#211 – Sam Bowman on why housing still isn’t fixed and what would actually work

Rich countries seem to find it harder and harder to do anything that creates some losers. People who don’t want houses, offices, power stations, trains, subway stations (or whatever) built in their area can usually find some way to block them, even if the benefits to society outweigh the costs 10 or 100 times over.

The result of this ‘vetocracy’ has been skyrocketing rent in major cities — not to mention exacerbating homelessness, energy poverty, and a host of other social maladies. This has been known for years but precious little progress has been made. When trains, tunnels, or nuclear reactors are occasionally built, they’re comically expensive and slow compared to 50 years ago. And housing construction in the UK and California has barely increased, remaining stuck at less than half what it was in the ’60s and ’70s.

Today’s guest — economist and editor of Works in Progress Sam Bowman — isn’t content to just condemn the Not In My Backyard (NIMBY) mentality behind this stagnation. He wants to actually get a tonne of stuff built, and by that standard the strategy of attacking ‘NIMBYs’ has been an abject failure. They are too politically powerful, and if you try to crush them, sooner or later they crush you.

So, as Sam explains, a different strategy is needed, one that acknowledges that opponents of development are often correct that a given project will make them worse off. But the thing is, in the cases we care about, these modest downsides are outweighed by the enormous benefits to others — who will finally have a place to live, be able to get to work, and have the energy to heat their home.

But democracies are majoritarian, so if most existing residents think they’ll be a little worse off if more dwellings are built in their area, it’s no surprise they aren’t getting built.

Luckily we already have a simple way to get people to do things they don’t enjoy for the greater good, a strategy that we apply every time someone goes in to work at a job they wouldn’t do for free: compensate them.

Currently, if you don’t want apartments going up on your street, your only option is to try to veto it or impose enough delays that the project’s not worth doing. But there’s a better way: if a project costs one person $1 and benefits another person $100, why can’t they share the benefits to win over the ‘losers’? Sam thinks experience around the world in cities like Tel Aviv, Houston, and London shows they can.

Fortunately our construction crisis is so bad there’s a lot of surplus to play with. Sam notes that if you’re able to get permission to build on a piece of farmland in southeast England, that property increases in value 180-fold: “You’re almost literally printing money to get permission to build houses.” So if we can identify the people who are actually harmed by a project and compensate them a sensible amount, we can turn them from opponents into active supporters who will fight to prevent it from getting blocked.

Sam thinks this idea, which he calls “Coasean democracy,” could create a politically sustainable majority in favour of building and underlies the proposals he thinks have the best chance of success:

  1. Spending the additional property tax produced by a new development in the local area, rather than transferring it to a regional or national pot — and even charging new arrivals higher rates for some period of time
  2. Allowing individual streets to vote permit medium-density townhouses (‘street votes’), or apartment blocks to vote to be replaced by taller apartments
  3. Upzoning a whole city while allowing individual streets to vote to opt out

In this interview, host Rob Wiblin and Sam discuss the above as well as:

  • How this approach could backfire
  • How to separate truly harmed parties from ‘slacktivists’ who just want to complain on Instagram
  • The empirical results where these approaches have been tried
  • The prospects for any of this happening on a mass scale
  • How the UK ended up with the worst planning problems in the world
  • Why avant garde architects might be causing enormous harm
  • Why we should start up new good institutions alongside existing bad ones and let them run in parallel
  • Why northern countries can’t rely on solar or wind and need nuclear to avoid high energy prices
  • Why Ozempic is highly rated but still highly underrated
  • How the field of ‘progress studies’ has maintained high intellectual standards
  • And plenty more

Video editing: Simon Monsour
Audio engineering: Ben Cordell, Milo McGuire, Simon Monsour, and Dominic Armstrong
Transcriptions: Katy Moore

Highlights

Rich countries have a crisis of underconstruction

Sam Bowman: I think the main thing that I’m interested in is, A, why is it that almost every Western developed country has stagnated? And B, what is the relationship between that and our seeming inability to build almost anything? I think that the fact that we don’t build much anywhere — especially in the UK, especially in places like California, New York, large parts of the US (although not all of the US) — I think that’s a really important factor in this sort of broader stagnation.

And I don’t just think it’s related to economic growth; I don’t just think it’s related to innovation rates appearing to slow down. I think that it’s also related to the fact that birthrates are falling, climate change is worse than it could be. There are other things — like obesity, and our health is worse than it could be. My view is that not building enough houses in particular — but also transit infrastructure, and in some cases energy supply, is really important in causing that.

And the reason that I’m optimistic about this stuff, and that it kind of compels me to keep going, is that I think all of this is really eminently solvable. It’s not a technological problem; it’s really a political problem, and it’s really an incentives problem. And maybe that’s what we can talk about today.

Rob Wiblin: Yeah, absolutely. I think most listeners, maybe a great majority of listeners, will be familiar with issues around NIMBY, and difficulty getting permissioning to build housing and to build other kinds of things in the US and UK. So we’re mostly not going to focus on the nature of the existence of the problem. We’re going to spend most of our time thinking about creative solutions, given that people have been aware of this issue for some years, maybe for some decades, and it hasn’t yet been solved. In some ways, we haven’t made nearly as much progress as we might like or would expect to happen.

Rob Wiblin: But let’s at least start by talking about how large the scale of the problem might be, to give people a sense of just how much harm might be getting caused here. Because you can understand that there’s a problem, but maybe not appreciate just the full range of damage that’s being done. So what are some of the harms that have come from restrictions on housing construction, in particular the US and UK, that you detail in “The housing theory of everything”?

Sam Bowman: So while the UK and the US have, in some places, very similar problems, on a nationwide level, they actually have quite different problems.

The UK pretty much has everything in one city. London is 10 times larger than the next largest city in the UK. It’s basically everything in one: it’s the political centre of the country, the financial centre, the economic centre. Most of the major industries in the UK are centred on London. So when London has a problem, Britain has a problem.

Now, contrast that to the United States: the US is much larger, obviously. It’s about five or six times larger by population. It has lots of very large cities. It has two really outstandingly important cities, from an economic point of view — maybe three, depending on how you count — which are New York, Los Angeles, and the San Francisco Bay Area. San Francisco by itself is too small to count, but the San Francisco Bay Area, which is lots of cities around the Bay put together, I would say probably do count.

Now, those places have huge problems getting things built, but in most of the rest of the United States, there aren’t nearly as strong of problems with getting things built, especially actually getting housing. So 80% of US cities do not have a big gap between the cost of building houses, at least in some parts of the city, and the price of selling houses.

And that’s a measure I’m going to use again and again, because it’s a really useful way of using the price system to kind of estimate the regulatory constraint. So just to repeat: what I’m saying is the cost of building a house might be something like $150,000 or $200,000. Then how much you can sell the house for might be, depending on where you are, anything from around say, $200,000, $250,000 all the way up to $1 million or $1.5 million.

That gap is a really good proxy for regulatory barriers to building, because if those barriers weren’t there, then people would just build until the price came down and they made lots of money.

So in 80% of US cities, there are at least places in the city where that gap does not really exist. It’s a very small gap and you can probably explain it just through normal kind of economic frictions. That gap is huge in places like San Francisco, it’s very large in LA, it’s very large in most of New York. It’s absolutely enormous in London: in some parts of London, the gap is a factor of four or five: you can sell a house for four or five times more than it would cost to build.

The UK builds shockingly little because of its planning permission system

Sam Bowman: The number of flights going in and out of Heathrow has not risen since 1990. The number of people has, because we’re using bigger aeroplanes, but the number of flights hasn’t risen. This is because we haven’t built another runway and we’re at capacity.

We haven’t built a reservoir since 1992. Maybe I’m being a bit glib here, but they’re like the easiest bit of infrastructure to build. They’re ultimately a hole in the ground with water in it. We have all built reservoirs at the beach — and they’re slightly more complicated than that, but they’re not that much more complicated than that. And reservoirs really should be kind of positive for local people, like a lake. The existing reservoirs we have are tourist attractions in some cases, because they have water sports and things like that on them. And yet we haven’t built one since 1992.

The nuclear reactor at Hinkley Point C that we’re building is going to be the most expensive nuclear reactor by megawatt ever built in the world. The new one that we’re building at Sizewell C is estimated to not be quite as expensive as that, but it’s still going to be far more expensive than any other reactor we had built in the UK, up until the 1990s when we stopped building them.

The final example that I think is really powerful is there’s a tunnel that people want to build under the Thames. It’s called the Lower Thames Crossing. This would join up Kent and Essex, and would allow the two largest seaports in England to have road haulage between them — so really economically valuable.

This tunnel has not begun construction yet. It’s been in public consultations for the last seven years. The planning document that has had to be produced for this tunnel has run to 360,000 pages, and the cost of producing the planning documentation has been £297 million. That is double what it cost Norway to build the world’s largest road tunnel — not the planning application, but actually to build the world’s largest road tunnel.

So we have a situation where the cost of permitting, of approvals, has risen way out of proportion to the value that we’re getting from it. And that, we argue, is one of the really big blockers to the investment and to the building that the UK needs.

Overcoming NIMBYism means fixing incentives

Rob Wiblin: I think most attempts to overcome this NIMBY issue have basically tried to go in the front door: you get a central government that says, “Look, I understand that you don’t want to have this thing in your area, but it’s necessary for the country. It’s terrible that we’re not constructing housing. Look at all the problems, this litany of issues that’s creating there. So we’re just going to basically force you to do it with targets, or we’re going to take away your right to object.” This typically has produced poor results. Why is that?

Sam Bowman: Probably for two reasons. Targets fail in the same way that targets in the Soviet Union failed when you would say to a shoe factory, “Produce 38,000 shoes,” and they’d make 38,000 left baby shoes. And every time you try to make it more precise, people just get some way to evade or to minimise the burden of the system. So local authorities, when they have targets, will tend to assign housing away from existing populations — far from where the amenities are, where the shops are, where the roads are, things like that. So you get fairly low-quality housing when you use housing targets. That’s one problem.

Much more important, I would say, is that because you haven’t fixed the underlying incentives problem, a government that does try to do a radical upzoning will face very significant political objections — because they haven’t actually made more housing in the interests of the people who live near the new housing, so those people will fight it.

And even if a government does bravely manage to get something over the line and spend tonnes of political capital, it can be repealed. We’ve just seen in New Zealand that the previous Labour government was voted out partly on the basis of a very bold upzoning. I’m actually quite impressed, but the new government has repealed in some senses the old approach, but has also brought in very pro-housing measures — partly because they have an incredibly good housing minister, the new New Zealand government, but that’s very unusual.

In Croydon, in south London, the local government passed a rule basically allowing individual homeowners to densify their plots. It was repealed a few years later after that government was voted out and the opposition Conservatives were voted in.

Many, many of these things are either impossible to get in because they don’t actually change the incentives, or once they get in, they’re very non-durable — they’re very easy to reverse. So the result is that most governments just won’t try — very rationally, I think very reasonably.

I think the only way to do this durably is to buy in residents to new housing, so that residents want new housing to be built. And we can talk about some examples of that; there’s one really interesting example from Israel. Doing that, I think, is the key to unlocking this. And there are ideas in process, somewhere between ideas and reality, in the UK, in the US — but I think the key is changing incentives, so that people want housing to be built near them, and then lots of the other problems go away.

NIMBYs aren't wrong: they *are* often harmed by development

Rob Wiblin: Why do these folks think that they’re going to be harmed by these projects? By construction of housing, by construction of other infrastructure?

Sam Bowman: Often they will be. It would be great if new infrastructure and new housing was only a net benefit. But lots of good things, like new infrastructure and new housing, have some negative externalities: they impose some costs on people around them.

I live on a pretty busy road. I own a house. The road is quite loud. The more road users there are around me, the louder that road will get. Now, that doesn’t mean you shouldn’t add more people. I think you should. I think you should massively upzone the road that I live on in southeast London. But I will definitely bear a cost from that.

And as it stands, I have one option. The only thing I can do is say, “I don’t want you to build this, because it will make my life slightly worse in a very small way.” Luckily we’ve got double glazing and things like that — so don’t worry, I’m not too badly off.

But almost all the time we are saying that there is a kind of dispersed benefit, where some combination of society as a whole, and the direct users of the new thing — the people maybe who live in the house — will benefit. And a concentrated cost, where local people just get the option of either doing nothing and having their lives made slightly worse, or objecting and maybe avoiding that slight worsening of their lives.

Now, it’s not always the case that these things are net bad. I think often new housing can be a net positive for an area. It brings more amenities, more shops. If there are enough people, it might improve the quality of the local bus route. If you do public services properly, it might mean you get better public services because denser areas can sustain more things.

Rob Wiblin: There can be better jobs; they can be more culturally interesting. There’s a reason people like cities.

Sam Bowman: Absolutely. There’s a reason people like cities. Totally. But also, people like having a garden, people like quiet, people like safety, people like to be able to know that their school is going to be kind of the way it was before. And if they’re comfortable with the area because they’ve moved there, presumably they like it to some extent. They often have a lot that they can lose from it changing.

And frankly, urban areas are generally higher in crime than lower-density suburban areas. That’s a very, I think, important and significant reason that people tend toward — especially in the US, where crime can be really quite random and quite dangerous. I think things like that are very important in understanding why people object to new housing.

I think it would actually be kind of irrational and hard to square with people’s stated behaviour if this was just about property values. You know, there’s a very simple model, a very basic model that says that people own their houses, more supply of housing drives down the price of houses, and so people just don’t want it.

Number one: I think people don’t really act in that way. And number two: I don’t think it would be very rational for them to act in that way. In the same way that I think there would be a kind of overall aggregate productivity benefit to the UK if we built more houses, but it isn’t really rational for any individual to campaign for any individual housing —

Rob Wiblin: It’s a collective action problem.

Sam Bowman: Yeah. And that works both ways, right? The collective action problem also means that there isn’t really an incentive to stop a particular housing development on the basis of national housing policies.

And also, I think it’s not a trivial thing that almost all political parties in every Western country are at least nominally in favour of building more houses. The Labour government in the UK has just been elected on a landslide. One of its major flagship policies has been build more houses. As I’ve mentioned, both of the presidential candidates have at least said some things in favour of building more houses. The Canadian Conservative Party may soon be elected on a platform of building more houses. It’s really hard to square that with the idea that people are just trying to stop houses from being built because they don’t want a national reduction in house prices.

I think much more likely — and much more rational and easy to square with people’s actual behaviour — is that they’re protecting their neighbourhood. They like the quality of life that they get from their neighbourhood. They don’t want it to get worse, they don’t want it to change. And if that’s right, then actually pro-housing advocates may often be making the wrong arguments.

I think there’s a slight tendency to harangue NIMBYs — as I call them, as everybody calls them. And maybe that’s kind of politically incorrect, but I think it’s also good to be clear and use words that people understand. So I will continue to call them NIMBYs, but I don’t think they’re bad people for the most part.

I think that when you frame new housing as a kind of fairness issue, and say, “It’s very unfair: you own your house; it’s very unfair that you’re not letting other people into your neighbourhood.” That doesn’t sound to me like a very compelling reason that I should want to change my mind. That sounds like you’re saying I’m a bad person and that I am going to be made worse off by this, and I don’t want to be made worse off by this.

So I think the challenge is how do we make new housing in the interests of existing residents? Either financially and/or I would say in terms of the effect that it has on the area. I think if we can do that — combined with simplifying the processes for actually approving the houses, and reducing the costs of approving the houses — then we might be able to unlock a huge amount of value.

Street votes give existing residents a say

Sam Bowman: Street votes are a policy that allow the residents of a street to have a vote on the design and density rules of that street. And in doing so, they can opt out of the existing planning or zoning rules, and opt into a system that they control.

To give you an example: If you live on what we would call a semi-detached-house street in the UK, somewhere in outer London, at the moment you basically will find it impossible to build anything more than what is currently on your land — a semi-detached house. Under the street votes policy, you may petition your neighbours to trigger a vote. You need to get, say, 10% of the people on the street to agree that we should have a vote.

Then a series of options can be submitted. Anybody on the street can submit a design code — sort of rules about what the house has to look like. And part of the design code will be a density rule. So can we build up to three storeys or four storeys? Most proposals for street votes involve some kind of hard cap, kind of an arbitrary limit on how high you can build, so that you’re not getting streets building skyscrapers that then overshadow all the neighbouring streets. You want to be able to make sure that the main effect of the decision is borne by the people on the street.

And then they choose. They say, “Yep, these are the ones I’m happy with.” And if a design code passes a threshold — gets, say, a supermajority of 66%+ of the people living on that street — then, in addition to the current rules about what they can build, they also have the option of building the housing that has been voted for them and approved by them through this vote.

Rob Wiblin: So why, in theory, would we expect that this solves the problem?

Sam Bowman: Because the decision is so localised that the people making the decision are also the people who benefit from the surplus, who get to capture the surplus that you get when you get permission to build.

So if you’re in a semi-detached house somewhere in London, let’s say it costs £600,000, £700,000, depending on where you live. If you get permission to build up to say six storeys, the value of the house that you live in and the land that it’s on could rise up to, say, £2 million, because you can build so much more value on that land.

Now, most of the residents probably won’t choose to personally redevelop. They’ll probably sell their land to a developer who will then do infill — which is when you build across the gaps in between houses. Semi-detached houses usually have a little alley, they usually have a parking garage — there’s a lot of not-very-well-used space in between the bits that people actually live on.

A developer that buys, say, five houses in a row can build under this proposal up to let’s say six storeys. And they have to do so according to a design code. As long as the residents have approved that design code, then you can build this. You don’t face any of the other objections to building.

So there’s a win-win: we have turned people’s veto into something they can give away in exchange for the value of their property increasing. So you have a built-in incentive to say yes; there’s a built-in reason, because you are the one that captures the value of the uplift. I think this is really, really powerful. And when we look around the world, there are similar — not identical, but similar — proposals or actually policies that have worked in this way.

But the key mechanism, and you’ve talked about this already, is to take away a situation where all you can do is veto something, and to be able to transact that veto — to be able to not quite sell the veto, but have the ability to give it up in exchange for some of the benefit that would otherwise go to the developer, or the people who get to live in the apartments, or whatever it might be.

We do actually have something that currently exists called estate regeneration, which I think points to the very high takeup that we may see from street votes. Estate regeneration applies to public housing, council housing estates in London that maybe were built in the 1950s or ’60s quite cheaply. They are usually quite cold, quite small, draughty, sometimes unsafe — and really they need to be overhauled. They need to either be significantly improved or replaced.

Now, there have been numerous proposals by private developers to take the estates, to build new apartments — both for the existing residents, and also private apartments to sell and fund the whole redevelopment. This has been done, and was being done throughout the 2010s because huge amounts of central London housing are social housing — up to 40%, 45% in places like Southwark, Lambeth.

Under [London Mayor] Sadiq Khan, a rule was brought in to say that the residents of these estates should have the final say on whether these happen or not. So not just the housing associations that notionally represent them, but the residents themselves should have a vote.

And somewhat unexpectedly, these votes have passed with almost North Korean levels of support. There was a case in a place called Aberfeldy Village, which is not that far from Canary Wharf, where a proposal would have taken 330 homes and added about 1,200 more, giving all of the existing residents bigger, nicer, better apartments — and paid for it all with these 1,200 extra homes. A few of them would have actually been socially rented, but most privately rented. With 91% turnout of the residents, 93% voted in favour of this. And this has actually happened 30 times across London over the last six or seven years.

What this points to is, number one, that this policy by itself is a really powerful way of unlocking really central land for new housing and giving better housing to the existing council of public housing tenants.

But number two, it suggests that in the existing mechanism we’ve got for letting residents vote themselves into higher density and higher quality homes, there’s a huge, huge takeup. And remember that these voters do not get any kind of financial benefit from this; they don’t stand to benefit in any way other than better apartments. Occasionally there’s a slight inconvenience payment, but it’s not like they’re getting a fraction of a million pounds or anything like that — they’re really just being compensated for the hassle of having to live offsite while the new home is built. But there is still this huge, huge takeup of it.

I do think that, by the way, we should sharpen that policy. I think it would be great if residents themselves could initiate those kinds of votes, and in principle kind of declare to developers, “Come to us! We want this to happen.” They can’t do that right now. And also I think that there should be a benefit of the doubt given to residents. If they want something to go ahead, the local council can’t obstruct it on grounds that you’re turning a road into a cycle path or something like that — which has actually happened on a few occasions.

But I think it’s much more important to look at this policy and see both how much more we could be doing with projects like this, and how much existing takeup there is. So we don’t just have to look to Israel today, we don’t just have to look to South Korea in the 1980s and ’90s: we can look at London right now and see that there is a gigantic demand for better quality housing delivered via these kinds of higher supply mechanisms.

It's essential to define in advance who gets a say

Sam Bowman: I think it’s important in advance, before you have a specific project, to define who gets to have a say, and to what extent they get to have a say. Otherwise you’ll get people declaring that they have a big problem with it to be bundled in, and then you get right back to the problem we’ve got right now.

I think one way of thinking about the problem we’ve got right now is that there are different kinds of objectors to things.

There are some people who are going to object to something under any circumstances. You could give them the most beautiful new development, they could become multimillionaires from it, and they will still object because —

Rob Wiblin: They hate change.

Sam Bowman: Yeah, they just hate change. And that’s fine. That’s fine. People are entitled to feel that way.

Most people, if they are immediately around and affected by it, they don’t want it to happen because they’re going to be made worse off under the current regime. But they are reasonable, and they could negotiate, and you could buy them in. And I think it’s important to talk about: they should be able to share in the benefits. It’s really not about bribery. People don’t like the feeling of being bribed. There really isn’t a mechanism like that. And giving cash to people actually doesn’t work at all. People hate the feeling of being given cash. It makes them feel cheap. It makes them feel like mercenaries.

You know, people care so much more about the nature of their area and the feeling of that joint uplift than they do the, “You’ve just cut me a big cheque.” And then the third —

Rob Wiblin: I feel like I would just take the cheque. Sorry, go ahead.

Sam Bowman: Well, you’re an economist. But people just do actually really dislike it. It’s interesting.

Rob Wiblin: It feels dirty somehow.

Sam Bowman: It feels dirty. People, for example, quite like being given cheap or discounted electricity from a new nuclear power plant or new power supply being built near them. That is a thing that works, and that is a thing that happens. The same cash value of just being given a cheque is much less popular. People like the feeling of symmetry and of it not just feeling purely transactional.

But then there’s a third group of people, and I think these are the people who it’s really important to… The real challenge in the design of this type of project is cutting out the third group of people, who are cheap talkers. They’re people who will sign a petition or who will weakly express some kind of objection to something. But if they don’t have a forum to do that and they don’t have a route to doing that, they just won’t care, because it doesn’t affect them directly. It’s like the Instagram campaigning thing.

Rob Wiblin: Slacktivism.

Sam Bowman: Yeah, slacktivism. Like I’ll post a meme on my Instagram story about this and then never think about it again. And the real problem that current decision-making structures have is that it’s impossible to differentiate between those people and the people who have legitimate objections, who will fight tooth and nail.

I think the goal of anything — like street votes, or estate regeneration, or we could imagine something like this for approving new nuclear power stations, or even new runways at airports — the really challenging thing, I think that becomes harder and harder the bigger the project is and the footprint of the project is, because it becomes harder and harder to differentiate between the people who are genuinely adversely affected and the people who say they are — either because it’s easy to, or because if they do, they might get some of this compensation.

And that’s the policy design challenge. I think the street or the block is quite an elegant and intuitively satisfying way of doing it. And empirically, it seems to work the same way that the housing estate seems to work. But were we talking about doing a vote for a new runway at Heathrow Airport or something like that, it would be much more difficult to do. I don’t know that it’s impossible, but I certainly wouldn’t be able to say right here, “It’s this group of people.”

Property tax distribution might be the most important policy you've never heard of

Sam Bowman: It used to be that property taxes were retained locally. So it used to be if a prison was built in your area, or a new factory or something like that, you would pay what are called business rates — just business property taxes — and it would be the local council that would retain that money. So you had competition between local areas to allow these things to be built in their areas then, in the postwar era in the UK.

But this exact process happened in the United States — especially in California, especially New York, in the kind of more liberal states — driven by a kind of sense of equity. Areas that were collecting large amounts of property taxation began to be forced to put some of that property taxation centrally for it to be redistributed to poorer areas. You can completely understand why: the fairness element of it feels very intuitive. But the effect was that in both the UK and in parts of the United States, the incentive to allow more housing and to allow more business premises was eroded.

You know, it even used to be the case that in the US they would sometimes have higher rates of property taxes for new houses. They would call this, I can’t remember, it was something like the welcome tax. It’s sort of ironically named, you know, we’re going to tax you more to build it.

Rob Wiblin: Well, that actually makes sense conceptually, right? Because the existing taxpayers have paid for all of the assets, the accumulated infrastructure that belongs to the local council. Imagine someone who’s going to come in and start benefiting from that. Maybe they should have to pay a bit extra to compensate for all the past investments.

Sam Bowman: Absolutely. There’s a friend of mine named Judge Glock — best name in the world. Judge Glock writes about this, and argues that restrictionary zoning is specifically driven by a free-rider problem that emerges when you don’t have this level of property taxation. When you can’t price new entrants at a higher rate than existing entrants, then you have a situation where people have an incentive to move to areas with good public services — like good schools, whatever it might be — who are not paying their fair share, or who are not compensating the existing residents.

So it might be that apartment buildings pay less overall in property taxation. So you get areas that have good schools, or maybe they’re safe or whatever, and the apartment building is built. You can move there, you can pay less in property taxation, and kind of free ride on the existing services and amenities. And the only thing that the local government can do is use zoning to keep people out and to stop this free riding from going on.

I think that’s a really interesting theory. I don’t think that explains all of the problem by any means, but I think it’s a very interesting part of the story. And in terms of the timeline, it coincides really well with this. It was roughly the mid-1970s that this began to really take force, this kind of movement in law.

Now, I’ve written about it in the UK, and I think this applies everywhere. In the UK, because there is so little local retention of property taxes paid by businesses — and paid by houses, but let’s focus on businesses — it means that new prisons, new nuclear power stations, new data centres just have no real benefit to an area compared to what they could if they paid 100% to the local council and then there was more than 100% compensation — say, a top-up from central government.

So we have some infrastructure, where prisons are a great example. Nobody really wants to live near a prison. Maybe it’s irrational. Most prisons don’t have escapes.

Rob Wiblin: I think it’s understandable.

Sam Bowman: It’s understandable. It used to be the case that prisons would pay so much in property taxation that you would get some benefit: your school would be better or your infrastructure would be better or your parks would be better. Now that is not the case. Now there is really no uplift, or there is very muted uplift, to your local taxation, to the wealth of your local council.

What I’ve suggested is to make sure that the local council can keep all of the property tax bill, top it up from central government, and then hopefully you would get a situation where there was a large enough incentive for local authorities to want these things to be built in their areas.

And I think this is going to be so important as data centres become more and more… I mean, we already need lots of data centres to be built. The problem with data centres is they don’t employ that many people. They tend to be quite ugly. That’s fixable. And although you can, in principle, build data centres in quite remote areas, most of the companies that are building them want them to be built near population centres for reasons to do with servicing them, things like that.

So we maybe are missing… When I talk about street votes and things like that, all this is great. But we shouldn’t forget the basic incentives that local government should have, but doesn’t have — once had, but then had taken away — that we could restore I think fairly easily.

Rob Wiblin: Yeah. I’m slightly worried that people’s eyes will be glazing over as we start talking about different levels of business rates and so on — but hook up, because this could be one of those subtle policy issues that doesn’t really get anyone going, that people barely even know exists, that could just be having an enormous effect on our built environment.

You could imagine arguments in favour of “we should stick it all in a common pot and then distribute it,” or “we should keep it at the local level.” There’s good arguments either way, perhaps. But the effect of taking away all of the business rates, all of the property tax, basically, from developments would be the councils will reject them across the board, basically — because it’s all cost, no benefit to them. You have to compensate them somehow for the additional costs and issues that they’re going to be incurring. Maybe it’s not so obvious on the tin, but it could just be an incredibly important issue.

Sam Bowman: Yeah. And I know that property taxation is boring. Local government is just fundamentally quite dull. So I do get it.

But here’s another way of thinking about this. When we think about not being able to build things, we can get really bogged down in the thousands of pages of rules and reviews that need to take place. We are talking about one of the most insanely complicated systems — and this is true in the US, as in the UK, as in most Western countries, especially English-speaking countries. There’s an unbelievable thicket of problems.

Now, we do need to solve that problem. I would argue that the solution is to create new structures for approving them that are simple. I think we should just cut our losses, declare bankruptcy on the old systems. They just don’t work.

But we need people to fight at a micro level for stuff to get built who are not currently fighting for it. So the reason that I’m so obsessed with changing incentives is that I don’t want to be the only person to want more data centres to be built.

Using aesthetics to get buy-in for new construction

Rob Wiblin: You’ve told me that you think aesthetics is underrated as a way of getting people to go along with stuff. Tell us about that.

Sam Bowman: Yeah, this has been a personal journey for me, because I’m quite a utilitarian person. I do care about aesthetics and I do care about beauty — but I also just love optimisation, and I’m a cold economist at heart.

I have definitely been convinced by people — like my friends Nicholas Boys Smith and Samuel Hughes — that a really underrated factor in why people oppose new housing is that they consider the new housing to be ugly.

There is a very famous study by a guy called David Halpern that asked people on a university campus to rank 10 buildings according to how nice they looked. They got the non-architecture students to rank them, and then got the architecture students to rank them. And the ranking was exactly opposite: the architecture students had literally the exact opposite taste to normal people.

And it’s architects who make most of the decisions, or town planners who are influenced by architects. If it’s true that this is a big factor, then this is a really low-hanging fruit in getting more development: by making the development fit with what normal people want, not what architects want.

Rob Wiblin: Maybe we can’t crush the NIMBYs, but we can crush the architects. They’re a smaller group.

Sam Bowman: Absolutely. Exactly. And there’s a really great piece by Samuel Hughes that talks about architecture being agreeable. He has basically two different kinds of art: art can either be sort of challenging, or it can be easy or agreeable.

Challenging art: you almost always want art to be challenging. If you like music, you almost always want to listen to sophisticated music. You probably wouldn’t have liked it when you were 10 years old. You probably wouldn’t like it if you were just coming to that genre or that artist for the first time. But if you really appreciate that genre, you want the 17-minute-long Appalachian harp song, or whatever kind of black doom metalcore people like. If you’re a fan of literature, you don’t want to just read a Patricia Cornwall novel — you want to read a really great Orhan Pamuk novel or something like that.

And almost always this is OK, because you enjoy these things privately: it doesn’t cost anybody else if you enjoy these sophisticated things that no non-connoisseur would appreciate or get.

The one exception he argues is architecture, which is almost entirely enjoyed or experienced by people who have no interest in architecture, who cannot opt out of seeing this building because they live near it or they walk past it every day or whatever. And yet architecture is no question designed by, designed for, and decided on by people who have sophisticated tastes in architecture.

So when you talk about a new building in the public space, in any public space, you’re almost always witnessing a conversation between architects. And when something looks ugly, you’re almost always looking at very sophisticated people talking to each other in a very sophisticated design language in a way that is often using ugliness as like a part of sophistication.

A lot of modernism generally, like atonal music, is intentionally not meant to be easy to enjoy. That’s the point. And I think it’s kind of one of those things that when you see it, you can never not see it. And you realise that so much of the public space is being designed by people who almost actively want it to be ugly — or ugly to a philistine like me, anyway.

Rob Wiblin: It’s as if we’ve allowed professors of literature to break into everyone’s house and force them to read Finnegans Wake at gunpoint.

Sam Bowman: Yeah. Or like the way Soviet films were often these incredibly avant-garde films, because they were being designed by the most brilliant film students on the planet. But no normal person could enjoy it.

So I think this is a really good insight, a really important insight. It helps to explain why it is that so much of the modern built environment is really not very attractive. And I think there will be some people listening who will say, “I really like brutalism.” Brutalism is the one that everybody focuses on. There are good examples of brutalism, no doubt, but it’s also quite a sophisticated thing to like brutalism. And you don’t say you like brutalism without a bit of you in the back of your head thinking, “I do actually know quite a bit about this, and I am quite clever and I am quite sophisticated.”

Rob Wiblin: Or just like, you know, I could enjoy looking at this occasionally, but do I actually want to live next to this, be looking at it all the time? Don’t you want to feel more comfortable at home than looking at brutalism?

Sam Bowman: Absolutely. But some people do. Some people do. And some people find pastiche really horrible and really ugly. They think it looks like Disneyland, and they think that’s really horrible and bad. That’s fine. Good for you. I mean, I’m glad I’m not that sophisticated. That’s great to be that sophisticated, but most people do not feel that way. And this definitely, I think, affects the experience and the feeling and opposition that people have to new buildings. Because this is such a direct effect.

Rob Wiblin: And it affects such a large number of people. Because even if you live quite a long way from somewhere, you might have to look at it when you’re going to work.

Sam Bowman: And think about London’s skyline. London has a specific rule that a new tower must be architecturally significant to get approval if you’re above a certain storey limit. So we have built into the system that every tower has to be a special unique snowflake kind of thing.

And the result is that you have no background towers. I think it’s something that Manhattan and Chicago both do really well: they have statement towers. They have really striking buildings. Obviously Manhattan has the Empire State Building, the Chrysler Building, and there are others that I am less au fait with and all the rest. But it also has a lot of background generic towers. It has something for them to stand out against.

Every single tower in London is a kind of wannabe Chrysler Building or a wannabe Empire State Building. Actually, if they were a wannabe Empire State Building that would be OK, because that’s so good. But we’re trying to make everything stand out, and stand out in a way that is impressive to architects. But I think it’s not that beautiful or impressive to normal people.

This is why when I first encountered street votes, a long time ago now, I found the design element very quaint, and thought, “That’s nice that you’re putting in a design element. I don’t really understand why. I don’t really get it.” Now I get it. Now I understand.

I think if and when street votes hits the real world, I think most people’s experience of it is not going to be primarily as a density rule — although that might be economically the most important effect — I think it will primarily be as a renewal of town streets and city streets that are at the moment quite ugly, and built in a way that is really not pleasing to the eye for anybody, and replacing them with probably Georgian, some Edwardian, some Victorian. Georgian is the really, really powerful one that people love in the UK — and it’s very simple, so it’s not expensive to build.

And when I think about the effect that a policy like street votes might have, I don’t want to get too obsessed with a single thing, but I can kind of imagine a London that looks far more like the most beautiful parts of London. … Why shouldn’t those places look like those really beautiful areas that we used to build but we don’t anymore?

And it’s so exciting to think that just letting people have a say over their street might get you that. You don’t need master planning, you don’t need a top-down decision about the way the city looks. London should be a patchwork of design. London really should not be a single design across the city, but it would be nice if it was a single design across a given street, I think.

Locals actually really like having nuclear power plants nearby

Sam Bowman: So I think in the UK, nuclear is really exciting. It’s an old technology, it’s a fairly proven technology. I would love to sit down and talk about all sorts of interesting drone tech and stuff like that, but what I really care about is getting the basics right for the UK, and getting the basics right for the whole world. I think the UK is as good a place to start as any.

And nuclear has so much going for it: we know how to do it cheaply; it’s a purely regulatory problem. There is no technological breakthrough that needs to happen. When we talk about small modular reactors, they’re great, they’re really interesting and really cool — but we don’t need them. We just need to be able to do large reactors affordably, as we used to and as already happens in South Korea.

So one thing we could do is change regulation and try to fix it. Or — in line with my view that we should just set up new things — we should just say the South Koreans can build, and if it’s safe in South Korea, it’s safe here. I think that would be a very quick, easy way, and we could probably start it tomorrow.

Rob Wiblin: Won’t locals object to this? I mean, we’re talking about the difficulty of even getting apartments built in the UK. Just starting to chuck nuclear reactors everywhere seems like it’s probably quite a bridge too far for us right now.

Sam Bowman: Funnily enough, locals actually really like nuclear power plants.

Rob Wiblin: Really?

Sam Bowman: Yeah, because lots of jobs come from them. So the dynamic is places that have not had a nuclear power plant are pretty resistant to getting a nuclear power plant. But if you have had a nuclear power plant, or if you have a nuclear power plant —

Rob Wiblin: Why not two, why not three?

Sam Bowman: You’re desperate for them. … But nuclear power plants generally just require quite a lot of skilled labour. They pay well, they’re very popular once they’re there. And places that have had nuclear power plants, but no longer do, seem to really want nuclear to come back — these are good jobs.

So actually, I think that it might be that the nuclear power plant approval process, from a local point of view, could be a lot simpler than we think.

There is still the absurd thicket of environmental approvals. The nuclear regulator, I would say, does not see its job as being to get nuclear built; it sees its job as being to get what nuclear is being built to be built in as safe a way as possible.

You may be familiar with this concept of ALARA — as low as reasonably achievable — which is the idea that there is no level of nuclear background radiation that is safe. Even if we get, as we have with nuclear reactors, background radiation to the same or less that you would get in Cornwall — because of the sunlight that Cornwall gets — that’s not safe enough. Any productivity improvement you get, you have to reinvest in reducing background radiation.

Rob Wiblin: I think this is something that many people might not know: that often this regulation, they’re saying you have to make it basically as safe as you possibly can — and that means that whenever you get any cost savings somewhere else, you figure out some way of making it cheaper, that means that you freed up money now to make the concrete even thicker, add another wall, add another pump, another redundancy. Anything, another redundancy. You’re really saying we can’t accept any above-zero risk, and then there’s almost no limit, no amount of money that you could spend that would be too great.

Sam Bowman: Right, exactly. Literally that. We’ve literally said that you may never get either more profit or, thanks to the magic of competition, lower prices — because you always have to reinvest more and more.

It can be really useful to let old and new institutions coexist for a while

Sam Bowman: Sure. The underlying intuition is that when I’ve worked at or with companies that work well, and when they have a problem, or a team that isn’t performing that well, they will often not try to fix the team: they will often set up a new team. And we don’t really have anything like that in the public sector.

I mean, this is how markets work. It’s almost never the case that a failing, struggling company gets turned around. Sometimes it does. Microsoft, good example — but it’s a very notable example. Most of the time, a company just ends up becoming very bureaucratic, becomes kind of gripped by the problems that it’s had and just dies, and a new one comes along to replace it.

And there is a substantial period of time where the new one coexists with the old one. Because basically that’s how markets work. And also, if we were planning markets, we wouldn’t want to just put all of our eggs in the new basket. Even when it comes to something like legacy software, the big disasters that happen when a company is reliant on an old software system and moves to a new one is when they try to do the switch overnight. They try to say, “OK, the old system’s not working, everybody tomorrow is going to move to the next one.” Almost always that goes wrong.

When it works — and I spoke to somebody where I was very reassured, because when I talked to him about this recently, he gave the example of this and said, “This is how you should do a legacy transfer, is have these things coexisting” — you have the new software, and people can slowly inside the company move to the new system, and you get a kind of a discovery process and you find the errors before you have switched entirely to the new errors, to the new system.

But we don’t do this in public policy for the most part. We certainly don’t do this as a general approach. And where we have done it, it seems to me that it works pretty well.

The one that I think is really interesting: the UK science funding is not in a great place. I would argue UKRI, which is the UK Research and Innovation Agency, is really not that good. It gives money to reasonably unambitious projects. Most people who interact with it don’t like it very much. It’s slightly gripped by these cultural battles that lots of grant-giving organisations seem to be gripped by. And it has more than £10 [billion] to give out every year.

So one approach would be to fix that, put in new people, try to fix the institution. That would be great. But every single person who benefits from the current setup will fight you. And those people are pretty powerful, right? They’re powerful within the organisation, they’re influential, they can say things that make you look like an idiot if you try to fix it. It’s really hard to do that.

Another approach is to say, why don’t we just set up a new thing? And that’s what we did, right? So we set up ARIA, the Advanced Research and Invention Agency. I love the fact they use the word “invention” rather than “innovation” — so much better as a word.

And ARIA is, for its part, loosely modelled on the DARPA model, but I don’t think that’s the thing that’s interesting about it. I think it’s really cool, and the stuff that they’re doing is really interesting. They have some people working on robotics as inspired by the animal kingdom, some people working on stuff like machine-brain interfaces and noninvasive versions of machine-brain interfaces. Just really interesting stuff.

But that’s interesting on one level. I think on another level what’s interesting is we said we’re not going to try and fix UKRI and make it more bold and adventurous. We’re going to make a new institution. And if it works, it works. If it doesn’t work, it doesn’t work. We’re going to protect it basically from public scrutiny. It has been given a mandate that it has a certain number of years where it can do what it wants, and only at the end do we judge it — which I think gives it a lot of freedom, and it’s a really intelligent approach and actually was my biggest concern about setting it up before it happened.

But I think it speaks to a bigger solution to the problem we have of both regulatory and public agency dysfunction, where fighting to fix the regulation or to improve the thing we’ve got is both hard and slow. When we have any kind of time pressure, that can be really, really bad. So sometimes just setting something up new and having it work in parallel seems to work well.

Ozempic and living in the decade that we conquered obesity

Sam Bowman: What’s so exciting about this is that technology has come to a thing that was treated as a social problem. The people who are very interested in obesity and in obesity policy are obsessed with this concept of food environment: that the reason that people are fat is that there are fish and chip shops or chicken shops or McDonald’s everywhere. Or when you go to a supermarket, the supermarket is telling you to buy sweets and stuff like that.

And they, in my opinion, get the causation slightly backwards. The reason those things are everywhere is that they’re delicious.

Rob Wiblin: Everybody wants them.

Sam Bowman: Like, fried chicken is my favourite food. It’s absolutely delicious. I’m really showing how little of a connoisseur of things I am. Fried chicken is absolutely, incredibly delicious. Sweets, candy, chocolate: they are incredibly delicious.

And genuinely, a lot of anti-obesity campaigners or public health obesity campaigners genuinely don’t understand markets or economics in the slightest. They genuinely think that there’s a sort of corporate interest in selling people fattening foods, and if there wasn’t a corporate interest…

They’re starting from a position of anti-capitalism — they don’t possibly realise it, but they are — and they are then saying the reason that obesity exists is that capitalism has wired itself to give people these high palatability, high calorie foods. And the answer, in their opinion, is either reformulate the food to make it taste disgusting and not have as many calories because you’re using artificial sweeteners, or to have bans on where you can put fast food restaurants, or bans on what you can advertise and so on.

I suspect none of that will work, but that’s not the point. Even if it did work, I think it would be a bad thing to do, because those things are tasty and they do taste good. And most people who do not suffer from obesity should not have their enjoyment… Even people who do suffer from obesity should have the option of eating fattening foods and being obese.

And semaglutide — Ozempic, Wegavi, Mounjaro — these things have just solved the problem. It’s absolutely astonishing. I think if we weren’t living in the decade of AI, we would be considering ourselves to be living in the decade that we conquered obesity.

Northern latitudes still need nuclear power

Rob Wiblin: What’s one technology that you think is particularly important, and at the moment a bit underrated?

Sam Bowman: I mean, it’s hard to say this is underrated because everybody’s talking about it, but I think that nuclear is so easy to fix and so important. And I worry a little bit that techno-optimists are too geared on California, and the brilliant minds of people who are in the southwest of the United States, who are probably rightly very bullish about solar for their areas. I worry that people who live in dark old northern European, British climates are forgetting that, you know —

Rob Wiblin: It’s not California.

Sam Bowman: Yeah. We get about a quarter of the amount of sunlight in the winter as you get in the southwest of the United States.

And there are basically two really big problems that we’ve talked already about. Energy costs in the UK are absolutely astronomically high. Industrial energy prices are the highest in the developed world, and absolutely gigantic. And even before the Ukraine war, they were very, very high: they were more than double in inflation-adjusted terms what they were.

Nuclear power, unlike wind and solar, because it runs 24 hours a day, doesn’t need massive improvements in battery technology; it doesn’t need massive overbuild of electricity pylons and things like that. When you have a megawatt solar farm in the UK, the capacity factor, you get about 100 kilowatts from it. You get about 10% on average across the year — arguably 20%, because that includes nighttime, which I think is slightly unfair on the solar.

The amount of land that solar takes up is absolutely huge. You’re talking about eight acres for a megawatt, or between three and eight, depending on what technology you’re using.

Rob Wiblin: And that’s fine in Texas, but almost everywhere in England, at least south England, is kind of spoken for one way or another.

Sam Bowman: Yeah. And it is undeniable that the cost curve of solar especially is incredibly exciting. We may get to a point where photovoltaic cells are basically free. Like where they’re in paint, or they’re just being rolled out like paper. It’s just so cheap that it’s almost free. And in that case, maybe batteries can absorb the energy that we need so that we’re OK. Although I think in a place like the UK that has not very much sunlight and often has periods where it’s incredibly overcast for weeks, I think even then we’re not going to be all right.

So on the one hand you have something like solar. I respect the solar bulls. I think they’re very brilliant people. I have learned a lot from them. But what they are saying will not work for the UK, and may not work for a lot of northern Europe, and may not even work for the northeast of the United States, which a lot of people live in.

If so, we need something else. Wind is just not going to get as cheap as solar. Lots of elements of wind are no longer following anything like the kind of cost reductions that they were following because we were getting economies of scale. Certainly not getting to a point like photovoltaic cells, where we’re talking about this energy being free. And wind suffers from different, but the same kinds of intermittency problems.

Nuclear doesn’t. But most importantly, nuclear used to be cheap. In the United States in the 1960s, nuclear power was three cents a kilowatt hour in inflation-adjusted terms. Three cents a kilowatt hour is really, really not much. It’s cost competitive with coal. The challenge is, how is it that we have gotten from nuclear being about the same price as coal to nuclear being by far the most expensive form of electricity generation? By some measures it’s more expensive than wind and solar in the UK — probably arguably no: if you factor in the need for constant power, it’s actually a bit cheaper. But that’s the challenge.

So one thing we can do is look to history and say, what is it that changed? Clearly, Three Mile Island — which didn’t kill anybody, but did lead to very significant concerns about radioactive materials being released — was a problem. Obviously Chernobyl was a huge problem. Fukushima, which again, didn’t really lead to massive loss of life — actually, I think was kind of a model for the safety of nuclear, because if you can imagine a more unfortunate coincidence of events than a tsunami and an earthquake and a nuclear meltdown still not leading to anything like the kinds of deaths… I don’t want to put an exact number on it, because there arguably were some radiation releases. Nobody can really say exactly how many people died, but it’s closer to zero than it is to 100.

So we’ve gone through a series of events that have led us to be very, very concerned about the cost of nuclear in terms of human life — without ever thinking about the alternative costs in terms of human lives from other ways of generating power. And if solar and wind are not viable options, then that means gas or coal, depending on where you are in the world, which create CO2 emissions, which causes global warming, which can kill people.

Articles, books, and other media discussed in the show

Sam’s work:

Housing and growth:

UK context:

US context:

Other countries:

Second staircase rules:

The importance of aesthetics:

Progress studies and related topics:

Other 80,000 Hours podcast episodes and resources:

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About the show

The 80,000 Hours Podcast features unusually in-depth conversations about the world's most pressing problems and how you can use your career to solve them. We invite guests pursuing a wide range of career paths — from academics and activists to entrepreneurs and policymakers — to analyse the case for and against working on different issues and which approaches are best for solving them.

Get in touch with feedback or guest suggestions by emailing podcast@80000hours.org.

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