How NIMBYs Have Made Housing More Expensive

Performance Property Real Estate Question

Q: Gerald, I’ve been a builder for a while. I finally found a nice big lot where there is an old single family home that needs to be torn down. I’d like to build at least 4 townhouses on the lot but the town only allows for single family homes. Corey, Westfield, NJ

A: The acronym, ‘NIMBY’ stands for ‘not in my backyard’ and it is a nickname for a person who objects to something in the area where they live while raising no objections to something similar in other places. NIMBYism is natural and expected for many homeowners who want to protect their most valuable asset (their home). Unfortunately, NIMBYs play a large role in exacerbating our critical undersupply of housing. Outdated, exclusionary, local zoning ordinances force builders to build single family units on lots that are bigger than what the real estate market wants. In your specific case, Corey, it makes much more sense to build several townhouses on the lot you found to accommodate more than one potential buyer. With a shortage of buildable land, higher density housing is particularly important for first time buyers, many of whom have struggled recently to find affordable housing to purchase. The archaic zoning ordinance that you are facing is unfortunately not uncommon. In the US, we are millions of housing units short of current housing demand, consequently, renovating just one single home on a big lot or tearing it down and building one McMansion does not add to much needed housing supply. NIMBYs, who often stand in the way of reforming archaic zoning laws to allow for higher density housing units are a big part of the reason home prices continue to skyrocket. Thanks for your question, Corey.
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