Jul 2, 2021Liked by Noah Smith

Much of SF “progressive” NIMBYs are generally ok with yuppie fish tanks in SOMA. What they hate most is missing middle housing and small condo units in nicer neighborhoods of San Francisco. This theory doesn’t capture why their behavior is so bad. Work in tech, go to your SOMA “ghetto” and leave Haight / Sunset / Mission / Bernal alone, they scream.

Expand full comment

I'd be interested to read more about how the politics of YIMBYism seem to be shifting (at least here on the east coast, and maybe nationally). As mainstream Democrats at the state and federal level are becoming more sanguine with YIMBYism, negative partisanship seems to be pushing Republicans in the other direction. For example, the city of Charlotte, NC is currently trying to do away with exclusionary zoning. The former Republican governor responded by hysterically tweeting that Democrats want to destroy suburbanites' quality of life. https://twitter.com/patmccrorync/status/1407498659424579584

So what once seemed like an issue that could potentially transcend left and right now seems like it's increasingly becoming yet another point of partisan division.

Expand full comment

When I read articles such as this, I often find it useful to swap the terms of whatever binary opposition has been set up and see if I'm comfortable with it. For example:

>In other words, YIMBYism is about minority diversion. It uses market-rate housing to catch and divert minorities before they can ever invade normal folks' neighborhoods.

I find that worldview problematic. And it runs throughout the entire article.

Expand full comment

A few comments:

1) Who builds the fishtanks?

Gleaming high-rises don’t just spring out of nowhere. They are capital- and risk-intensive projects. Someone has to pay for them. Either the city or the private sector has to provide the money, or a combination of the two.

Developers prefer when cities help cover the bill – it makes their projects more profitable and lowers the risk profile. ‘Help’ can cover both direct subsidies, such as tax inducements, as well as indirect spending, such as municipal infrastructure or transportation redevelopment.

Cities have a limited amount of funding at their disposal. When they make large investments in areas that are intended for high-income residents, there will be less left over to spend on other areas, or on city-wide services. The backhand of the author’s argument is that, to ‘protect’ low-income communities, those communities may also have to forgo investments in infrastructure and services, so that these funds can be redirected to high-income ‘fishtanks’.

2) Developers like gentrification

What if the private sector is simply left to fund their own ventures? All well and good... except for the fact that there’s no reason to invest in a risky high-cost ventures when you can simply refurbish existing infrastructure at lower cost.

Gentrification makes good sense, for owners and developers. Gentrification allows for assets that previously had a low rate of return to be transformed into ones with a higher rate of return, often only for modest acquisition or refurbishment costs. Given the choice between gentrifying existing properties, and developing otherwise ‘virgin’ territory, with all the attendant costs and risks, gentrification is the obvious choice.

3) What about fishtanks built ON low-cost housing?

There’s nothing to say that building ‘fishtanks’ necessarily spares existing neighborhoods. For developers, existing low-income neighborhoods often have the advantage of being inexpensive to acquire, while being centrally-located, unlike ‘virgin’ developments on city outskirts. If you are going to build a ‘fishtank’, it makes great sense to do it on top of existing low-income neighborhoods.

4) Tech businesses don’t provide tax revenue if they don’t pay tax

The author makes the following assertion:

"But this is not a good idea. Driving yuppies and tech businesses out of the city means lower tax revenues. Those tax revenues are essential for paying for city services for the poor and working-class [...] And tech businesses and yuppies provide those revenues.

For this to be correct, said businesses actually have to pay a positive tax rate. However, this is not always the case.

On one hand, cities driven by this logic might offer tax inducements to attract and maintain tech businesses. For example, during the tender process for Amazon’s HQ2 headquarters, New York and Arlington offered the company many hundreds of millions in both direct grants and tax credits. Companies such as Amazon, with exceptional bargaining power, can potentially extort very low, or even effectively negative tax rates from host municipalities.

In addition, indirect expenditures can also turn tax rates effectively negative. For example, if the municipality spends more money on new infrastructure in select neighborhoods to attract ‘yuppies’ – transit, neighborhood renewal, etc. - than it receives from them, then, in effect, the city’s poorer residents are subsidizing the existence of the ‘yuppies’, rather than the other way around.

Expand full comment

Aside from this as you admit actually relying on supply and demand after all, there's a very important market segment for gentrification that you're overlooking: the young, ambitious and bored with the 'burbs segment, with modest income but willing to share or live in a tiny flat to live in the happening city. They are typically the first wave of gentrification, sharing former working-class family apartments in neighborhoods yuppies wouldn't (yet) consider living.

It's very difficult to prevent the masses from collectively changing their minds about where they prefer to live and in my opinion utterly hopeless to try to prevent the wealthier from outbidding the less wealthy. Nobody has any remotely serious idea how to prevent the gentrification of Brooklyn but it was and still is possible to help some traditional residents become owners.

Expand full comment

The only reservation I have about this is that many of the yuppies I know - myself included - have a vague unease about being a yuppie! And moving out of downtown, into more ‘historic’ neighborhoods, sets oneself apart from the yuppie crowd.

There will always be a hipster-ish type that recoils at these steel-and-glass fishbowls, and would prefer to live in places with more ‘texture.’ Eg Brooklyn and Harlem in NYC, or Capitol Hill in Seattle.

Expand full comment

I'd be interested in understanding your objection to the Ellis Act?

I'm not sure why people would want to be a landlord given the immense constraints placed on them in NYC, SF, or DC. There have been several WaPo articles about how the eviction ban has crushed landlords in the DC area.



Is being a landlord that profitable and if so, why don't municipalities start doing it themselves?

Expand full comment

While I agree with Hadron on the esthetic qualities of the fish tank in this article, calling apartment buildings in general as sub par housing is clearly wrong. Hadron can’t possibly ever have visited Europe. I have lived in apartments my whole adult life and wouldn’t want to live in a house ever.

Now I wouldn’t want to live in a fish tank either but there are numerous ways of making even relatively high apartment buildings both pleasing on the eye, and pleasing to live in, although most of the time apartments built more than 100 years ago are superior to new built.

Otherwise a very good article I thought. Especially pointing out that the simplistic s/d model clearly doesn’t work for real estate.

Expand full comment

Call it shallow, but my issue with YIMBYism has always boiled down to the fact that I find the fishtank glaringly ugly. I cringed every time you referred to it as "pretty" in this post, even in the distanced way you did. I mean, I guess it's nice in a postcard, but I do not want to have to look at this thing every day on my way to work, let alone live in it. It has all the flaws of a featureless gray skyscraper, *and* it hurts to look at for five minutes due to catching the light of the sun.

Economical realities be damned, my heart insists that apartment buildings in general are a debasement of humanity, and that our every effort and resource should go towards giving every household their actual, well, house. Preferably with a garden. (It needn't even be a very large garden, or a very large house, for that matter.) But at the absolute minimum, people should not ever have to be forced to live in flats without open-air balconies where they can grow a minimal number of potted plants, or even just breathe for a minute.

Consequently, I find the notion of there being people in the world who might actually choose to live in these, for reasons other than perverse market incentives giving them no other options, unspeakably alien. And if there are indeed such people, I would view this as a public crisis demanding rectification for the sake of the betterment of mankind, like if it was suddenly discovered that a large amount of people genuinely enjoyed breathing in toxic fumes.

Your article, in viewing the big shiny horrors as distractions for fishtank-lovers to avoid them messing up other people's neighbourhoods, thus strikes closer to my frame of mind than most other YIMBY writings I've seen. But even so, something inside me recoils at the idea that we should *enable* fishtank-lovers.

Expand full comment

The reason yuppies flock to those modern style high rises is because they can't afford the lovely old Victorians or Craftsman houses. Those get sold to people with real money, not high end working stiffs. This has been the pattern in Seattle, a city with lots of new housing. You should have bought on Capital Hill or in West Seattle ten or twenty years ago. This has been the pattern in NYC where you should have bought in the East Village in the 1980s. This has been the pattern in San Francisco where it helps to remember that Telegraph Hill was working class through the 1950s. If you ignore the effects of rent control and subsidized housing, the well off drive out the less well off, and money prefers low density vernacular housing to fish tanks.

Those papers take a relatively short term local view, and they find short term effects, "monthly rents fall by $22.77 - $43.18 relative to trend, roughly 1.2 - 2.3%" that are laughably small. Neighborhood change takes decades, and the annual effects can be quite small though they accumulate.

I have nothing against building lots of new housing. It does slow the rate of rent increases, but it doesn't stop the tide. I'm sure that enough new housing could stop the rising tide, but available tracts like North Beach in Queens or South Lake Union in Seattle are rare.

Expand full comment

"In other words, it's a wash - it neither increases nor decreases the total number of gentrifiers."

This is when the progressive-NIMBY alliance becomes super relevant. Maybe a progressive would find this acceptable, but a NIMBY would freak out about congestion externalities.

Expand full comment

I think this is just supply and demand with a unique twist, right?

The twist is it presumes there are 2 entirely separate classes of people, the yuppies and everyone else, and 2 classes of housing, the fish tanks and the normal people housing. But although both groups prefer their own habitats, spillover only happens in one direction: yuppie person to normal housing.

I don't really buy most of those assumptions, at least not in their stronger forms. But does it lead to any different conclusions than the regular supply and demand theories would? Whatever kinds of housing you build, the yuppies will occupy it if they can. If the houses were the tiniest, shiittiest boxes, NYC-style-can-put-your-feet-on-your-bed-from-the-toilet apartments, you're still going to find them preferentially rented to tech workers with money and resumes that landlords like as long as they are down the street from Facebook

Expand full comment

It’s probably just me, but when I hear “Catch and divert” the yuppies, I wonder if they eventually get diverted to the abattoir:


As to the general thesis, something about the implied philistinism of “yuppies” gnaws at me. Most of the tech people went to highly credentialed universities, are giant glass buildings really going to be their aesthetic preference? They likely have interests in architecture and the “feel” of the neighborhood they want to live in that are opposite one with block after block of super tall buildings, and their market power will determine what happens.

Expand full comment

Isn't this just a two-good supply and demand model with substitution effects ;)

Expand full comment

The bill circulating in Congress right now was supposed to create tech hubs in the Middle of America hollowed out by NAFTA and Walmart effects. The goal was to prevent all the companies from converging into the same markets. My thoughts were similar to yours in what will that do to the cost of living (rents included) on those currently living and working in these low cost of living and lower rent markets? While it might help the current tech hubs and will elevate rents and revenue in the new hubs, what about the working class?

These "market" discussions actually explain why markets don't necessarily solve our problems without creating other ones. I believe economists call these externalities and our current market system loves to exclude those costs or divert them onto the public at large.

Capitalisms markets seem to work really well for the wealthy, but not so much for others. Maybe, it was by design - look at the oligarch founders who created our societal institutions. ;)

Anyway, we really need a multi-tiered economy requiring social planning. Albert Einstein proposed this alternative in 1949 in his famous dictum called, Why Socialism. He recommended we update our institutions which had all become oligarchy-controlled. As we now know, capitalism is NOT sustainable and our educational systems are failing badly. He had a solution for education as well.

The closer you look, we have socialism for the richest segments of America with rugged individualistic capitalism for everyone else. This quite frankly is evil, absurd, and irrational. If this truth were told by the media, the masses would revolt. This is why our society is full of propaganda and shredding each other apart from the oppression.

We need a more accommodative structure for the working class and a sustainable, highly regulated market at the top. It's not a market or socialism -- it's both but done with intent so that it is fair and sustainable.

Our economic system is grossly unfair and anybody with a 5th-grade education and the truth would reach that conclusion. I think Noah is on to something but the solution is we need to make the outcomes more deliberate through planning.

Expand full comment