The More Density We Build, the More Valuable "Neighborhood Character" Will Be

My relationship to the YIMBY movement is a little complicated. One issue is a tendency to oversimplification. It’s understandable; the NIMBY position really is so noxious and the stakes are so high that there’s a natural desire to speak in black and white. But here’s a point that I don’t see engaged with much: while the zoning and regulatory hurdles are the major impediment to more building and lower costs, I suspect that even after major reform we won’t see immediate levels of building at the scale YIMBYs want and that we need. I suspect that market forces, inertia, and status quo bias will slow new building (and attendant badly-needed housing cost reductions) more than assumed. Tearing down regulatory barriers is essential, but that by itself won’t turn Pacific Heights into Neo-Tokyo.

I think one reason is that, as more density gets built, neighborhoods that preserve “neighborhood character” - that is, that retain the kind of low density lifestyles that characterize many expensive urban neighborhoods - will get attendantly more expensive. And that will make new building less economically attractive in pure market terms. If the luxury premium that you get from each resident is high enough, you can maintain a profit advantage compared to fitting even a great many more tenants into the same space. Rich people will pay a whole lot to keep other people out.

So if you look at the kind of walkable, low-density Brooklyn brownstone lifestyle a lot of people see as enviable, you’ve got places like Boerum Hill, Fort Greene, Clinton Hill, Park Slope…. These places are expensive for a variety of reasons, but certainly one of them is lower population density and the smaller-scale housing that affords. (You can see this in a neighborhood like Bedford-Stuyvesant, where there’s both very wealthy people and quite poor - and the easiest way to tell which parts are which is to note how dense the housing is.) Right now Park Slope’s large buildings are mostly found on its western edge on 4th Avenue and immediately closest to Prospect Park. In between is a sea of townhouses and other forms of low-density buildings. If we were to enable zoning reform to permit denser building in the streets that are now almost exclusively brownstones, we’d raise the housing stock and create some desperately-needed downward pressures on rents. But we would also find that the kind of bourgie people who would have paid $3 million for a house there would instead start competing for that “small town in a big city” lifestyle in those other neighborhoods, and this competition would make the existing housing stock even more expensive, thus undercutting the financial incentive to tear down low-density housing and put up high rises.

It’s also the case that, since there’s a relationship between housing density and income, the people who would be able to fight against new building most effectively would be those in low-density, even in a much-reformed regulatory environment. Rich people have multiple ways to get what they want, including in a freer housing market. Affluent people can just generate more noise and make life harder on developers even absent the most onerous zoning barriers. Dollars talk. (I had an ex-girlfriend whose family lived in a tony seaside Connecticut town; when someone was going to sell a parcel of land to put up another house on their block, the local residents simply split the cost and bought the lot so that no new building would happen.) And so you can easily imagine a future in which we pass zoning reform and yet Park Slope remains Park Slope, but where a neighborhood like Prospect Lefferts Garden - 75% Black, median income under $40,000, with a lot of single-family housing and a great deal of gentrification anxiety - sees sudden intense building and a resulting change in the demographic composition of the neighborhood. That would enflame precisely the sensitivities that we see in working-class communities of color when new building is proposed. And while I find resistance to such new building misguided, those of us who want to build more have to acknowledge that it’s an ugly thing if rich white people can keep new developments off their block but poor people of color can’t.

(Here’s an NBER paper about the costs of low-density housing such as Brooklyn brownstones, if you’re interested.)

None of which, of course, is an argument against tearing down our absurd zoning system and getting some building going. My girlfriend and I were shopping for a new apartment a month ago but are no longer shopping, thanks to an absolutely ludicrous rental market in Brooklyn right now. Across the country, people not only in major cities but satellite cities are just getting crushed in the housing market. We have to build. But “just build” is never sufficient analysis. I suppose it just gets to an underlying point: I absolutely agree with the YIMBYs that the concept of neighborhood character is not sufficient reason to prevent building that could provide relief in a housing emergency. But as rents spiral ever-upward, we continue to see that there’s often a premium attached to that exact quality, that walkable, small-town property. I might not value it very highly, but people with money to spend clearly do. And we have to find ways to build that aren’t purely free market solutions, as I’m simply not convinced market forces in and of themselves will compel building at the scale that we need. For this reason and others I think left YIMBYs have the goods in a way free-market YIMBYs don’t.