plan purports a 12% growth but up-zoning the whole city means Minneapolis
could take all the growth forecast for the Twin Cities and much more. Any
home can be demolished. 15-20 story towers are envisioned throughout the
City. Uptown and around the lakes becomes Manhattan. And according to
this theology of density called YIMBY - this is good.
Why do YIMBY? The argument is that we are not producing enough housing to
meet demand because of onerous regulations like zoning. If we reduce
regulations on developers, the marketplace will produce more housing and
home prices will decline, rental costs will decline, income inequality will
be reduced, historic racial inequities will be reduced and we will be a
better city. Clayton Nall, a professor of political science at Stanford,
calls YIMBY âAn economically progressive message tied with a
pro-development message that can potentially ameliorate the concerns of
liberal homeowners.â ('Not in My Backyard' to 'Yes in My Backyard.' Alana
Semuels. The Atlantic. Jul 5, 2017)
https://www.theatlantic.com/business/archive/2017/07/yimby-groups-pro-development/532437/
Where does this pro-developer/anti-regulation thinking come from? The
Atlantic did a good review of this movement called âYIMBY.â Unsurprisingly,
it is a tech and developer-funded effort coming from San Francisco, a place
that is truly having a housing shortage because of the large influx of
people due to the tech boom. North Americaâs first YIMBY convention,
YIMBY2016, was funded by the National Association of Realtors and the
Boulder Area Realtor Association among other groups.
(
https://truthout.org/articles/yimbys-the-alt-right-darlings-of-the-real-estate-industry/)
But is Minneapolis having a housing crisis? Are we San Francisco? Are we
Seattle? No. When adjusted for inflation, median housing prices in
Minneapolis are what they were in 2003. Apartment rents went up 3.3%
overall last year. We do have a small amount of inventory on the market
currently for people buying new homes but that is because developers did
not expect our current economic expansion to last as long as it has.
Developers will build to meet demand as they always have and that will be
addressed. Minneapolis is not San Francisco. Minneapolis is not Seattle.
Will reducing regulations on the development industry produce really
produce more housing? Undoubtedly, as that is the usual consequence from
deregulation. But will it produce more affordable housing as the YIMBY
advocates claim? More housing for historically oppressed groups? No. New
housing construction costs are too high for the private market to produce
housing affordable to low income persons without government intervention.
In fact, existing naturally occurring affordable housing will be first to
fall to the axe, as it is the housing that can provide the most profits. This
will reduce affordable housing and not help any historically oppressed
groups. It will also accelerate gentrification. And because any home can
be demolished and up-zoned, home prices overall will increase, making all
existing housing less affordable.
Wonât supply and demand mean that if we have more supply, costs will go
down? First off, traditional thinking about supply and demand doesnât work
because people donât have a cabin in the City. They donât go out and buy
another house when prices go down. Every person buys only one housing
unit. So traditional supply and demand thinking doesnât really
work. Builders
donât build housing they expect will be empty. Unless you are an extreme
situation like Seattle or San Francisco where a large number of people are
living doubled or tripled up waiting to buy housing, building more housing
wonât drive down housing costs. In Minneapolis, new housing is much more
expensive than existing housing and building more new housing will not
drive down the cost of existing housing.
Also, our real-life experience shows that new housing is not driving down
the cost of housing. Minneapolis has added about 20,000 new housing units
yet rents in Minneapolis have gone have gone up because of the new housing,
not down as YIMBY advocates say it will. New housing is just more
expensive than 100 year-old, fully depreciated housing.
Who is helped by deregulating the housing industry? Developers. Rich
people. Here is a real example. North Bay wants your money.
http://northbaycos.com/projects/ If you give North Bay $100,000, they
will invest it in this rental property that will be built at 2407 2nd St NE:
https://lims.minneapolismn.gov/Download/RCA/3255/2407%202nd%20St%20NE%20Staff%20report%20attachments.pdf
And you will get back 15% a year each year for 20 years. Pretty sweet
return, right? That is the reality of market rate development in
Minneapolis.
I have to give it to the YIMBY movement. They have done a really good job
of enlisting good people who care passionately about this City. And
telling them things that are just not true. And those good people believe
this stuff because they want solutions to things like historic racism and
inequality and expensive housing. We need solutions to those things. But
radically deregulating developers isnât going to do that.
What do we need to do?
We do need to find housing for another 50,000 people over the next 20
years. But we also need to protect our existing housing stock because old
houses are more affordable than new ones. We should not up-zone the City
and open it all up to bulldozers. We need to invest government resources
in more affordable housing and we need to do that smartly. We need to stop
tear downs of existing affordable homes. We need to continue to focus new
development in our existing walkable environments and at high frequency
transit nodes throughout the City.
What shouldnât we do? We shouldnât just turn the keys of the City over to
developers to let them have their way. The YIMBY movement should be
exposed for what it is: a de-regulation gift to developers.