Can YIMBYs Solve America’s Affordable Housing Crisis?

01.16.22

In housing-starved California, it is not beyond the pale for residents to block new housing projects on the basis of them harming vegetables, causing “confusion for the post office,” and/or increasing cancer risk due to a wood-fired oven from a nearby restaurant. Five years ago, in a classic “Death by Delay” maneuver, one resident “show[ed] up at a Berkeley planning meeting shaking a tiny zucchini as proof of the damage done by excessive shadowing.” Her theatrics worked: the project got shelved for additional review.

Trenchant NIMBYism, combined with onerous zoning laws and runaway property appreciation, has helped create America’s biggest affordable housing crisis since the 1970s. Reforming local housing law — once the exclusive pastime of developers, city council members, and environmentalists — has become a salient political issue and the cause célèbre for younger professionals locked out of home-buying.

Sonja Trauss, a former high school math teacher turned professional activist, is the caustic hero of zoning reform and embittered Millennials. As the official founder of YIMBYism (“Yes in My Backyard”), a swelling political movement that has spread to nearly 40 cities and supports all things new housing, she gave wannabe-homeowners a loud, actionable outlet for their rage. “You have to support building, even when it’s a type of building you hate,” says Trauss. “Is it ugly? Get over yourself. Is it low-income housing? Get over yourself. Is it luxury housing? Get over yourself. We really need everything right now.” (Her group, and other YIMBY-inspired knockoffs, also attracted financial support from the likes of Jeremy Stoppelman, Facebook, and Stripe, which were tired of raising employee salaries to keep in line with the obscene housing costs of the Bay Area).

While housing affordability has long been an issue for coastal cities and renters — nearly 1 in 5 renters qualify as “rent-burdened,” spending more than half their income on housing — it has recently expanded into a broader issue affecting many cross-sections of Americans, particularly in new growth areas (Charlotte, Nashville, Phoenix, etc.) where local property values climbed by as much as 200% or 300%. Freddie Mac estimates that the nation suffers from a housing shortage of 3.8 million units, and single-family housing — the predominant form of construction allowed in most municipalities — fell in the 2010s to its lowest levels in 60 years.

“As more Americans are forced out of expensive cities, we are slowly seeing this crisis creep into the interior, as previously affordable cities develop their remaining cheap land and hit the limits of what zoning will allow,” writes city planner Nolan Gray in his new release, Arbitrary Lines. “Reshuffling Americans into what are temporarily less expensive cities at best just buys us time. Many zoning policies… from sweeping apartment prohibitions to high minimum parking requirements to permitting delays, are already on the books in most Sun Belt and Mountain West Cities. Absent fundamental reforms, the housing affordability crisis will only spread. We treat zoning as a policy backwater at our own peril.”

This week, we discuss how single-family zoning — or what YIMBYs refer to as the “Voldemort of housing regulations” — became the bedrock of American urban design patterns, incentivizing homeowners to treat their properties as investment vehicles, rather than consumption goods, and setting off a half century-long bonanza of class-based, urban sprawl that is only now facing vigorous critique and reform.

Tracing the Dead Hand of Zoning

Who started zoning, perhaps the greatest infringement of personal property rights seen since conservatorships? Once again, we can thank Berkeley. Although New York and Berkeley both introduced zoning in the same year, 1916, Berkeley distinguished itself by adding the “single-family flavor” that would come to define modern municipal zoning. Charles Henry Cheney, Berkley’s city attorney, proposed zoning as a means of segregating laundry businesses, which he blamed for attracting “negroes and Orientals.” He went still further, singling out apartments as inherently undesirable.

“Where most other early zoning ordinances defined broad residential zones, agnostic as to whether they were filled with single-family homes or apartments, Berkeley would be the first city to ban apartments in areas otherwise deemed suitable for residential use,” writes Gray. “By banning all but the most expensive form of housing — namely detached single-family homes on large lots — Berkeley thus pioneered a form of state-sanctioned residential class segregation that defines zoning to this day.”

Berkeley was not alone: civil societies, such as the Massachusetts Civil League, expressed alarm over the “triple-deckers” that were spreading “like the cholera or yellow fever.” Concerned that such construction would attract “a class of tenants who add nothing to the revenues of the town, but who, on the contrary, become the cause of increased expense in all departments,” towns such as Weston, Massachusetts banned all “tenements” and apartments.

In 1926, the constitutionality of such provisions was questioned in Euclid v. Ambler, the landmark decision that reaffirmed the legality of zoning. “Significantly, the court went further to target multifamily housing as incompatible with single-family neighborhoods, even though both uses are residential,” writes housing and development journalist Lisa Provost in Snob Zones. “The decision famously compared apartment buildings to ‘a mere parasite, constructed in order to take advantage of the open spaces and attractive surroundings created by the residential character of the district.’”

But it was the federal government, rather than local land use concerns, that ensured the predominance of single-family zoning. “Through a steady stream of carrots and sticks from the federal government, zoning finally spread to cover nearly every incorporated area of the country alongside the rapid, federally subsidized emergence of suburbia,” writes Gray. By the 1970s, most local municipalities had adopted some form of zoning as a prerequisite for receiving federal funding for “transportation infrastructure, housing subsidies, or disaster recovery.”

The result? A highly segregated, sprawling society. As one housing commentator notes, “Postwar suburbs didn’t create segregation, but they expanded it, industrialized it, and turned subdivisions like Levittown into a government-sanctioned apartheid: the mortgage guarantees that the federal government made to banks and mortgage brokers were premised on white-only neighborhoods; you could not get an FHA-backed loan in mixed-race neighborhoods.”

Today, recent research has shown that certain zoning rules continue to drive racial segregation: one study found that “simply allowing apartments on a block — rare in most zoned cities — is associated with a 5.77 percent increase in the local Hispanic population and a 3.36 percent increase in the local Black population.”

All Are Welcome Here (If You Can Afford It)

One of the great fuelers of NIMBYism is the American tradition of treating housing as an investment vehicle rather than a consumption good. New York Times journalist Conor Dougherty charts how runaway inflation in the 1970s, combined with federal policies, transformed the way homeowners think about residential real estate.

“Until about 1970, home prices never rose fast enough to outpace the stock market, and Americans still regarded houses as first and foremost a place to live,” writes Dougherty in his award-winning examination of the modern housing crisis, Golden Gates. “That started to change in the early 1970s, when the cost of homes, like the cost of everything else, spiked upward. For anyone who already owned a home … the declining buying power of their own salary was offset by the fact that they now owned an asset that was performing like a hot stock. This added a powerful financial motivation to the multiplying list of reasons to oppose nearby development. Also, unlike renters, they can deduct their mortgage interest and property taxes from their federal tax bill.”

In other words, as one modern critic puts it, “Don’t dilute my equity with new construction!” By 1977, Robert Ellickson, a law professor at the University of Southern California, characterized suburban homeowners as “a profit-making cartel.” While rising property taxes might have served to put a dent in this windfall, California soon axed that possibility with the implementation of Prop. 13 in 1978, which enshrined favorable tax treatment for early homeowners.

Instead, cities turned to sprawl. Unlike infill development (the far greener alternative), Dougherty argues that “sprawl was an easy way to build housing because sprawl displaced farms and cattle, neither of which complained about the hordes of new people, and because edge land was also much cheaper to build on than the tight spaces within cities.” The result has been a strange diaspora — atypical of historical migration patterns — in which those looking for new opportunities moved away from the most affluent cities, rather than towards them.

Many regions, particularly the Northeast, Midwest, and California, are alarmed at the sudden dearth of young talent in the area. Some states, such as Massachusetts, lost more than 5 percent of its under-forty-five population in a mere decade, losing 46,000 people alone in 2021. “A divide is emerging between areas of the country that are gaining young people, and those in which the up-and-coming generation is shrinking,” reported the Brookings Institute.

Re-Legalizing the Missing Middle Housing

Today, the many pitfalls of modern zoning practices — particularly single-family zoning and minimum parking requirements — are broadly recognized by economists, sociologists, and, increasingly, the general public, as wider swaths of the population find themselves faced with a housing deficit. “What started off as exclusion based on race, has now expanded to include class, economic status, and age,” write two Berkeley critics. “If we continue to limit the construction of apartment buildings to only one part of town, we will not meet the needs of seniors, the working class, low-income people, and young people.”

But, some warn, greater visibility is not enough. “If history is any guide, renewed attention alone is unlikely to put much of a dent in the fortress mentality,” writes Prevost. “After all, towns have vehemently defended exclusionary practices as their right for decades — if not publicly, then covertly, and sometimes illegally.”

Many cities, from Minneapolis to Fayetteville to Hartford, have launched a campaign against apartment bans, minimum lot sizes, and off-street parking requirements. Some states — which ultimately have the final say over local regulations — have tackled the issue through blanket reform, putting forth legislation to scrap minimum floor area requirements and excessive minimum lot sizes statewide. In one positive sign of change, multifamily construction increased from an 18% growth rate to a 27.5% growth rate in large metro suburban counties from Q3 2021 to Q3 2022 (large metro core counties experienced a 7.1% increase).

Daniel Parolek, Berkeley’s city architect, calls these initiatives “missing middle housing,” aka townhouses, apartment buildings, ADUs, etc., that don’t exist under most cities’ zoning codes. “The reason we created this concept was to effectively frame the conversation about this need for these housing choices,” said Parolek, “without using terminology that comes with some baggage.”

And some notable exceptions, such as Houston — America’s fourth-largest city — never had zoning to begin with. Instead, as Gray observes, the city relies on “a system of emergent land-use regulations known as deed restrictions, which empower certain communities — principally middle- and upper-class homeowners — to… [enact] the rules they crave within their little fiefdoms” without “agitating for a citywide zoning system that would do far more damage.”

Ultimately, however, demographic pressures may have the final say, as the children of NIMBYs continue to flee their own parents’ backyards. “Sweeping demographic changes … along with rising energy prices and concern about climate change, are driving a profound shift in market demand,” concludes Prevost. “The[y] suggest that the US housing market is ripe for an about-face, back from the edges of the crabgrass frontier.”

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