Opinion | How NIMBYISM chokes off affordable housing even in Big Sky Country
We often hear about the fading dream of homeownership for millions of Americans — especially young people hoping to raise a family — in New York, Los Angeles and other major cities. But the problem extends from coast to coast, with Missoula as a telling example of why there simply aren’t enough houses to meet demand. The shortage drives the cost of existing homes to levels that are prohibitive for countless low- and middle-income Americans.
The shorthand explanation for the housing crunch is not-in-my-backyard NIMBYISM, but the political instrument that makes such hostility effective has a more prosaic description: strict local zoning regulations.
President Biden’s recently announced Housing Supply Action Plan reflects a growing political consensus that an intervention is needed. People of all political stripes can unite around pro-housing reforms to give landowners more freedom to build new homes where they are needed most.
The Biden administration’s housing plan calls the lack of available and affordable land through exclusionary zoning regulations, such as minimum lot area requirements, parking mandates and prohibitions on multifamily housing, as “one of the most significant issues constraining housing supply.”
Biden echoes points made by President Donald Trump in a 2019 executive order that called strict local and state zoning regulations “the leading factor in the growth of housing prices.” And before Trump, President Barack Obama developed a tool kit in 2016 that said “local policies acting as barriers to housing supply include land use restrictions that make developable land much more costly than it is inherently.”
Exclusionary zoning practices reserve vast portions of cities for single-family homes and prohibit building denser multifamily homes, such as duplexes and triplexes, that are more affordable by design. Other regulatory layers drive up building costs and can effectively prohibit multifamily homes when the requirements (see minimum lot areas and parking mandates above) can’t be met in the existing space.
In emerging housing markets such as Montana’s, we are seeing the pain caused by exclusionary zoning firsthand. A pandemic property gold rush coupled with low housing inventory has pushed median home list prices in some of the state’s fast-growing cities over $800,000. The organization I lead, the free-market Frontier Institute, recently published a Montana Zoning Atlas report on how exclusionary zoning worsens the housing shortage: More than 70 percent of primary residential areas in Montana’s most in-demand cities either outright prohibit or penalize affordable multifamily housing development.
While there is no silver bullet that will resolve the housing crisis, pro-housing regulatory reforms would go a long way toward expanding the supply of homes. The small city of Helena, Mont., took this approach in 2020, abolishing minimum lot area requirements and restoring landowners’ right to build townhouses and duplexes by right throughout all residential areas. These changes may be one factor keeping the median home list price in Helena relatively affordable, at $470,000, compared with high-growth Montana cities that have strict exclusionary zoning, such as Bozeman, where the median home list price is $849,000.
Unfortunately, local governments have historically been resistant to such change. NIMBY-driven homeowner movements can drive formidable political opposition to proposals allowing denser development. Multifamily housing projects are shot down after outcry from existing homeowners in a neighborhood. Perhaps due to this political influence, many local government officials still don’t seem to believe regulatory reform is part of the solution, preferring instead to focus on measures such as rent control or increasing funding for housing-assistance programs.
Biden’s Housing Supply Action Plan will leverage federal grant funding to entice skeptical local governments into reforming exclusionary zoning codes. Cities that give landowners freedom to build denser, more-affordable homes to meet the needs of low- and middle-income residents will be rewarded with higher scores in existing federal grant processes.
It will be fascinating to see whether federal incentives will be enough to prod stubborn local governments into action on zoning reforms. If civic leaders see grant dollars flowing to nearby cities and towns undertaking reforms, that might have a galvanizing effect.
Let’s hope so. Any sign of movement toward addressing America’s housing shortage would be welcome. But these daunting regulatory barriers took decades to construct and will require years of significant rollbacks if the American Dream of homeownership and individual prosperity is going to be restored.
That goal is one where people on the left and the right can find common cause. They just need to set aside the NIMBY temptation and press local politicians for responsible reform that will allow their fellow citizens a fair shot at homeownership.