David Zalubowski/AP Photo
A view of the Rose on Colfax, an affordable-housing community with a co-located child care center in the East Colfax neighborhood of Denver, January 24, 2024.
The YIMBY movement is being touted as a major solution to the shortage of affordable housing. YIMBY stands for “Yes In My Backyard,” the opposite of NIMBY.
YIMBY would alter zoning codes that favor or require single-family housing, to make it easier to free land to build apartments, especially affordable ones, and remove other obstacles. The Prospect recently ran a smart piece by Robert Cruickshank on YIMBY strategies, and our former colleague Matt Yglesias is obsessed by the idea.
I don’t want to throw too much cold water on YIMBY, which can help. But we should be clear that it is only a small part of the solution. The housing shortage is massive, and curing it will take a lot more than YIMBY.
Let’s begin by acknowledging that the era of mass cheap housing after World War II was exceptional, and that repeating those benign economic tailwinds will be impossible.
In those days, the federal government promoted affordable homeownership via cheap VA and FHA-insured mortgages. Even more importantly, federal highway programs opened inexpensive farmland near cities to housing development. Lots that had lately been pastures were dirt cheap, which made the homes affordable. The homeownership rate increased from 43.6 percent in 1940 to 63.3 percent in 1965.
The great suburban migration, in turn, took the price pressure off of rental units in cities. In addition, federal public-housing programs added over a million units of affordable housing. And for good measure, many cities continued the rent control that was enacted as part of WWII price controls. So both rental apartments and owner-occupied houses were cheap.
My father, who had a very modest job, was part of the great postwar suburban migration. I recently looked up the value of the unremarkable three-bedroom, one-bathroom, 1,900-square-foot house that he bought in 1948 for $17,000, thanks to the GI Bill. Zillow says it’s now worth $1.444 million. Buying that house today takes an income of about $300,000, more than what 98 percent of Americans earn.
All the YIMBY in the world is not going to recreate those postwar housing bargains, or the windfalls to the lucky generations that bought in cheap and accumulated net worth—not just by paying off mortgages but via the unearned appreciation in property values. The flip side of those windfalls, or course, is astronomical costs of homeownership for millennials and Gen Z.
What to do? Here are two general principles. And yes, let’s also include some YIMBY without mistaking it for a panacea.
The Las Vegas Principle
You probably remember the famous slogan created by the Las Vegas Convention and Visitors Authority: “What happens in Vegas stays in Vegas.”
My housing policy variant is this: What starts out as social housing stays social housing. Let me explain.
Taxpayers have spent literally hundreds of billions of dollars subsidizing developers to build affordable-housing units, only to have the units drop out of the supply of affordable housing as soon as the developer pays off the mortgage. Sometimes the federal government pays for the same unit three times over—first when the original developer gets the subsidy, again when the government needs to convey it to a new developer after the first developer cashes in, and one more time when the government has to pay for deferred maintenance, since the original developer has no incentive to keep the place in good order.
Housing vouchers under Section 8 are a variation on the theme. They temporarily subsidize landlord-owned apartments for as long as the landlord is willing to rent to a Section 8 tenant armed with a housing voucher. When the neighborhood gentrifies, the landlord is free to kick out the voucher family and rent at market rates to a better class of tenant. All of that past subsidy goes up in smoke, and another unit is lost to the inventory of affordable social housing.
The Low-Income Housing Tax Credit is a third variation on the theme. The government gives tax breaks—another form of subsidy—to developers of low-income housing. But when the initial contract expires, they are generally under no obligation to keep the housing affordable.
No housing that starts out as government-subsidized social housing should ever be converted to market-rate housing.
What these abuses have in common is that government relies on private developers to provide social housing. It would be better if government or nonprofit owners built and owned the social housing in perpetuity. If we have to rely partly on for-profit owners, let’s at least have a contractual obligation that the housing can never be sold off for profit and let’s have penalties for failure to invest in maintenance. The first-best would be to stop relying on for-profit developers for social housing at all.
A lot of affordable housing is government-subsidized via forgone property taxes. Much of this inventory also drops out of the social-housing stock because the original deal lacks the contractual or regulatory requirements to keep it affordable once gentrification sets in and the developer can make more money selling it off.
I spent the first five years of my life in one such housing project: Parkchester in the Bronx. Parkchester was developed by MetLife in 1940–1942. It was affordable because the New York City government agreed to forgo property taxes.
Parkchester was one of three such projects, the other two being Stuyvesant Town and Peter Cooper Village in Lower Manhattan. Together they provided about 23,000 housing units. The target population was lower middle-class. My parents paid about $40 a month.
As the housing shortage deepened and Lower Manhattan became fashionable, most of Stuyvesant Town and Peter Cooper Village were sold to investment companies and converted to market-rate housing either as condos or as rentals. If you want to rent a humble one- bedroom, one-bathroom apartment in Stuyvesant Town, it will cost you about $4,700 a month.
By the usual rule of thumb of spending one quarter of your income on rent, you’d need to be earning well over $200,000 a year to live there—more than the incomes of 85 percent of New Yorkers. And this was supposed to be housing for the lower middle class, developed with taxpayer subsidies.
Due to the luck of Parkchester bring located in the far less fashionable East Bronx, Parkchester is still owned by a nonprofit. A similar apartment there will cost you about $1,600.
Thus the Las Vegas rule: No housing that starts out as government-subsidized social housing should ever be converted to market-rate housing. We can’t do anything about the affordable housing that has been lost, but as government spends tens of billions a year to subsidize affordable housing, we can at least keep it affordable going forward.
Transportation Policy as Housing Policy
New York City recently made headlines when the city council passed a law that will allow the development of some 82,000 new units of affordable housing at a cost of $5 billion. Keep that $5 billion number in the back of your mind.
In fact, counted in that 82,000 figure are proposed conversions of basement apartments, often from illegal to legal. Since tens of thousands are already occupied, the net number of new units is probably a lot lower.
How else might we spend $5 billion to increase access to affordable housing? If you look at maps of major metropolitan areas, you will see incredible bargains in the prices of homes and apartments that are just out of commuting range. For instance, Worcester, Massachusetts, 40 miles west of Boston, has a huge supply of affordable housing. The median home price is about $442,000, which actually declined by about 5 percent in the past year. In Boston, the median home price is a staggering $950,000.
Because of the antiquated rail system, the fastest commuter train between Worcester and Boston takes more than an hour and a half each way. There is just one early-morning train, leaving Worcester at 7:10 a.m. and making 17 stops before reaching Boston. There are no express trains. Not surprisingly, few people live in Worcester and work in Boston. Housing is even cheaper in Springfield, 51 miles west of Worcester, and the rail service is even worse.
By contrast, Providence, Rhode Island, which is 61 miles from Boston by car, has a high-speed Amtrak express. You can get from Providence to Boston on Amtrak in as little as 34 minutes—an easy commute. But it will cost you about $50 each way on the Acela express.
Housing is a lot cheaper in Providence ($449,000 median) than in Boston, but at $100 for the daily round-trip commute, your expenses would be well over $2,000 a month. If your housing budget is, say, $4,000 a month, that’s still worthwhile since your money goes a lot further in Providence. But it’s mostly affluent professionals who live in Providence and commute to Boston.
So it’s not enough to build better commuter rail to outlying cities and towns. Commuting also needs to be affordable. But the marginal dollar invested in convenient and affordable commuter rail may well produce more housing options than the marginal dollar invested in housing.
Remember that $5 billion figure as the cost of building 82,000 new affordable-housing units in New York? There are a lot more than 82,000 affordable-housing units on the corridor between Boston, Worcester, and Springfield. As it happens, there is a plan on the drawing board that would extend high-speed commuter rail to Worcester and Springfield. The cost? Between $2.6 and $4.6 billion.
Massachusetts has also just completed a long-awaited billion-dollar South Coast Rail project to facilitate commuting between the depressed city of New Bedford and Boston. Housing in New Bedford is cheap. Rail service will begin next spring. The ride still takes too long at 90 minutes each way, and there are no express trains. But it’s a start, and there are closer-in towns with affordable housing along the way.
Beyond these strategies, we need massive federal investment in permanent social housing, of various kinds.
YIMBY 2.0
Where does YIMBY fit into all this? It’s a great concept, but it often runs into fierce local opposition. In 2021, the Massachusetts legislature passed an admirable law called the MBTA Communities Act. It required some 130 communities with mass transit service to revise local zoning laws to allow more multifamily housing. Not affordable housing, mind you; just multifamily housing. The goal was to create 20,000 to 40,000 housing units.
But in many of these leafy suburbs, the voters and their elected officials resisted, tossing out zoning plans or tying them up in court. They didn’t move to suburbia to have their towns clogged with apartment buildings, which might bring unruly kids, congestion, and even more minorities.
In Braintree, which has overbuilt shopping malls, the local planning board and a developer proposed a creative low-rise complex of some 500 market-rate apartments on an abandoned giant parking lot that is a local eyesore. This prompted a mass voter revolt, though a more modest version, with more units for the harmless elderly, may yet go forward.
To get YIMBY strategies to work, we don’t need better planners. We need better voters.
