Spatial Collective Action Problem

Homeowners

• Homeowners seek to protect home values and preserve neighborhood amenities

• Given the local nature of housing development approval, homeowners are incentivized to mobile against local housing development, particularly high-density projects

Renters

• Favor dense housing development more than homeowners

• Don't mobilize in support of any one housing development because the benefits are diffuse

A Deeper Look at Restricted Development

• People have "generalized preference for lower housing prices."

• But locally, they are "sensitive to local externalities like noise and congestion"

• One hypothesis is that more housing would be developed if the decision making was removed from the local level 

Self-Reported Preferences

55-60%

85%

Self-Reported Preferences on Future Housing Prices

Does Increased Supply Lower Housing Prices?

Survey Results

A 10% Increase in Housing Supply Would Lead to ...

Supply Skepticism is relatively uncorrelated with Chain of Moves Predictions

• fostering the perception that macroeconomic factors and financial markets, rather than supply-side elements like building productivity or land-use restrictions, dominate housing prices

• People observing new housing developments in high-price areas might mistake correlation for causation