London NIMBYs and YIMBYs Unite To Build More Housing

Could allowing blocks to upzone themselves end the most intractable feud in urban development?


If anyone was a likely NIMBY ("not in my backyard"), you might suspect Jacob Rees-Mogg, the pinstriped suit- and monocle-wearing Conservative Party member, Brexit supporter, and leader of the British House of Commons. But there has been a striking change in the U.K. housing debate. YIMBYs ("yes in my backyard") in England have staged a remarkable campaign, winning over seemingly impossible opponents, and proving that housing need not be a zero sum issue. Their housing reform ideas have built a surprisingly large coalition by making change more win-win. Some of those ideas are worth trying in the United States.

Like many U.S. cities, London faces an intense housing shortage. Since World War II, it has never grown its housing stock at the net percentage rate of the 1820s, let alone the vastly higher rate of the 1930s.

The fundamental reason is the English discretionary approval system, which makes almost every U.S. zoning system look like a developer's dream. Faced with 70 years of failed attempts to reform that system, London's YIMBYs were forced to get creative.

Rees-Mogg forms part of an unlikely coalition of YIMBY supporters in England, ranging from the former president of the Royal Institute of British Architects, to the left-wing mayor of London's official design advocate, to the head of Crown Prince Charles's official foundation.

Through zoning laws, homeowners have effective protection against the spillover effects or "externalities" of new development that would be a nuisance to them. But that protection is very blunt: In many places, it prohibits virtually all development, even where it might be done in a way that residents would benefit from and support.

Rather than pushing the state to try to strip away those protections in the face of fierce resistance from homeowners, London's YIMBYs suggest harnessing the strong incentives facing each landowner to do more with their land. As George Mason University economist Tyler Cowen has pointed out, if we let them bargain about those protections, some homeowners will choose win-win deals to allow development on their own land. The idea is to give residents on single streets or blocks the power to vote by qualified majority to permit more homes—"street votes" and "block votes"—subject to rules to protect others.

That idea has won support from the British government and from a range of civic organizations more often seen on the NIMBY side of debates.

Street votes can be viewed as an alternative approach to zoning, adapting a 1998 idea of the libertarian zoning scholar Robert Ellickson for "Block Level Improvement Districts." Because unanimity would generally be costly or impossible and upzoning does not remove any existing legal rights, "street votes" follow the analogy of corporations in allowing decisions by supermajority vote.

On a small scale, small groups of neighbors in expensive places like San Francisco could double their property value by choosing to allow more housing on their lots through duplexes, triplexes, or more. Alternatively, they might simply decide to allow auxiliary dwellings or "backyard cottages" for family members or a paying tenant, as has recently proven popular in Seattle.

The votes are meant as a supplement, allowing more housing without interrupting traditional zoning processes. In the suburbs of New York City, Washington, D.C., or Silicon Valley, they could create enormous value.

Most streets and blocks will probably not decide to allow extra housing. But if even a small proportion do, that could make a substantial difference to the currently small amounts of housing added each year in many U.S. cities.

Many arguments for more housing frame it as a zero sum struggle between society's interest in building more homes and existing residents' wish to defend their neighborhood. That is profoundly mistaken. Existing residents can become enthusiastic supporters of building more homes if they share in the benefits. In other parts of the economy, we allow private negotiations to find those win-win outcomes, but current top-down zoning systems struggle with the politics of allowing that type of beneficial change.

Related ideas have already succeeded in the U.S., from business improvement districts and UCLA urban planning scholar Donald Shoup's idea to allow neighborhoods to opt into parking controls, to recent opt outs allowed by street and by block in Houston. We should try giving residents a supplementary power, not to add more housing restrictions, but to allow more housing where they see the benefits for them.