February 07, 2017

When Do Renters Behave Like Homeowners? High Rent, Price Anxiety, and NIMBYism

Michael Hankinson

A common root of political opposition to new housing development is spatial proximity or NIMBYism (`Not In My Back Yard’), where individuals may support new supply in general but not near their own home. Homeowners are traditionally associated with this risk averse behavior, while renters are assumed to be less responsive to a building’s spatial proximity. However, using both national experimental data and cityspecic behavioral data, I show that renters living in expensive cities both express NIMBYism towards market-rate housing at a level similar to homeowners, while also still supporting an overall increase in their city’s housing supply. This conflict of supporting housing citywide, but not in one’s neighborhood rejects a collective action problem based on spatial proximity. When paired with institutional changes that amplify the influence of local opposition to new supply, renter NIMBYism helps to explain why housing has become increasingly difficult to build in cities with high housing prices.

Category: Working Papers

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