Study: NIMBYs Stunt the National Economy

Annie Lowrey doesn’t pull any punches in introducing a discussion about the external costs of well-preserved residential neighborhoods: "These neighborhoods are adorable. They are desirable. And they are a total economic disaster."

Lowrey's strongly phrased indictment follows newly released research by Chang-Tai Hsieh of the University of Chicago and Enrico Moretti of the University of California, Berkeley, who study the damage inflicted by constrained housing markets in San Francisco, New York, and San Jose on the larger economy. In other words, the study examines how the growth of cities determines the growth of nations.

And by that measure, the news is not good. According to Lowrey's explanation, the study, "calculates that the United States economy would be nearly 10 percent bigger if just three cities — New York, San Jose, and San Francisco — had loosened their constraints on the supply of housing and let more people in during the past few decades. Let that sink in: 10 percent bigger." That loss is calculated relative to hypothetical conditions imagining those cities with average land use regulations, rather than the highly restrictive regulations that actually exist.

Attentive readers will recall that Timothy B. Lee of Vox picked up news of a discussion draft of the study by Hsieh and Moretti in July 2014. Now the study is complete and made publicly available. Also, at the time, the angle on the study's findings was described differently, focusing on the lost productivity of workers that can't afford to move to cities thanks to the obstruction of NIMBY activists.