Nimbys have a point

Matt Yglesias is always interesting to read on urban issues, but I think in this post he draws too long a bow.

He's responding to some people complaining about a Mexican restaurant planning to open in their Washington, DC neighbourhood, with an outdoor area serving drinks till 3am. His argument - that the interests of people likely to be employed by the business, and the council amenities likely to be funded from its tax revenues, should come before those of Nimby neighbours - does a good job of staking out a sort of left-libertarian stance on these issues. But I think it misses why these sorts of decisions are so controversial.

Pretty much every planning decision involves a transfer of property. Land and property are valued according to their context: bulldoze that park and build an incinerator, and you can be pretty sure that both homes and businesses in the area will lose value. We talk a lot about the problem of negative equity in the wake of a credit bubble, but in many cases these sorts of decision can wipe out someone's equity even in a stable market, and certainly leave them paying over the odds for their property thanks to the stroke of a planner's pen. Of course, not everyone loses out: the incinerator-owner gets to upgrade previously unsuitable land, and can hope for higher margins as a result of her reduced property costs.

The same goes for someone who wants to build a house extension that will overshadow their neighbour's garden, someone who wants to build a coalmine in the middle of a farming district, or someone who wants to double the size of their shopping centre in a residential area (all cases I know of around Sydney at the moment). Property, mostly in the form of land value, is being transferred from one group to another via the planning system.

I'm not saying this should never happen. Clearly Nimbyism has unfair targets as well as fair ones. But listening to the fuss made by large, wealthy institutions like the mining industry when a government suggests raising their taxes, it strikes me that Nimbys are mostly a small-scale version of the same thing: people complain when governments reduce their wealth.

The main difference between Nimbys and major business lobbies is mostly one of influence. Peak lobby groups have managed to shift the tax burden down the income scale in recent decades, cutting top marginal tax rates despite the fact that more progressive taxation is wildly popular. The same groups are frequently on the non-Nimby side of planning disputes. And the trend across numerous countries is to take more of these decisions out of local hands and give them to central and regional governments, who are more likely to back the big end of town.

I don't see Nimbyism as the main problem here. For the most part I think Nimbys are the little sling-throwers in these David and Goliath battles. Mostly I think they have a sound case for their objections. Not always a winning case - I agree with the point that many developments should go ahead for the broader public benefits, whatever the neighbours think. But they're cases that deserve to be heard on their merits, rather than dismissed out of hand as obstructionism and resistance to progress.

(For the record: I don't own a house, so I haven't got a dog in this particular fight)