Noah Smith wonders if he can make a supply-and-demand argument to people who are allergic to "supply and demand" with a spoonful of sugar. He has three types of housing: newly-built yuppie fishtanks, old housing that can switch between working-class and yuppie, and newly-built "affordable housing" unattractive to yuppies: Noah Smith: YIMBYism explained without "supply and demand": "YIMBYism is the idea that cities need to build more housing in order to relieve upward pressure on rents...
...In Northern California, where I live, YIMBYs tend to get into fights with progressives about market-rate housing. YIMBYs don't want to build only market-rate housing, but they think market-rate housing has to be an important component. NorCal progressives, in contrast, tend to think that market-rate housing is bad-either they think it lures more high-earners into a city and pushes up rents (induced demand), or they object to private housing developers making profits, or market-rate housing just sounds like cities catering to the needs of richer residents instead of poorer ones. Instead, the progressives tend to support what they call "affordable housing"-either public housing, government-subsidized housing, or privately-subsidized housing mandated by inclusionary zoning.... I think it's very important to build market-rate housing. And though the forces of supply and demand are probably at work, I don't think the supply-and-demand model captures exactly why market-rate housing is important. So in this post, I want to try to explain the YIMBY position without invoking supply and demand....
...Tech businesses have ever more of an incentive to cluster together in cities.... [If] tech workers... are going to work in the city, these tech workers are going to want to live in the city. Where will they live? Some will move into shiny new glass-and-steel apartment complexes downtown: Looks kind of like a fishtank, doesn't it? A beautiful fishtank for yuppies. But these beautiful giant yuppie fishtanks have limited space. So some of the incoming techies will go looking for apartments in other parts of town-neighborhoods occupied by long-time residents.... The incoming techies have lots of money to spend, and landlords-the people who own the units where the long-time working-class residents live - know this. Therefore, they have an incentive to raise the rent, which usually means the working-class residents have to move and the techies will occupy the nice old Victorian apartments pictured above.... The result: Displacement, gentrification, and an increasing rent burden on everyone not protected by rent control.
The YIMBY solution to the problem described above is simple: Build more of the pretty glass fishtanks to catch the incoming yuppies as they arrive. Most of the yuppies would probably rather live in the fishtanks. The fishtanks tend to be located downtown, near to where the yuppies work (SoMa, Embarcadero, etc.), rather than in the older residential neighborhoods. Additionally, the fishtanks are pretty and modern and new, with gyms and common space and other stuff yuppies like. Probably more attractive for the average yuppie than an aging Victorian far out in the Mission or Haight with no built-in community or on-site services.... Long-time working-class residents and struggling artists and disadvantaged minority families are highly unlikely to go live in a yuppie fishtank. That means that every unit of yuppie fishtank housing-i.e., new market-rate housing-that you build will either A) be occupied by a yuppie, or B) sit empty on the market. Landlords want to fill all of their units, so if there are too many fishtanks and (B) happens, they'll drop the rent until more yuppies move in.... If the new fishtank units catch the incoming yuppies and prevent them from invading long-time residential working-class neighborhoods, that's good!...
So the YIMBY solution to the yuppie invasion isn't - or shouldn't be - just to build market-rate housing anywhere and everywhere. It's more like the following: A) Build market-rate housing that appeals specifically to yuppies, clustered in specific neighborhoods away from long-time working-class residential areas. B) Instead of tearing down existing housing to build market-rate housing, replace parking lots and warehouses and other inefficient commercial space with new market-rate housing. In other words, YIMBYism is about yuppie diversion. It uses market-rate housing to catch and divert yuppies before they can ever invade normal folks' neighborhoods....
Affordable housing... is popular among progressives, and is often put forward as an alternative to market-rate housing. Although YIMBYs believe affordable housing is good... they also believe it's not a very good solution to the yuppie invasion described above. Why? Because affordable housing accommodates gentrification instead of preventing gentrification. Suppose you're a long-time working-class resident who gets displaced by rising rents. Now the government offers you affordable housing somewhere else in the city. Well, at least you still have a place to live, and at least you're still in the city you've always lived in, right? But you have to move out of your home, which is expensive and emotionally draining. And you probably have to move to a new neighborhood, where your local ties will be weaker. In other words, it would have been better if you never had to move at all...
#shouldread
