Thursday, December 17, 2015

Who Controls the Pace of Development in American Cities?


Daniel Hertz summarizes some recent research (by property prof Vicki Been) on the Growth Machine v. Homevoter Hypothesis explanations for urban development.  New studies show the overwhelming power of "homevoters" in their attempt to protect/increase their home prices:

There are two big theories about who controls the pace of development in American cities and suburbs.  One is the “growth machine.” In this telling, developed by academics like Harvey Molotch in the 1970s, urban elected officials and zoning boards are highly influenced by coalitions of business and civic leaders interested mainly in economic growth and maximizing the price of the land they own.

The other, developed later by the economist William Fischel, is the “homevoter hypothesis.” Fischel argues that real power . . . is held by homeowners, who are also interested primarily in maximizing the value of their property: their homes.

These two theories closely track two of the major camps in the debate about what’s wrong with American housing policy. If you believe in the growth machine . . . you’ll probably believe that US cities suffer from too much development, pushed on an unwilling populace by a profit-driven elite for whom zoning and planning is an inconvenience at most.  If you’re in the homevoter camp, conversely, you’re likely to think that the problem is too little development, as NIMBY homeowners scare local elected officials into blocking any housing development that might compromise their property values . . . .

[...] A study published last year from Vicki Been, Josiah Madar, and Simon McDonnell of NYU took a crack at pitting these theories against each other to see which did a better job of explaining zoning changes in New York City from 2003 to 2009, under former mayor Michael Bloomberg.

[...] Well, in every case where the evidence clearly points to one theory or the other, the winner is the homevoter hypothesis. Homes near high-performing schools—sources of great value to which Fischel says homeowners pay particular attention—were overwhelmingly more likely to have their maximum density reduced, rather than increased, as developers and business interests would surely prefer. Neighborhoods with rising demand, similarly, tended to see more anti-development zoning, to the extent that a growing population tended to lead the government of New York City to allow fewer homes to be built. Very white neighborhoods were particularly likely to see density caps lowered.

These outcomes are all the more stunning because of where and when they took place: New York City under Michael Bloomberg, which, again, is one of the very last settings you would expect to find “homevoters” in charge of development.

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