Report a Comment

"But if the development doesn't happen and the neighborhood remains in demand, their rents will rise anyway. That's what is commonly missing from a NIMBY mindset. It misses on the dynamism of any urban place by assuming that the status quo can be maintained, and that not changing will maintain an equilibrium. That's a false assumption."

Well its also often that the renters in an area of increasing desirability oppose not only the new high density residential, but other changes that increase desirability. Even when an area increases in desirability, and rents for older housing increase, it often will still be more possible for them to afford to stay then if their units are torn down to create new units. It thus may STILL be rational for them to oppose new hirise development. as another poster mentioned, the incentives are different for owners - who may WANT to see prices and rents for older units rise, without the nuisance effects of new high density construction.

@WRD I would not suggest that supply and demand do not funtion in housing markets. They do, and can explain a great deal in terms of pricing. If "supply and demand functioning" means supply and demand determining price thats one thing. If 'supply and demand functioning' means that the market price is A. pareto optimal and even B. optimal for all market participants thats not the case I believe. Not just the transaction costs, but the externalities in housing, can make resistance to change thoroughly rational. And by externalities I am NOT referring so much to traditional nuisance effects, as to the social benefits of living in certain communities. Unless you are going to pay your new neighbors to hang with you on the street corner, there are things that you can't buy - because you cannot buy them, there disruption by market forces is a negative externality of market forces (of course there are ways people try to buy "community" but the results of that are mixed, IMO)

by AWalkerInTheCity on Sep 21, 2011 2:46 pm • link • report