YIMBYs are Proving the Fatalists Wrong

A response to Steve Randy Waldman

After remaining essentially stagnant for so many decades, American land use and planning policy has, in recent years, become remarkably dynamic. This is largely thanks to the YIMBY movement, which has pushed through major land use reforms in California, Colorado, Minnesota, Texas, Montana, and Arizona — to name just a few of the more high-profile wins. These victories have yet to end the U.S. housing crisis, but they’ve brought about other changes: researchers that study YIMBY reforms have had more opportunities to gather data on what does and does not work; land use reform has exerted pressure on the politics of land use, changing the size and composition of both YIMBY and anti-YIMBY coalitions in unpredictable ways.

With so much in flux, it’s unfortunate that intra-left debates over YIMBYism remain so firmly entrenched in the past. But too many of the left’s prominent skeptics of YIMBYism insist on behaving as if the past five, six, or seven years haven’t taught us anything new about the housing problem. My issue with their argument is not that they disagree YIMBYism — I welcome intellectually bracing challenges — but that they consistently fail to push the conversation forward in any meaningful way.

I was particularly dismayed by a recent attack on the YIMBY position from Steve Randy Waldman, a writer who I admire and usually find to be a careful, rigorous thinker. Unfortunately, his “Only the state can house us” succumbs to the same traps that have ensnared far lazier interlocutors: oversimplification, disinterest in actually existing YIMBYism, and elision of key research.

What the State Should Do

Waldman’s position is that upzoning and other land use reforms can only have a marginal impact on housing costs. What’s instead needed — in fact, what he describes as “an inevitability” — is a massive social housing program that will create millions of government-owned, government-subsidized housing units across the country. Government intervention is necessary for two reasons: first, because the private market will never create low-cost housing in sufficient quantities; and second, because private developers will only reinforce geographic inequality by concentrating economic activity in what are already America’s wealthiest, most productive cities.

Some of this is close to the mark. Like Waldman, I support a program of industrial policy to reinvigorate depressed regions of the country; as Waldman observes, “[t]urning nowheres into somewheres is a role of the state.” Much as Pentagon investment created Silicon Valley, I am hopeful that the Inflation Reduction Act strategy can turn some hollowed-out, post-industrial cities into green economy hubs.

I also agree that the U.S. government should invest more in housing development and housing subsidies. The main reason why it should do this is because we’re in a housing emergency that requires action on the part of both private and public actors. But even in the absence of such an emergency — even, that is to say, if we did not have a severe housing shortage — we would still want the government to strategically subsidize rents and housing production. Countercyclical government investment in housing development can prevent us from dipping below production targets during economic downturns. And government subsidies targeted at the extremely low-income population can help end the homelessness epidemic and support people who would not be able to afford even very inexpensive housing.

While some YIMBYs might disagree with the above, these are not fringe positions in the movement. YIMBY organizations have fought for and won public investments in housing around the country. The broader abundance movement has taken a great interest in industrial policy. And the organization I work for recently released a policy framework that urges California to create a social housing developer and increase other housing development subsidies. (I oversaw the drafting of this framework.)

Support for government investment is not a new development in YIMBYville, and it’s certainly not something we’ve tried to keep secret. But instead of celebrating the left-YIMBY enthusiasm for social housing, Waldman simply ignores it. To him, all YIMBYs are market fundamentalists, actually-existing YIMBY campaigns and legislation notwithstanding. Or as he puts it: “Their error has always been a pollyanna-ish idea that if only we would lift legal constraints we can easily understand to be unjust — exclusionary zoning whose roots are in racial segregation! — private markets would just resolve this problem and we would all be okay.”

That would indeed be pollyanna-ish, which is why almost no actually existing YIMBYs believe it. Instead, the general consensus among pro-housing types is that eliminating restrictive zoning and other barriers to development is a necessary but not sufficient precondition for ending the housing crisis. In my own view, letting private actors build much of the housing we need is an expedient more than anything else: there is nothing inherently virtuous about either market forces or public investment, so we should deploy each where it will do the most good with the fewest social or political tradeoffs. But that’s a harder position to attack from the left than “markets good, government bad.”

So why not rely on private actors to build at least some of the housing we need? To Waldman’s credit, he does not pretend that the housing shortage is a mirage. Instead, his anti-YIMBY argument relies on three futility theses. Thesis 1: YIMBY land use reforms will never happen. Thesis 2: Even if they do, developers won’t take advantage of them. Thesis 3: Even if developers do build, low-income renters won’t benefit. None of these are new arguments; after the events of the past few years, it’s time to put them to bed.

YIMBY Reforms Are Already Happening

For someone who wants the U.S. government to launch a revolutionary state homebuilding program, Waldman seems rather pessimistic about the prospects for ambitious policy reform. Homeowners in supply-constrained areas, he writes, will never countenance pro-housing land use reform:

Note that your town doesn’t need to already have zoning laws historically rooted in racial segregation. It will invent them, or it will invent something else, because the people who bought homes they live in neighborhoods they love, upon whose character they have based their security and lifestyle, into whose financial value they have leveraged their net worth several times over, will not stand for leaving those assets to the vicissitudes of private home developers.

Waldman — again, in an odd move for someone attacking YIMBYism from the left — underestimates the power of organizing. In terms of legislation passed and candidates elected, it’s not an exaggeration to call YIMBYism one of the most successful social movements of the past decade — especially if we’re only talking about non-reactionary social movements. The past few years have seen major state-level pro-housing reforms all over the country; even more ambitious reforms in select cities; and the popular election of YIMBY-aligned candidates at every level of government.

Because he ignores these successes, Waldman misses a few of the key dynamics that make pro-housing reform possible. The first is one I’ve already mentioned: the power of YIMBY organization. The second is the role of federalism: where parochial NIMBY interests have more strength at the local level, activists are often able to outmaneuver them by building pro-housing coalitions at the state level.

And then there’s the homevoter hypothesis. Waldman embraces a maximalist version of this hypothesis, which stipulates that homeowners dominate local politics and act as a bloc in the furtherance of a single goal: protecting or enhancing the value of their homes by enforcing housing scarcity.

There is something to the homevoter hypothesis; homeowners do tend to have more political power than renters, and the most vociferous NIMBYs tend to be affluent homeowners. But like any model, it fails to fully capture the messiness of real human behavior.

In fact, a number of polls find that YIMBY policies are popular among a broad swath of homeowners. Take this Pew survey that found a majority of homeowners support policies like upzoning near transit stops and employment hubs. Or this similar set of findings from Zillow. In general, while locals may sometimes be uncomfortable with specific projects in their backyards, they’re broadly supportive of reforms to allow more housing construction in general.

These survey results don’t make a lot of sense if you take a mechanistic view of homeowner interests: one which holds that housing scarcity inflates home values, and homeowners want higher home values at all costs. But consider that many homeowners also have kids; maybe they wish their kids (and current or future grandkids) could afford to live nearby. Maybe they own local businesses and have a hard time recruiting or retaining staff because workers are getting priced out. Maybe they’re worried about the fate of the local school district when a teacher’s salary doesn’t pay for a decent apartment anywhere in the vicinity.

Then there are the homeowners who care about the climate and appreciate the sustainability benefits of dense, walkable, transit-oriented communities; or maybe they just like living in those communities. Rising homelessness, too, no doubt plays into the political calculus of many homeowners: polls in California routinely find that voters see the homelessness crisis as the state’s most pressing issue.

Whatever their motivations, a sizable majority of homeowners are at least open to pro-housing policies; and in fact, grassroots YIMBY groups count plenty of homeowners among their ranks. I know this because I’ve met many of them.

So much for the first utility thesis. But even if YIMBYs manage to reform land use, Waldman argues, private developers will never build at a scale necessary to relieve the housing crisis. “In general, firms prefer to [produce] small quantities at high prices, rather than large quantities at low prices, if they can get away with it,” he writes. Why would “swarms of home developers … engage in ruinous competition to build, driving down the price of the goods they produce and sell?”

This was a reasonable concern a half decade ago, before we had much empirical research on what happens in the aftermath of a significant upzoning. But now we don’t need to speculate on whether developers would build if we sufficiently relaxed land use rules; we can see them doing it. The clearest evidence of this comes from post-upzoning Auckland, New Zealand, though we’re also beginning to gather some useful data from U.S. cities like Minneapolis and Austin. And that’s to say nothing of the growing cities that already had both loose land use rules and extraordinary rates of private housing production: both domestic locales like Houston and more far-flung metropolises like Tokyo.

There are a couple of reasons why Waldman’s model doesn’t match up with reality. The first is that he ignores the ways in which development firms specialize; the second is that he doesn’t account for the time lag between housing development and demand responses.

Let’s deal with each point in turn. Waldman is correct that development oligopolies tend to dominate housing production in high-cost areas. But the firms that comprise these oligopolies tend to specialize in certain housing typologies. A firm that gets really good at building 5-over-1s probably doesn’t have a sideline in McMansions. Restrictive land use rules allow firms to dominate regional markets because those rules limit not just the amount of housing that gets build but the kind of housing.

That’s a big part of why California’s accessory dwelling unit reforms were, as Waldman concedes, pretty effective. The big, entrenched incumbents in California metro areas were not ADU specialists. So when it suddenly became a lot easier to build ADUs, that created a development submarket that could only be serviced by scrappier outfits. Those firms had neither the incentive nor the ability to control supply by restricting overall production; their incentive was to build. In a housing market that allows housing to be built in all shapes and sizes — ADUs, detached, single-family homes, 5-over-1s, pencil towers, townhomes, duplexes, triplexes, etc. — developers will be hard-pressed to consolidate into a cartel and deliberately restrict supply.

As for the time lag issue: It takes a lot of time to produce a single unit of housing, especially when compared to a single unit of most other consumer goods. Developers try their best to estimate what demand will look like in a particular area by the time a certificate of occupancy gets issued, but it’s a tricky business. As a result, it’s quite easy for the homebuilding industry in a high-demand area to overshoot and keep adding homes for a little while after demand has already peaked, or even fallen. This happened in certain high-cost areas during the COVID-19 pandemic and briefly spurred landlords to offer sweetheart deals for anyone willing to sign a lease. (My then-girlfriend, now-wife and I were direct beneficiaries of this dynamic: when, in the summer of 2022, we signed the lease on an apartment in a Berkeley 5-over-1, the property manager waived the first three months of rent.)

Unfortunately, the reverse is also true: when demand spikes in a particular area, it can take a while for developers to catch up. But that lag is only made worse by regulations that make it harder to build a variety of housing typologies quickly and cheaply.

A final point on the second futility thesis. Waldman suggests that infill development is too challenging to yield much housing. He writes:

And then there are basic facts of physics and geography. Infill of existing density is challenging and costly. Infrastructure must be retrofit. Even if eventually there will be room for so many more, current residents may need to be displaced (and in practice often never become part of that many more).

There is some truth to this. It is hard and expensive to knock down a mid-rise apartment building and replace it with a slightly larger apartment building. I would argue that’s a good thing: it should be difficult to displace residents of existing multifamily housing. But there are plenty of opportunities for infill development that don’t require knocking down in-use apartment buildings.

Consider that more than three-quarters of the residential land in even dense U.S. cities is usually zoned to only allow single-family homes. If you significantly upzone much of that land, then you will likely find developers willing to build on it. This would not require the forced removal of existing residents; instead, many developers may find it worth their while to buy out homeowners, and some homeowners will no doubt be willing to take that deal. Some anti-YIMBYs may still label that process “displacement,” but I find such a capacious definition tough to swallow. A household that freely accepts an offer of several hundred thousand dollars to move somewhere else isn’t being displaced any more than someone who voluntarily relocates to take on a new, more remunerative job.

And in fact, some homeowners may choose to stay on their existing property while adding some density to it themselves. That is exactly what California’s ADU reforms have enabled; in cities like San Diego, it is possible for owner-occupiers to build multiple ADUs on their property, significantly adding to neighborhood density without displacing a soul.

Underutilized residential land is just one of the places where we can add new infill housing. There are also commercially zoned parcels; reforms such as California’s AB 2011 have made it legal to build homes in previously housing-free strip malls and commercial corridors. Similarly, office conversions and the rezoning of wasteful or inefficient uses (such as surface parking lots, the bane of my existence) can add more housing to already built-out areas.

As for Waldman’s point about infrastructure, I find it difficult to respond unless I learn more about his specific infrastructural concerns when it comes to infill housing. Multifamily buildings tend to be pretty energy and water-efficient; further, a lot of decaying or dirty infrastructure in American cities already needs retrofitting. I’m unclear on why this should be an insuperable cost, especially when Waldman’s proposed alternative is building entirely new urban sewer and energy systems in uninhabited areas.

Pro-Housing Policy Is Redestributive

I’ll deal with Waldman’s third futility thesis relatively quickly, both because this post is already long enough and because I’ve addressed it in the past. Waldman doesn’t seem especially interested in this thesis himself, since he tosses it out as a throwaway assertion and doesn’t bother marshaling any evidence in its defense. Legalizing more private housing production, he writes, “would tend to serve the better-off in favor of the worse-off, as market-based solutions usually do.”

This is an article of faith, not a serious argument. As I’ve written before, we now have ample empirical evidence that building new homes relieves cost pressures on even the lowest end of the market. This makes intuitive sense if we accept the homevoter hypothesis (which Waldman implicitly endorses) in even its weakest form: if affluent homeowners want to block new housing in order to juice housing cost inflation, then building more housing must redistribute unrealized home value increases from homeowners to other actors in the housing market. These other actors include people who would not be able to afford housing if homevoters were successful in strangling supply.

As I’ve already noted, building more homes will not, on its own, make it so people with extremely low incomes can afford decent housing. That’s why most YIMBYs support subsidizing the housing costs of extremely low-income people, whether through affordable housing development, rental vouchers, or other means.

Subsidies are not an alternative to pro-housing land use reforms but a necessary complement, for reasons I’ve articulated previously:

Think of it this way: in City A, which has plentiful apartments that rent at $1,000 per month, you can pull someone out of homelessness, give them a rental voucher, and get them comfortably housed for $12,000 annually. But in City B, where the average market-rate studio apartment rents at $3,000, the cost of housing that same individual commensurately rises threefold. If you have any sort of budgetary constraints on your rental voucher program, that means you can only serve one-third as many residents in City B as you can in City A.

Similarly, public funds for homebuilding don’t get anywhere near far enough in high-cost cities with restrictive land use regimes. Partially thanks to high land costs and complicated permitting rules, it can cost up to $1 million to develop a single unit of low-income housing in California. Again, the more it costs to build a single one of these units, the fewer people you’re actually able to get housed.

To paraphrase the title of a report I wrote on the subject, housing abundance is a precondition for ending homelessness.

On the Scarcity of San Franciscoes

As an adjunct to his third futility thesis, Waldman insists that we will never build enough to satisfy demand for housing in so-called superstar cities: “supply growth in those already built-out places will nowhere near match the tsunami of demand they face from people who would migrate there if they could.” His preferred strategy is to create new competitors to those cities: “You cannot, will not, overcome the scarcity of San Francisco. What you can overcome is the scarcity of San Franciscoes.

As with many of his arguments, there is some truth to this. San Francisco and New York City will probably always be more expensive than, say, Memphis or Pittsburgh. But more expensive does not need to mean wildly more expensive. With the right policy approach, I am confident we can bring housing costs within the superstar metros more in line with what you see in cheaper cities when adjusted for local incomes.

At the same time, we should by all means nurture the economies of other, lower-cost cities. But as with housing subsidies, we should do this as a complement to YIMBY policies instead of as an alternative.

In part, that’s because the superstar cities already have housing and homelessness crises that we need to address. And though Waldman doesn’t acknowledge it, supply constraints and restrictive land use rules in those cities actually exacerbate the regional inequality he bemoans. As some cities have become significantly more costly than others, a recent ADP study finds that executives have increasingly congregated in the more expensive regions while “offshoring” lower-tier employees into relatively affordable areas like the Sun Belt. (I have a forthcoming Business Insider piece that discusses “domestic offshoring” in more detail.)

But the other reason is that we won’t be able to demand manage our way out of population growth in superstar cities. We already tried that in the second half of the twentieth century when we downzoned San Francisco, Los Angeles, and New York to cap population growth. How did that work out?

As for the cities that have grown most in recent years — places like Phoenix, Houston, San Antonio, Houston and Jacksonville — they need pro-housing policy too. Houston has actually done pretty well in that regard, having repeatedly rejected proposals to impose a citywide zoning code.

Phoenix, now grappling with a homelessness crisis of its own, needs some more work. Fortunately, there’s a thriving YIMBY movement in Phoenix and the state of Arizona as a whole. They just had a big statewide win, legalizing townhomes and 2- 3- and 4-plexes near central business districts.

The YIMBY victory in Arizona points to one final error on Waldman’s part, an unstated assumption of his that hangs over the rest of the piece: though you wouldn’t know it from reading his post, YIMBYism is not just for San Francisco and New York. Over the past few years, some of the most impressive wins have come out of great and growing American metros that are nonetheless not “superstars” or global cities. And for good reason: those places are facing significant cost pressures too.

But if cost pressures were the only thing motivating YIMBY activists and policymakers, they would probably be pushing a different solution set, one that relied more auto-oriented suburban sprawl development and avoided conflict with incumbent interests in already-developed areas. Instead, you see YIMBY groups all over the country working to build great cities and great metropolitan areas: affordable, yes, but also diverse, sustainable, economically productive, safe, and joyous places to be. That mission resonates with more people than Waldman seems to realize. And where we’ve turned it into law, we’ve seen it begin to work.