My $40,000 CD collection is worthless—and I'm thrilled
CDs vs. NIMBY
A music lover with 4,000 CDs sees their value collapse to near zero thanks to streaming. But instead of lamenting the loss, they argue that the ability to access infinite music for free creates a massive consumer surplus, far outweighing the $40,000 they spent. The same logic applies to homeowners facing property value declines from deregulation: the loss is offset by cheaper housing for themselves and their children, making it a net gain.
Lose the value of your home, gain access to every home of your dreams.
- bwhiting2356
Increasing housing supply does not decrease home values, because high density housing benefits from network effects/economies of agglomeration. NIMBYs don't object because they think their house will be worth less, they object because they believe their quality of life will go down (based on what is important to them).
Higher density brings both good and bad:
upside:
- high paying, specialized jobs
- specialized, high quality services
- stores open late
- better dating (more fish in the sea)
downside:
- more traffic
- more noise
- more pollution
- more anonymity, crime (people in small towns leave their doors unlocked and say hi on the sidewalk)
The people who benefit most from higher density tend to be young professionals, which tend to not currently live in the neighborhood and will move in if density goes up.
- happytoexplain
A tortured analogy. The concept of `NIMBY === house as investment` is a very common strawman. Believe it or not, most people care about their homes and communities for their intrinsic value, which is where most NIMBYism comes from.
- nyc_pizzadev
Not sure this home math is right. Usually home builders are profit seekers, so if they build in a neighborhood of 1MM homes, they will price aggressively against those comps and quality. Let’s say a home goes for half price, then those homes will get snapped up and eventually everything resells closer to the true valve. Given real estate rarely drops a lot in value, that price might be a bit below 1MM.
- triceratops
I think NIMBY is an overly generous term. I take no issue with someone who doesn't want higher density in their own, literal backyard i.e. land they own. NIMBYs want to control other people's land.
- ndiddy
One thing a lot of YIMBYs get wrong is that you can't deregulate your way out of a housing crisis because of how new housing is financed. Builders depend on outside investors to finance new housing projects. These investors base their investment not only on the land value and potential rent they'd be able to collect when the housing is built, but also how much they'd be able to raise the rent after it's built. This means that when the rent in a given area isn't rising enough to make new housing an attractive investment, new housing will stop being built in that area.
A big factor in why housing was affordable for most of the 20th century was the Savings and Loan associations, a product of New Deal era banking regulation. S&Ls were the only financial institutions allowed to take deposits in most communities due to limits on bank branching. They had access to very cheap financing because of regulations prohibiting interest on checking accounts, and limiting interest rates on other types of deposits. They were also only allowed to lend money for local real estate projects. This meant that you had a captive market where local savings could fund local housing development. The system fell apart after Reagan era deregulation forced the S&Ls to compete with national institutions offering higher returns. The S&Ls were pressured into offering higher returns themselves by shifting from residential financing to more speculative commercial real estate projects. The result was the failure […]