Many left-leaning urbanists* try to prevent the perceived injustices from gentrification through an unrealistic combination of goals and means.

The trilemma that many city-dwelling progressives face in urban policy comes down to wanting three things that cannot simultaneously exist: 1) Maintenance of city charm via restrictions on building and construction; 2) Affordability; 3) Maintenance of existing neighborhood ‘character’ and demographic identity.

I’ll go into a little more detail on all three before proceeding:

  1. San Francisco maintains its charm by having short historic buildings that don’t give the feeling of congestion or block the sunlight. Paris keeps that cutesy feeling by not allowing building above the Eiffel Tower in the bulk of the city. If either of these cities became dominated by tall/ugly/modern condominiums, residents and visitors wouldn’t enjoy them as much.
  2. People from all ends of the socioeconomic spectrum should be allowed to access the amazing advantages cities have to offer, from jobs to ideas to cultural experiences.
  3. Neighborhoods that have served particular groups (ethnic, religious, socioeconomic) should be protected from an invasion of yuppies that threaten the existing neighborhood character because of their ability to pay much higher rents and shift demand to different business establishments.

So let’s start with the premise that policy should generally make a neighborhood safer, more beautiful to walk through, and easier to get around. Or at least, if these things happen we shouldn’t stop them. The desirability to live there will increase. An increase in desirability means an increase in demand. If this is not met with an increase in the supply of places to live or work, rents and property values will go up. This is supply and demand, and those laws have not been repealed.

Policies that maintain bullet point 1 take the form of construction regulations, height restrictions, and Floor Area Ratio laws. No one wants a billboard, casino, or ugly condo blocking a great view of the Washington Monument. Shorter buildings allow more sunlight, fresher air, better vibes. Historic buildings look nicer. So almost all cities put in place limits on the type and height of construction. The whole point of these laws is to make it harder to build. Often their stated intention is often to just give oversight to the process so that the community has a voice in what’s being built. But it’s fair to say that these are more restrictive than just a typical paperwork formality. As San Francisco has exploded in popularity, supply has not kept up. So what would we expect to happen to price?

Bullet point 2 is a goal all cities should aim for. Cities are tremendous sources of ideas, culture, and professional opportunities that everyone should have access to. When rents and property prices are too high, only those who start off with a high income can afford to access the amazing parts of cities. Social mobility decreases, productivity suffers, and innovation declines. People now settle to live in places they can most afford, not in places where they are most productive. This is bad.

Bullet point 3 is one of the trickier parts to maintain. The character of a neighborhood – including its desirability and hence property prices – do not stay static over time. The Upper East Side is oddly becoming one of the more affordable Manhattan neighborhoods below 95th street while Chelsea is solidifying its spot as one of the most expensive. 40 years ago? The roles were switched. Should policies really be focused on stopping the unpredictable dynamism of city culture? What if SoHo was legislated to stay as a garment district or the Meatpacking District as a meatpacking district? Everyone seems to want the mom-and-pop sandwich shop that’s been there for a hundred years over the boring chain, but who’s to say laws should determine which preferences should prevail?

What about rent control? The flaws in these policies are well-documented, so I’ll just give a quick rundown. Just as price controls caused long lines at gas stations in the 70s, rent control’s main effect is to cause a shortage of housing. Those that are lucky enough to get in rent-controlled buildings are drastically outnumbered by those that do not. Cities like Stockholm or Copenhagen that have a decent amount of rent control can have waiting lists of up to eight years (!) – of course, that’s unless you know the right person or are politically connected. Rent control pushes the air in the balloon to the other side of the balloon. The remaining properties become even more in demand and more unaffordable. In addition, rent control can incentivize building owners to sell on the buyers’ market rather than the renters’ market. When this happens, the supply of housing available for rent goes even further down. Rent control has also been proven to lead to inefficiently maintained buildings – landlords will only keep the apartments up to the quality the price determines they should.

What I want to scream from the rooftops to those disappointed with the results: do you expect these neighborhoods to stay exactly as they are forever and always, with affordability staying the same? If a neighborhood ‘improves,’ why do you think it will not get more expensive unless you allow for more building? No one wants a casino, billboard, or ugly condo in their backyard. But peeps gotta live somewhere!

The unfortunate political equilibrium is that those with any political voice in cities are the ones who already live there. They want to keep their property prices high, their views undistorted, and their neighborhoods just as they are. They are fine with change, and would never call themselves that dirty word ‘conservative,’ but they’d rather it be Not In My BackYard. The large swath of people who would love access to the Bay Area’s treasure trove of ideas, cultural capital, and jobs don’t vote on the laws in those towns because they don’t live there.

I’ll state the obvious admission that I am the white yuppy people say is ‘the problem’ when it comes to gentrification. I know that when I talk about neighborhoods changing, I am much more likely to be the beneficiary than the person kicked out. But I still stick to my guns that city-dwellers need to accept a) things change, and not always in a way that is immediately pleasing; b) as the benefits of living in a city continue to increase WE NEED TO BUILD MORE.

 

*For the record, regardless of whether people identify as left- or right-leaning, I think the majority of people living in cities engage in NIMBYism and want to keep their settings the way they are. It’s just kind of human nature. I chose to pick on ‘progressives’ here because they especially emphasize the desire to stop gentrification and increase housing affordability.

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