A perfect storm of over-regulation and market forces are causing a massive California housing shortage.
Some of the blame can be pinned on most banks’ conservative loan practices–since the Great Recession they’ve been shy about funding real estate development because they lost their shirt during the last crash.
On the other hand, many point to out-of-date urban planning processes that kill many proposed projects before they get off the ground. Over the years, this has created a construction deficit that’s been extremely damaging to housing affordability: The average house in California is two and half times more expensive than the national average.
This is why California has some of the highest out-migration rates in the country. Housing simply is out of reach for the middle class.
Oh my God, here come the NIMBYs!
The problem isn’t just in California, it’s nationwide. Civic input is the centerpiece of American urban planning and that obstructs a great deal of progress in increasing density.
By design, city planning meetings usually include input from the local community, and this gives people an open mic to express their feelings on a pending project in their neighborhood. The problem is that there’s still a 1950s mentality that increasing density is bad for their neighborhood. Even a small group of anti-development voices can seal the fate of a project.
Contrary to what those cantankerous old people might think, there are a wealth of studies that document the power of density. In fact, when then the proverbial crazy cat lady obstructs development in her ‘hood, she may be inadvertently be making her city poorer and less happy.
California is starting the tackle the problem by fighting back against these people who are often called NIMBYs (Not In My Backyard). Today, we’re seeing the rise of YIMBYs (Yes In My Backyard) who are battling generations of disgruntled folks who like to scream at city council meetings about traffic.
The surfer dude solution
California is having to confront the problem square on, because the current housing situation there isn’t sustainable. This is prompting YIMBYs to fight neighborhood groups and cities to finally get some new housing built. The Wall Street Journal spoke with some of these high-profile YIMBYs, and their message was simple: They want to revamp out-of-date planning norms to help housing affordability.
Reform, don’t scrap
Land use regulations and the entire development permitting process exists for a reason: To protect quality of life and sensitive environmental areas. People worry that approving more projects will lead to environmental destruction or favor only luxury housing.
The concerns for most folks when increasing density are traffic and schools, so any attempt to increase density beyond a certain threshold should be accompanied by plans to have enough infrastructure to accommodate growth.
The current sentiment behind the movement to defeat NIMBYism isn’t to scrap urban planning altogether, but instead to bring it up to date with today’s needs and economic trends.
Takeaway: This is a problem everywhere
The old maxim still holds true: As goes California so goes the rest of the United States. Increasingly, there are regions across the country suffering with the same problem. Places with a vibrant job market and a booming local economy often have absurd housing prices.
NIMBYism is far too often responsible for holding back communities from creating dense communities. Even worse, NIMBYism often breeds segregation by driving home prices into the stratosphere and summarily rejecting the construction of any middle- to low-income housing projects.
The city of the future probably isn’t your parent’s unwalkable suburb. It’s going to a be a pedestrian-friendly place that welcomes density. If cities that don’t adapt to the new paradigm of higher density, they risk dooming themselves to economic stagnation.
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