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What a “Critique of YIMBY Economics” Gets Right and Wrong

PLANNING WATCH LA

PLANNING WATCH - I have written many columns about the housing crisis.  Is it caused by zoning laws, which we are told by the astro-turf YIMBY (Yes in My Backyard) groups increase homelessness?  Or is the housing crisis structural, caused by the elimination of public housing, rising poverty and economic inequality, and cash purchases of private housing by investment companies seeking higher profits?

The answer is important because nearly all elected and hired government officials , whether Democrats, Republicans, or non-partisan, subscribe to the YIMBY position.  They support the deregulation of zoning laws because they imagine it reduces homelessness.  What is not clear, however, is the housing positions of the presumably progressive elected officials, who are members of or endorsed by the Democratic Socialist of America (DSA).  For example, in  Los Angeles the new City Controller,  Kenneth Mejia, plus three members of the City Council, Nythia Raman, Eunisses Hernandez, and Hugo Soto-Martinez, received DSA support.

For these reasons a reader sent me The Problem with YIMBY Economics.  This article, by Seth Ackerman, published in the September Jacobin Magazine, helps answer this question because this magazine is closely aligned with the Democratic Socialists of America.

What the article gets right is that YIMBY economics is, essentially, the deregulation of local zoning laws via upzoning.  Previously called Reaganomics, trickle-down economics, and supply-side economics, upzoning raises the price of urban land by allowing more uses, height, and density on existing parcels.   Furthermore,  by failing to plan for the infrastructure and public services needed by these new buildings and their well-off tenants, YIMBY economics also leads to more traffic jams, crowded schools, water rationing, and electricity black outs. 

Why, therefore, am I damning this Jacobin article with faint praise?  While this article’s focus on the negative results of upzoning is commendable -- higher housing prices and more homelessness -- the Jacobin article agrees with some basic YIMBY tenets and ignores 10 underlying causes of the housing crisis that it claims to remedy. 

Ackerman’s article agrees with the YIMBY claim that the United States suffers from a housing shortage.  He also states that the “left” has become receptive to neo-liberal ideas, by which he really means some Democrats, not socialists and communists.  The main thrust of his article is, however, a liberal economist’s discussion of the impact of land prices on housing prices, with, of course, a graph comparing housing-cost growth in 72,000 U.S. counties.

This take on the housing crisis is not limited to Jacobin Magazine.  For example, in the September 19, 2023, LA Times, reporter Andrew Khoury addressed The California Conundrum: Fewer People, more homes, but an acute housing shortage.  With fanciful answers from housing researchers, the Times failed to explain why YIMBY economics has not reduced homelessness in California.  Had the paper included the following causes of the housing crisis, it could have answered this question.

These are at least 10 underlying factors responsible for the U.S. housing crisis that YIMBY’s and their supporters ignore.  When their critics mention these factors, the YIMBYs don’t thank them, but smear them as NIMBYs (Not in my backyard).  What the trickle-downer's don’t realize is that their critics oppose giving away the store to developers for fraudulent reasons.  For example, the critics reject the YIMBY claim that homelessness is caused by a housing shortage.  They argue that existing data documents high vacancy rates, including a National Association of Realtors report that the United States has 16 million vacant homes.

These are the ten reasons for the housing crisis that the YIMBYs and their supporters deliberately ignore because of their hidden agenda.  They call for deregulating zoning laws because it makes private real estate investments more profitable:

  • Elimination of HUD and CRA public housing programs beginning over 50 years ago with the Nixon Administration (1968-1974). The one remaining public housing program, Section 8 vouchers is underfunded.  In A. only one in ten applicants get a voucher, and 30% of them fail to find a rental unit.

  • Rising economic inequality and poverty has priced many people out of housing, forcing them to become homeless or live in rent-gouged and overcrowded apartments.

  • Large investment companies, like Blackstone, have purchased homes and small apartment buildings as speculative assets. Their signs, such as “We pay cash for houses.” are liberally plastered around Los Angeles and other large cities to lure in distressed homeowners who cannot make mortgage payments.

  • Upzoning programs, such as LA’s new 2021-2029 Housing Element, increase the value of parcels, raise the cost of shelter, and increase homelessness.

  • Pandemic era eviction moratoria are ending. In Los Angeles there have been 40,000 eviction notices so far in 2023.

  • Gentrification and mansionization of existing housing, sometimes legal and sometimes the result of LADBS negligence, continues. When this happens, the size and cost of new homes balloons.

  • Public mental health services remain underfunded.

  • Give-away programs to developers, like SB 1818 and LA’s Transit Oriented Communities, continue, despite a lack of vetting and monitoring.

  • YIMBY’s do not understand the “law” of supply and demand. It only applies to situations where sellers make an acceptable profit.  This is why developers and real estate brokers ignore the massive demand for low priced housing.

  • Growing organizations, like the LA Tenants Union, call for housing to be a human right, not an expensive commodity.

These are the underlying reasons why YIMBY economics makes the housing crisis worse and why this outcome is nevertheless ignored.

(Dick Platkin is a retired Los Angeles city planner who reports on local planning issues for CityWatchLA.  He is a board member of United Neighborhoods for Los Angeles (UN4LA).  Previous columns are available at the CityWatchLA archives.  Please send questions and corrections to [email protected].)