Housing Shortages Benefit Those Who Already Own Their Home
Crisis for Me, Windfall for Thee.
We know that zoning restrictions have a price: When housing is harder to build, it means that the housing shortage continues, that housing and rental prices rise, that only the wealthiest can afford to buy a home in a desired area. But the group that benefits from the housing shortage tends to be the same one that is staunchest in its NIMBYism: homeowners.
Generating equity through rising home values is nothing new. Real estate is one of the top assets for creating generational wealth. But just how much homeowners are making off of the housing shortage may surprise you.
In September of 2022, the New York Times ran a piece detailing the increase in home values in cities across the cities over the previous decade—and how that increase translated into daily earnings for homeowners. “Imagine finding $266 stacked up on the coffee table every single day from 2011 through 2021. That’s one way to envision price appreciation in San Jose, Calif., which had the greatest gain of all metros when measured in actual dollars,” wrote author Michael Kolomatsky.
From 2021 to 2022, the average homeowner in Durham earned $54,062 simply due to the rising value of their home. That amounts to $148 stacked on the coffee table, every day, from doing nothing.
That figure is not far off from the average earnings in Durham, North Carolina. In 2022, the average sales price for a single-family home in the city was $441,348—an increase of 14 percent from the year before. That means that, from 2021 to 2022, the average homeowner in Durham earned $54,062 simply due to the rising value of their home. That amounts to $148 stacked on the coffee table, every day, from doing nothing.
It’s no wonder that NIMBYism is so strong among homeowners: They directly benefit from the housing shortage. When cities capitulate to NIMBYs and fail to allow more housing to be built, housing costs continue to rise, and homeowners continue to profit. It’s the duty of cities to combat NIMBYism and make housing more accessible rather than listening to the loudest—and often the most self-interested—voices.
Zoe Tishaev was the Spring 2023 Duke Initiative for Urban Studies Fellow on Transportation Alternatives and University Development.
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Great post and I agree with the core premise. I also think we should be cautious about 'us versus them' language when talking about homeowners. The vast majority of home owners I know would welcome denser development in their neighborhoods, and I think most NIMBY movements come from a super vocal minority. I think we give them more power by treating it as a bigger group than it is.
Homeowners benefit from dense development too. density allows more businesses to thrive, more investment in transit and pedestrian infrastructure, and generally raise the value of those properties regardless.
The money on a table every day analogy is not a good one in my opinion. It ignores the differences between realized and unrealized gains.
The much more accurate description would be that Durham homeowners get $148/day deposited into a savings account that they can’t withdraw from until they sell their house. However they are allowed to borrow from that account via a HELOC or home equity loan for 7+%.