#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:
- 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
- Allowing individual streets to vote permit medium-density townhouses (‘street votes’), or apartment blocks to vote to be replaced by taller apartments
- 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
