Over the past several years, a growing chorus of urban economists has decried the way that NIMBY sentiment, an acronym for “not in my backyard,” keeps urban housing prices unnecessarily high. Traditionally, the presence of NIMBYs was a sign of a healthy community: These were concerned residents who were motivated to keep “bad” things, like prisons or waste treatment plants, out of their neighborhoods. But NIMBYism has grown substantially over time, and it now erupts in opposition to all manner of new development. This behavior isn’t just selfish; it’s destructive. By limiting density and clustering, NIMBYs hold back the urban innovation that powers growth.
That’s why I prefer to call them the New Urban Luddites instead of NIMBYs, which sounds more benign. The original Luddites, named after their semi-mythical leader, Ned Ludd, took hammers to the weaving machines that were taking away their livelihoods during England’s Industrial Revolution. Over the course of the next century, ironically, those factories would lift living standards to higher levels than the Luddites could have ever imagined. The original Luddites, at least, were poor. The New Urban Luddites aren’t exploited workers, but some of the biggest winners of winner-take-all urbanism.
This New Urban Luddism is codified in the enormous and complex thicket of zoning laws and other land use regulations that restrict the supply of housing in many cities. While that may not have been their original intention (much urban zoning began as an effort to keep noxious industrial operations a safe distance away from housing), when taken together, these regulations have a substantial negative effect on the economy, adding up to more than a trillion dollars a year, or nearly 10 percent of GDP, according to one estimate.