I think about this during science fiction movies that show amazing future cities. How do you think we are going to get there? On the other hand, maybe because 2025 doesn't look like what people thought it would in the 60s, people don't get excited about the future?
YIMBYism is ineffective because its goals are myopic, uncompromising, and undemocratic.
In order to solve the housing shortage; construction market inefficiencies, we have to look at the root causes of the inefficiencies that were seeded from 1909-1945.
Nearly all the problems we have in housing construction we have today can be traced to that period.
Market distorting regulations and increasingly inefficient taxation have raised construction costs 5-12x on an inflation-adjusted basis, across the OECD. All while productivity revolutionizing technology like nail guns and dry wall should have brought construction costs down. We’ve been hiding these price distortions and market inefficiencies by increasing credit access for over 80 years. We’ve hit the limit and our population pyramid has the stability of a house of cards as a result.
YIMBYs very much recognize that you can't use demand-side stuff like homebuyer assistance or the proposed 50-year mortgage to fix the underlying supply/cost issue. But I agree that there should be more communication between housing advocates and actual builders and developers. Though there is already some overlap. There are definitely folks in the YIMBY movement who understand some of the more subtle and arcane problems with housing.
Builders and developers have actually benefitted more from the over regulation and taxation than people think. The more complexity there is in construction, the less competition.
Developers work like movie studios, packaging up development projects in captured markets. Every tax is a through cost. Leverage is safe because competition is limited and thus returns can be quite high.
Cutting regulations is a position held by the construction industry, to be sure. But mostly they advocate for policy changes that reduce time (capital cost) and risk (regulatory stability). A truly free market would disrupt their regulatory moat and greatly increase competition.
In my experience, YIMBYs aren’t interested in deregulation beyond zoning as it is seen as “unsafe” or anti-climate, despite there being superior alternatives to complex regulatory regimes (such as insurance-drafted and underwritten standards).
But all this is moot. WFH and AI will inevitably begin to reverse urbanization as today’s office vacancy rates suggest. Property taxes will rise as land values will decrease. Cities will have problems but in most cases jt won’t be housing shortages.
The era of the semi-rural enclave has already begun.
My experience is that a lot of the builder/developer/real estate folks involved in housing advocacy are doing small jobs/own small firms. This is one of the points of missing middle housing: it creates an opportunity for smaller, more local builders to do housing, and it makes the rules more legible for firms that can't game or wait out the discretionary approval process/applying rezonings/etc. I see this point made a lot, about opening up competition by simplifying the rules.
Zoning is what most people talk about but there is some other stuff, like getting rid of parking minimums, and even building code stuff like single stair reform.
What other kinds of deregulation that you see YIMBYs resisting are you thinking of?
Ah yes, the missing middle. Parisian walkups for all! (It does sound nice!) I want permissive building, too. But unfortunately missing middle advocacy, which is about to enter its 16th year, will continue to fail because you cannot simply strip the rights from urban land owners. That’s not democratic or fair. What we could do is restore the land rights of all land owners in an equal fashion. Unfortunately the Missing middle advocates have been staunchly anti-single family home and anti-non-density-driven expansion. Essentially:
If “upzoning” is localized to single family zoned areas, it’s a loss of rights. But uniform de-zoning would not be undemocratic or unfair. It wouldn’t punish single family home owners—they could sell their single family home and build a different one, with few hurdles, not so far away. That’s what the missing middle people alway miss, that people in democracies don’t want to be forced into one kind of housing.
As for regs, most YIMBY faithful haven’t actually read building codes or understand them so they assume most most things contained within them are necessary and good, except for the egresses and parking minimums and size requirements. But building codes rarely, if ever, go through cost-benefit analysis. We truly don’t know how much codes add to the cost of building.
When it comes to Single Family Homes and Duplexes, most government-enforced building codes are unnecessary and have destroyed the greatest advantage of single family homes: that the SFH owner can easily add value and increase their standard of living over time by making improvements via sweat equity. It’s hard to do that if your builder needs a certificate of occupancy with everything from the paint and cabinets ready to go.
If instead of saying “builders must apply all of these thousands of building codes” we were to say, “Here are the obligations of your structure: it cannot harm occupants, harm neighbors, or cause damage to surrounding private and public property for a period of XX years (10 year minimum for SFH). You must have insurance in excess of XX millions of dollars for the duration of that period registered with the city. Any violation of the obligations will result the removal of the building at you and your insurer’s expense. You will be criminally liable for any personal injury. If your insurance lapses for a period of XX days the city has the right to foreclose.”
This system would allow the insurer to determine what building standards should be met, with profit incentives to neither over regulate (limiting market capture) or under regulate (increasing financial risk). A competitive insurance market would move much faster than government monopoly building departments and allow for a great deal more creativity in the use of materials and designs.
Some insurance companies might opt to hire their own electricians as that’s one of the greatest fire hazards.
I am generally resistant to most trades licensing, particularly the annual licenses required by some regions needed to allow commercial electricians to work in residential.
I truly appreciate the balance in your writing on these topics. I would add two things:
First, building is fun!
Second (and this is what some YIMBYs miss) as we build "stuff," we need to also be building community.
Yes. Thank you!
I think about this during science fiction movies that show amazing future cities. How do you think we are going to get there? On the other hand, maybe because 2025 doesn't look like what people thought it would in the 60s, people don't get excited about the future?
YIMBYism is ineffective because its goals are myopic, uncompromising, and undemocratic.
In order to solve the housing shortage; construction market inefficiencies, we have to look at the root causes of the inefficiencies that were seeded from 1909-1945.
Nearly all the problems we have in housing construction we have today can be traced to that period.
Market distorting regulations and increasingly inefficient taxation have raised construction costs 5-12x on an inflation-adjusted basis, across the OECD. All while productivity revolutionizing technology like nail guns and dry wall should have brought construction costs down. We’ve been hiding these price distortions and market inefficiencies by increasing credit access for over 80 years. We’ve hit the limit and our population pyramid has the stability of a house of cards as a result.
YIMBYs very much recognize that you can't use demand-side stuff like homebuyer assistance or the proposed 50-year mortgage to fix the underlying supply/cost issue. But I agree that there should be more communication between housing advocates and actual builders and developers. Though there is already some overlap. There are definitely folks in the YIMBY movement who understand some of the more subtle and arcane problems with housing.
Builders and developers have actually benefitted more from the over regulation and taxation than people think. The more complexity there is in construction, the less competition.
Developers work like movie studios, packaging up development projects in captured markets. Every tax is a through cost. Leverage is safe because competition is limited and thus returns can be quite high.
Cutting regulations is a position held by the construction industry, to be sure. But mostly they advocate for policy changes that reduce time (capital cost) and risk (regulatory stability). A truly free market would disrupt their regulatory moat and greatly increase competition.
In my experience, YIMBYs aren’t interested in deregulation beyond zoning as it is seen as “unsafe” or anti-climate, despite there being superior alternatives to complex regulatory regimes (such as insurance-drafted and underwritten standards).
But all this is moot. WFH and AI will inevitably begin to reverse urbanization as today’s office vacancy rates suggest. Property taxes will rise as land values will decrease. Cities will have problems but in most cases jt won’t be housing shortages.
The era of the semi-rural enclave has already begun.
My experience is that a lot of the builder/developer/real estate folks involved in housing advocacy are doing small jobs/own small firms. This is one of the points of missing middle housing: it creates an opportunity for smaller, more local builders to do housing, and it makes the rules more legible for firms that can't game or wait out the discretionary approval process/applying rezonings/etc. I see this point made a lot, about opening up competition by simplifying the rules.
Zoning is what most people talk about but there is some other stuff, like getting rid of parking minimums, and even building code stuff like single stair reform.
What other kinds of deregulation that you see YIMBYs resisting are you thinking of?
Ah yes, the missing middle. Parisian walkups for all! (It does sound nice!) I want permissive building, too. But unfortunately missing middle advocacy, which is about to enter its 16th year, will continue to fail because you cannot simply strip the rights from urban land owners. That’s not democratic or fair. What we could do is restore the land rights of all land owners in an equal fashion. Unfortunately the Missing middle advocates have been staunchly anti-single family home and anti-non-density-driven expansion. Essentially:
If “upzoning” is localized to single family zoned areas, it’s a loss of rights. But uniform de-zoning would not be undemocratic or unfair. It wouldn’t punish single family home owners—they could sell their single family home and build a different one, with few hurdles, not so far away. That’s what the missing middle people alway miss, that people in democracies don’t want to be forced into one kind of housing.
As for regs, most YIMBY faithful haven’t actually read building codes or understand them so they assume most most things contained within them are necessary and good, except for the egresses and parking minimums and size requirements. But building codes rarely, if ever, go through cost-benefit analysis. We truly don’t know how much codes add to the cost of building.
When it comes to Single Family Homes and Duplexes, most government-enforced building codes are unnecessary and have destroyed the greatest advantage of single family homes: that the SFH owner can easily add value and increase their standard of living over time by making improvements via sweat equity. It’s hard to do that if your builder needs a certificate of occupancy with everything from the paint and cabinets ready to go.
If instead of saying “builders must apply all of these thousands of building codes” we were to say, “Here are the obligations of your structure: it cannot harm occupants, harm neighbors, or cause damage to surrounding private and public property for a period of XX years (10 year minimum for SFH). You must have insurance in excess of XX millions of dollars for the duration of that period registered with the city. Any violation of the obligations will result the removal of the building at you and your insurer’s expense. You will be criminally liable for any personal injury. If your insurance lapses for a period of XX days the city has the right to foreclose.”
This system would allow the insurer to determine what building standards should be met, with profit incentives to neither over regulate (limiting market capture) or under regulate (increasing financial risk). A competitive insurance market would move much faster than government monopoly building departments and allow for a great deal more creativity in the use of materials and designs.
Some insurance companies might opt to hire their own electricians as that’s one of the greatest fire hazards.
I am generally resistant to most trades licensing, particularly the annual licenses required by some regions needed to allow commercial electricians to work in residential.