Michael Macor/San Francisco Chronicle via AP
An accessory dwelling unit was constructed using four cargo containers in this Menlo Park, California, backyard, as seen on January 23, 2018.
This article is part of a Prospect symposium on tackling the housing crisis in America.
This summer, the pro-housing, pro-cities Yes In My Backyard (YIMBY) movement won over the highest levels of the Democratic Party to our solutions for the country’s spiraling housing crisis. Former President Barack Obama said in his speech at the Democratic National Convention, “If we want to make it easier for young people to buy a home, we need to build more units—and clear away some of the outdated laws and regulations that made it harder to build homes for working people in this country.”
Vice President Kamala Harris made similar statements in her own speech to the DNC, vowing to “end America’s housing shortage.” In North Carolina a few days earlier, Harris said, “In many places … it’s too difficult to build, and it’s driving prices up … We will take down barriers and cut red tape, including at the state and local levels. And by the end of my first term, we will end America’s housing shortage by building three million new homes and rentals that are affordable for the middle class.”
Without solving the underlying shortage, regulators and prosecutors will always be chasing the bad actors.
YIMBYs had already been gradually winning the argument in the lower levels of the Democratic Party before Obama and Harris came aboard. And not only Democrats have embraced this agenda. In fact, YIMBY legislation at the state level in Montana, Washington, and even California passed in large part due to Republican votes, sometimes when Democrats could not provide the votes to pass it in state legislatures where their party was in the majority.
Yet despite these successes, there is a long way to go toward changing the patterns of land use and housing markets in most of the country’s cities and states. Housing costs remain high, and only a handful of locations have implemented the true YIMBY agenda of making it legal to build the housing that people want to rent or buy.
Harris’s defeat in the November election is unlikely to cause Democrats to turn away from a YIMBY agenda. Instead, state and local Democrats will need to double down on housing abundance in order to address cost-of-living concerns, as well as stop the loss of voters fleeing high-cost blue states for low-cost red states.
Supply and Demand Matter
At the heart of the YIMBY argument is the recognition that decades of deliberate policies to limit the supply of housing have caused housing to become scarce and expensive. YIMBYs believe that elected officials can end the affordability crisis by changing housing laws at the state and local level to enable more homebuilding.
In January, Sen. Elizabeth Warren (D-MA) explained the simple logic behind this conclusion. “America is in the middle of a full-blown housing crisis. There are a lot of ways to measure it, but I’ll start with the most basic: We are 7 million units short of what we need to house people. What can we do? Increase the housing supply. It’s plain old Econ 101.”
Evidence from cities that have made it easier to build new housing bears out Warren’s statement. Minneapolis is a notable example. Since 2009, the city has pursued many policy proposals core to the YIMBY agenda: making it easier to build multifamily housing, eliminating parking minimums, allowing taller buildings near transit stops, and more. This work culminated in Minneapolis 2040, which eliminated single-family zoning across the city.
As a result, Minneapolis built more housing and stopped the relentless rise in rents and prices. According to Pew, “From 2017 to 2022, Minneapolis increased its housing stock by 12% while rents grew by just 1%. Over the same period, the rest of Minnesota added only 4% to its housing stock while rents went up by 14%.”
Austin, Texas, is another supply success story, with rents falling 9.5 percent between June 2023 and June 2024. While other Sun Belt cities saw rents decline, Austin’s was the largest drop, and market observers attributed it to new supply.
These supply-driven declines also help contextualize monopolistic practices that capitalize on a housing shortage. In August 2024, the U.S. Department of Justice sued RealPage, a consulting and software firm that allegedly violated antitrust laws by collecting competitively sensitive data from all landlords within a metro area and feeding it into algorithms to fix rent prices higher. “Americans should not have to pay more in rent simply because a company has found a new way to scheme with landlords to break the law,” said Attorney General Merrick Garland when filing the suit.
Most YIMBYs support enforcing the law against bad actors. YIMBYs also point out that housing shortages empower these illegal practices, and that RealPage is preying on, not causing, a housing crisis. Without solving the underlying shortage, regulators and prosecutors will always be chasing the bad actors, rather than preventing it in the first place by building more homes.
Sometimes these bad actors will openly admit that their profits depend on a lack of housing supply. Blackstone, one of the nation’s largest private equity owners of rental housing stock, routinely uses the housing shortage as a selling point to its investors.
The Blackstone Real Estate Income Trust (BREIT) touted on its own website in late October 2024 that “new construction starts in our key sectors are near 10-year lows, which we believe positions BREIT well for the future.” They cited a 39 percent decline in new multifamily construction starts since 2022 as further evidence. When housing is in short supply, they can charge more rent and pass along the profits to their investors. More supply, however, threatens their bottom line.
Supply, demand, and illegal price-fixing are well known to anyone who has had to evacuate their home to escape a hurricane. The supply of hotel rooms and gasoline along the interstate that leads away from the storm zone is limited. There are always more evacuees than there are hotel rooms to accommodate them. Anyone price-gouging should be prosecuted, but that’s cold comfort to the tired family that already had to keep driving when they couldn’t afford a place to stay.
Governments can’t predict with certainty where hurricanes will strike in the future. But they can easily predict the locations of housing demand, and can proactively meet it with new supply.
The Revolution Won’t Save Us
Critics of the YIMBY movement often charge that the real problem is that housing has become a commodity, rather than a human right, and that new supply will simply be commodified into unaffordability. The experience of Minneapolis and other cities described above suggests that new supply really does help housing become more affordable. Yet the experience of the Soviet Union, where housing was a human right, shows that supply and demand still exists outside of capitalism, and that a housing crisis will still result when supply is inadequate.
When an item is in short supply, access to it will be rationed somehow. In capitalist countries, it is rationed by ability to pay. In the Soviet Union, it was rationed by access to power and privilege. According to a recent study of Soviet housing policy, “demand greatly exceeded supply. As a result, price rationing was replaced by waiting lists and administrative decision-making.”
Anyone connected to political power, such as Communist Party members, or workers in industries like defense that were prioritized by the government, could find housing for their families. Workers in industries that did not receive priority, such as consumer goods, were put on wait lists of ten years or more. In the meantime, Soviet workers were housed, and they did not live on the streets. But they often lived one family to a bedroom in a two- or three-bedroom apartment, in substandard and dilapidated conditions.
With demand outstripping supply and the absence of a formal market, informal and illegal ways of obtaining housing spread rapidly. Bribery, threats, and other forms of corruption were common.
Not until Nikita Khrushchev took power in the 1950s did the Soviet Union embark upon a major housing construction effort. But this did not fully meet public demand. The lack of housing eroded public confidence in the Soviet system, particularly in Eastern Europe. Families looked to the capitalist West and saw housing abundance, at least in the 1970s and 1980s.
When he became leader, Mikhail Gorbachev pledged to build enough homes so that every family could have their own apartment by the year 2000. But the Soviet Union collapsed and Gorbachev was ousted from power before this could be achieved.
In Whose Backyard?
As YIMBYs increasingly find political and policy success here in the United States, battles continue over where new housing should be built. Opponents claim to support additional housing supply, only “not in my backyard.” For example, NIMBYs in Minneapolis have won injunctions in lower courts against the city’s 2040 plan, though an appellate court lifted an injunction earlier this year.
Nowhere is this battle more deeply contested than California. The Golden State’s housing shortage stems from overtly segregationist policies of the past, including zoning changes in the 1960s and 1970s after the end of legal housing discrimination that made it difficult to build multifamily housing near the coast. As a result, California’s sprawl accelerated, intensifying class and racial segregation.
Priced out of owning or renting homes near coastal job centers in Silicon Valley or Los Angeles, service workers regularly drive several hours every day from inland cities such as Stockton and San Bernardino. Many of these workers are Latino and Black. Those residents who can afford to live near the coast are predominantly white. As the state’s climate heats up, more Californians are unable to afford naturally cooler coastal locations, and are increasingly pushed into hotter, drier regions that are also more vulnerable to wildfire.
“Today, true access to the coast—which also means the opportunity to live on the coast—is very limited unless you are a rich person,” said Assemblymember David Alvarez (D) to The Sacramento Bee earlier this year. Alvarez represents low-income Latino cities in coastal San Diego County, and has become embroiled in a battle with the state’s powerful Coastal Commission over where new housing can be built near California’s beaches.
Alvarez and other legislators, along with groups such as California YIMBY (where I work), have encountered persistent opposition from the Coastal Commission in efforts to make it easier to build low-income and middle-income multifamily housing in the state’s Coastal Zone, even when environmentally sensitive and natural areas are excluded and protected.
Alvarez proposed a bill (AB 2560) that would have allowed developers to build denser, multifamily buildings in the urbanized areas of the Coastal Zone, in exchange for setting units aside for low-income residents. Strong opposition from the Coastal Commission and their allies in the state legislature led Alvarez to withdraw that bill shortly before the legislative deadline this August.
Despite this setback, YIMBYs have won other victories to make it easier to afford living on the coast. In 2024, legislators passed SB 1123, making it easier to build starter homes in existing urban single-family zones. This bill was a top priority of California Community Builders, a BIPOC-led group committed to closing California’s racial wealth gap.
Bills like SB 1123, as well as YIMBY-backed bills that enabled California’s boom in accessory dwelling units—small homes, like a backyard cottage, built on existing single-family properties—are also effective at allowing homeowners, small builders, and others with smaller amounts of capital to add to the housing supply, striking a blow against the monopolization of large-scale homebuilding.
These battles don’t just matter for privately funded development. Restrictive zoning rules in cities up and down California’s coast also limit where publicly funded affordable housing can be built. These restrictions, as well as high permitting fees, also drive up the cost of land and construction.
In July, Sen. Warren and dozens of colleagues proposed a major housing bill that includes reforming the estate tax to fund a federal subsidy for affordable-housing construction. Her bill also includes “incentives for local governments to eliminate unnecessary land use restrictions that drive up costs,” including the costs of building the affordable housing her bill would subsidize.
The YIMBY movement stands ready to help turn bills like this into law, at the federal and state level. But without overcoming zoning codes that limit where this housing can be built, these bills and the strong support for housing supply from Obama and Harris will founder on the same rocks of NIMBY obstruction that created the country’s housing shortage in the first place.
