In the city where I live, rents have grown considerably, almost doubling in the last decade. House prices grew by ten percent from last year. The city is prosperous, and rent here had been low compared to other cities. Moreover, you the reader will have noticed that city centers are cool again, that people are willing to pay to be near the middle of things, and willing to pay property taxes to make that middle far more interesting than the burnt-out city cores of yesteryear. The same influx of people to city centers pits newcomers against old residents, in several ways. Most obvious is the friction among long-time residents and newcomers whose desire to move in makes the neighborhood progressively less affordable. Because of the class dimensions of the migration, the newcomers are accused of "gentrification," an old word that is now one of the newer imprecations in our lexicon.
Less noticeable is the role of incumbent residents and landowners in preventing the creation of new dwellings to accommodate newcomers. There are a good many new apartment starts in this city, especially in areas that a decade ago would be called blighted, and even now are a bit rough about the edge; whole blocks sport multi-family dwellings in different stages of completion. In an affluent neighborhood just a few miles north and west, the owner of an old, low-density set of apartments sought permission to tear them down and erect a mid-rise tower of some eight stories; while there are two or three taller towers nearby, the apartments would dwarf the large, single-family homes around them. The neighbors rallied, assured their council that they would not stand for such a thing, and managed to whittle the tower down to a four-story block. These apartments will now surely only be viable if they are luxury apartments, given their smaller number. The sentiment, “not in my backyard!” is strong and widely felt, and one our system of what Alex Tabarrok calls “communal land rights” makes forceful. This is not an obsession of free-marketers, but a problem we all must confront.
In the two decades from 1995 to 2015, the populations of Tokyo and San Francisco grew by roughly the same proportion. San Francisco's home prices more than trebled, while Tokyo’s grew by less than a quarter, chiefly because of restrictive zoning and land-use restrictions in the latter. In 2014, there were more new housing starts in Tokyo than all of California by almost half. Tabarrok writes, “Rising housing prices are not an inevitable consequence of growth and fixed land supply–high and rising housing prices are the result of policy choices to restrict land development. The policy choices were made–they can be unmade.”
In announcing her resignation from the Palo Alto Planning and Transportation Commission, Kate Downing explains her frustration with the strong Nimbyism to which Bay Area governments are beholden. The Commission did little to allow the stock of housing to grow, but not for lack of opportunity. In her words, “[s]mall steps like allowing 2 floors of housing instead of 1 in mixed use developments, enforcing minimum density requirements so that developers build apartments instead of penthouses, legalizing duplexes, easing restrictions on granny units… and allowing single-use areas like the Stanford shopping center to add housing on top of shops (or offices), would go a long way in adding desperately needed housing units while maintaining the character of our neighborhoods and preserving historic structures.”
They were very reasonably opposed by longtime residents. The sort of transformation that the sudden prosperity of Silicon Valley can impose is not comfortable, and indeed threatens the wealth gained, through happenstance, by those longtime residents. The pressures of growth, and the superior organization of incumbent residents, are exactly why California imposed, for instance, lamentable and inequitable controls on property taxes.
It ought to be impossible both to want there to be affordable housing, and to raise the cost of living by preventing any new homes from being built. It evidently is not. It is surely possible to love a place, and embrace newcomers who may yet love it for the same reasons, even if that place is changed by their coming. To care for our neighbor may require we urbanites to be a bit less restrictive about who our neighbors are.