacrifices today to defeat the fascist capitalists and experience great rewards tomorrow!

They promised "jam tomorrow" (https://en.wikipedia.org/wiki/Jam_tomorrow), but we had jam today.

Whereas nowadays, the spectrum of jam-promises has shifted. Nowadays, the capitalist West promises its people, "Jam tomorrow, for the deserving", while most of the Second and Third World have switched to promising, "Jam never, it was always a lie meant to lead you away from God and Putin."

We can still kinda say we've got the cheap, widespread consumer goods, but not so much the rest of it.

Remember https://en.wikipedia.org/wiki/We_will_bury_you and Sputnik?

Communism seemed to have higher growth rates for a while.

In the actual apartment isn't so hot either. I've stayed in my wife's childhood home a couple of times, and it's like two concrete shipping-container-sized boxes set side by side, with a tenth story balcony.

My sister lived in Cambridge for awhile. What a shitshow.

They wanted to add a second floor to their home, which would have basically made it look like the rest of the block.

Some neighbor raised a stink, because they had built a potting shed on my sisters land, and the shadow of the higher roof would damage the plants in the shed!

Wasn't it your sister's shed then?

5 feet of it was :)

The city made it clear that they didn't give a hoot about it. So she would have to litigate.

Fortunately, the market is insane and they sold the place sight unseen to some Chinese dude for a significant profit.

> Fortunately, the market is insane and they sold the place sight unseen to some Chinese dude for a significant profit.

That's one of the larger issues with the housing market: it's seen as an investment tool by foreigners (especially in hot markets where prices are rising like crazy), so you end up with tons of real estate that's not on the market but also not being used to actually house anyone.

Sounds like a two-tier property tax with a higher tier for unoccupied housing would be a solution.

Depends on how long it was there. Adverse possession takes 20 years in Massachusetts.

There are many requirements other than simple time to successfully adverse possess property, such as the possession being open and notorious. Also, adverse possession as such applies only to real property; analogous concepts may exist with respect to personal property depending on the jurisdiction.

In an upper-middle class leafy neighbourhood in my hometown of Melbourne, there's a retirement home run by a charity, for people with special needs. They wanted to expand to double capacity, and the complaints came rolling in. The usual to be expected "The expansion is ugly, and will bring down the tone of the neighbourhood" (read: lower house prices with more homeless retirees around), with the best being "The expansion will need to cut down a beautiful 100-year-old tree"

Getting services for underprivileged people in a wealthy neighbourhood was always going to be tough, but the kicker for me was this - the residents against the expansion were clear to state "We're not NIMBYs!". Really? What kind of things do you think NIMBYs complain about, if not exactly what you've just said?

Seriously. I manage a building in Cambridge and get notifications about zoning changes all the time. And definitely can't afford to live there any more.

The city council is currently considering an expansion of inclusionary zoning. The gist is that 20% of new apartments in buildings with six or more units will be reserved for people earning between 50-80% of median income. Put concretely, a school teacher with a stay at home spouse and two kids would be ineligible for one of these units.

Since there's no concomitant increase in density, we should see two things:

1. Overall construction should decrease relative to where it would have been. Projects that were previously viable are now underwater. Even worse, if the cap rate fluctuates entire classes of projects become nonviable.

2. Market rate housing will become more expensive at a faster rate. The market is clearing at levels that people at 50% median income can't afford, so setting aside units strictly reduces the market rate supply without any demand reduction.

The Terner Center at Berkeley has an interesting policy tool that simulates the impact of various policy choices: http://ternercenter2.berkeley.edu/examplecities/index.html

>The gist is that 20% of new apartments in buildings with six or more units will be reserved for people earning between 50-80% of median income. Put concretely, a school teacher with a stay at home spouse and two kids would be ineligible for one of these units.

Are these developments really as "welfare cliff"-y as they seem? As in: if your income goes up, are you kicked out of the house?

Although, most of what I've read suggests that laws which increase cost (such as affordable housing requirements) have a tiny impact relative to laws which increase development time (such as the Telegraph Hill Dwellers calling for a stay of ~everything at council meetings); the latter are far more damaging. On your tool: if you move the affordability requirement from 10% to 25% and reduce the time to approval from 6 months to 4 months, you still build more housing!

> As in: if your income goes up, are you kicked out of the house?

I went to a City Council debate where this was a big issue. Theoretically, yes.

But the city doesn't actually want to kick people out of their houses.

But there was some concern that people had already pulled some shenanigans to make their finances temporarily suck so that they could get a house in Cambridge.

Friend of mine did something similar in San Francisco. Got a low-work part time job that paid in the affordable housing range for a year or two; he had accrued a large down payment; and he managed to win the BMR lottery. Bought a place in North Beach, tripled or quadrupled his income the following year.

That makes it sound a lot more cynical than it actually was--he originally chose the badly paying job for the lifestyle it allowed him--but it's definitely an abuse of a system that doesn't even function well when it's not being abused.

I should clarify: I used the word "house" sloppily. We're talking about renting apartments here; no subsidy would get you an actual house.

Permit delays introduce huge costs. While a developer is durdling around waiting for building approval they still need to finance the damn thing. At current interest rates every month in delay should work out to something like a 0.3% increase in costs. When we're talking about developments hovering on the border of profitability, this can make or break a project.

If you think about the current incentives for the DOBs that makes sense. Their KPI is essentially number of inspections, violations, plan re-views. How quickly the permits get done is usually not on the list.

It's not uncommon in NYC to go for more then a year through a permitting process for 1 to 3 family reno. That's one of the reason there was so much illegal construction happening here in the past.

It's super loosely enforced. I even knew someone in Cambridge who was -renting out- their affordable housing unit. So you had someone who qualified at some point for a $850,000 3 bedroom in a prime Cambridge location for just a few hundred bucks a month, who just moved out and rented it out for 2500 bucks a month. They never got caught.

Someone is always paying for that 20%. Hint: it's not the builder.

Hey, my apartment is on there!

Maybe this is just the fame going to my head, but I sure would like some semblance of a yard.

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