The NIMBY problem
| Author | David Foster,Joseph Warren |
| Date | 01 January 2022 |
| Published date | 01 January 2022 |
| DOI | 10.1177/09516298211044852 |
| Subject Matter | Articles |
The NIMBY problem
David Foster
Department of Political Science, Kenyon College, Gambier, OH, USA
Joseph Warren
Department of Political Science, University of California, Berkeley,
CA, USA
Abstract
Nimbyism is widely thought to arise from an inherent tradeoff between localism and efficiency in
government: because many development projects have spatially concentrated costs and diffuse
benefits, local residents naturally oppose proposed projects. But why cannot project developers
(with large potential profits) compensate local residents? We argue that local regulatory institu-
tions effectively require developers to expend resources that cannot be used to compensate resi-
dents. Not being compensated for local costs, residents therefore oppose development. Using a
formal model, we show that when these transaction costs are high, voters consistently oppose
development regardless of compensation from developers. But when transaction costs are low,
developers provide compensation to residents and local support for development increases.
We conclude that nimbyism arises from a bargaining problem between developers and local resi-
dents, not the relationship between local decision-making and the spatial structure of costs and
benefits. We suggest policy reforms implied by this theory.
Keywords
Local politics, politics of scale, formal model, political economy, housing policy, nimbyism
Many policies feature spatially concentrated costs and diffuse benefits. This creates a dis-
tinct problem for policymakers. Spatially concentrated costs can induce local residents—
classically labeled “Not In My Back Yard”(NIMBY) voters—to fight the proposed
development. To the extent that NIMBYs arise in every locality, it is difficult for
Corresponding author:
Joseph Warren, Department of PoliticalScience, University of California, Berkeley, 210 Social Sciences Building
#1950, Berkeley, California, USA.
Email: jwarren@berkeley.edu
Article
Journal of Theoretical Politics
2022, Vol. 34(1) 145–172
© The Author(s) 2021
Article reuse guidelines:
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DOI: 10.1177/09516298 211044852
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policymakers to find anywhere to locate projects, and this causes inefficient under-
provision of social goods. Most closely associated with housing policy, nimbyism
occurs in response to a wide range of potential projects, including energy installations
(Stokes 2016), transit routes (Elkind 2017), opioid treatment centers (De
Benedictis-Kessner and Hankinson 2019), and homeless shelters (Holder 2019).
In this paper, we focus on housing policy, both because of its substantive importance
and the extent of detailed empirical research. Nimbyism is widely blamed for land use
regulations that are empirically linked to high housing prices (Albouy and Ehrlich
2018; Gyourko et al. 2013; Ihlanfeldt et al. 2007). As of 2013, about one in ten
American households lives in houses with prices more than double construction costs
(Glaeser and Gyourko 2018).
1
On the California coast, in the same year, the median
home price was about three times construction costs (Taylor 2015).
2
In turn, reducing
high housing prices in major metropolitan areas in the United States is expected to
hold large benefits for equality, social mobility, and aggregate economic growth (see,
e.g., Ganong and Shoag 2017; Chetty et al. 2014; Hsieh and Moretti 2015).
Many policymakers and scholars focus on the scale of decision-making to explain
housing supply constraints. In the standard view of the NIMBY problem, the spatial
structure of development effects—specifically diffuse benefits and concentrated costs
—causes an inherent bias within local governments against new housing. Those who
experience the costs (local residents) have a say in local decision-making, while those
who experience the benefits (future residents or residents of the region as a whole) are
excluded from local decision-making. Cities and neighborhoods bearing the concentrated
costs of development oppose new housing while free-riding on the benefits of develop-
ment beyond their local area. This logic is evident among think tanks and policymakers
on the left (Levin 2018), center (Shoag 2019), and right (Hamilton and Furth 2018), as
well as among economists (Glaeser and Gyourko 2018), political scientists (Hankinson
2018), legal scholars (Schleicher 2013), and urban planning scholars (Manville et al.
2018). Scholars and policymakers who follow this logic advocate preempting local
decision-making by centralizing land use policy in state governments (Levin 2018;
Yglesias 2016).
Yet preemption of local decision-making comes with distinct dangers, especially for
disadvantaged communities. Influence in land-use decisions is a tool that community
groups can leverage to secure benefits and counter threats that they perceive from devel-
opment proposals (Been 2010). Imbroscio (2019) argues that state-level preemption of
local land-use decision-making is unlikely to do much to address urban inequality
while removing an important tool that current urban residents have to fight gentrification
and displacement. In response, Einstein (2019) argues that, for the most part, local land
use controls are used by privileged communities to maintain class and racial segregation.
While this is undoubtedly true (see, e.g., Trounstine 2018), it is also true that state-level
preemption of local policymaking is frequently leveraged by conservative state govern-
ments to overrule liberal cities with large populations of poor people and people of color
(Schragger 2018).
This debate is premised on there being an inherent tradeoff between local control of
land use policy and new housing construction—a view derived from the standard explan-
ation of nimbyism. In contrast to the standard explanation, we argue that the failure of
146 Journal of Theoretical Politics 34(1)
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