Kristian Niemietz writes for CapX
One of my colleagues used to have a theory about how Britain’s housing crisis would eventually become self-limiting.
It went more or less like this: the problem at the moment is that the cost of NIMBYism (i.e. organised resistance to house-building) is not borne by the NIMBYs themselves.
NIMBYism, to the extent that it is successful (and in Britain, it usually is), leads to higher house prices, higher rents, longer waiting lists for social housing, more people living in cramped conditions, higher spending on housing benefit (and thus higher taxes), and so on. But that cost either falls on people who do not own a home, or it is spread across all taxpayers. It is not borne specifically by the people who are causing the problem. The cost of NIMBYism is therefore an external cost, comparable to pollution or aircraft noise. You could even make a good economic case for a tax on NIMBYism.
According to my colleague’s theory, that external cost would internalise itself as soon as NIMBYs got fed up with having to share a house with their own adult children, who cannot afford to move out. Blocking nearby development and keeping house prices high may seem like a good idea when you have, say, an eight-year-old and an 11-year-old living with you. But things will look very different 20 years later, when they are 28 and 31, and still living with you.
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