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The NIMBY Cartel

The modern form of homeowner or landlord enclosure of property manifests itself (much like the collusion between landed gentry and Parliament in England during the enclosure movement), through the control of government, which determines planning policy, abetted by a zoning code that separates land uses and promotes low-density housing and automobile transportation. At the city level across coastal California, homeowners consistently oppose growth in their communities. The construction of fewer new units has the result of keeping property values and rents high. Landlords are invariably homeowners; so through high property values and rents, they benefit twice from the status quo, no-growth planning model.

 

Conveniently, these NIMBY (Not in My Back Yard) homeowners often use the environment as an excuse for no-growth, while they continue to water large landscaped yards during a critical California drought, and drive to and from their subdivisions to shopping centers and strip malls to do their shopping, when they could be taking the bus or riding a bike. What they care about is not the environment, but rather maintaining a privileged lifestyle based on overconsumption of resources, including water and energy. Their lack of concern for the environment is revealed in their opposition to increased density, which uses less land, makes services more efficient, and reduces CO2 emissions. Because their real interest lies in increasing their property values, homeowners co-opt the planning process and CEQA environmental review to stop all development, including multifamily and mixed-use projects that include sustainability measures and promote alternative transportation. While some disadvantaged communities rightfully oppose the siting of, for example, a dump or factory in some open space in their backyard based on environmental, health and safety concerns, the planning approval process and CEQA were not meant to be used by wealthy NIMBY homeowners to increase their property values and rents by blocking construction of new and needed housing.

 

Furthermore, the low-density, single family home development model makes it impossible in the long term for suburban municipalities to provide basic services (streets, water, sewer, electricity, schools, parks, police protection, firefighting units) without going bankrupt, or building more speculative sprawl development. This problem is exacerbated by the passing of Proposition 13 (1978) in California, which sets property tax based on a property’s value on the purchase date, meaning that homeowners do not pay property tax based on the current fair market value for their homes, with those who have been in their homes the longest receiving the biggest subsidy. As a result, Prop 13 guts municipal budgets that fund the infrastructure and services people depend on, while also discouraging homeowners from selling their homes, creating upward pressure on property values, which again benefits those same homeowners, who also happen to be those with the most wealth.

 

So what we have in California is an entrenched property class that doesn’t pay its fair share of the cost of the services it uses; fights to protect densities that are so low that cities cannot afford to provide basic services in the long term; receives subsidies including a mortgage interest deduction and lower property tax as a result of Prop 13, while also being able to borrow on the equity of their home, which grows as a result of increasing property values that come from obstructing new development.

 

This is the same property class that got into the business of real estate speculation, trading up to bigger and bigger homes on borrowed money, and using home equity loans (that benefit from lower interest that is often tax deductible) to put down payments on second, and even third homes, in order to flip them quickly for a profit, which again drives up property values. This greed-based hijacking of the housing market for the benefit of the few was the main cause of the economic collapse in 2007. At the peak of the housing bubble, it became clear that people had lost touch with what housing was for: to provide people with a place to live. Unfortunately, in spite of the collapse, many Americans still see housing as a vehicle for wealth creation, which produces an environment where housing is unaffordable to many, outpacing wages as a result of speculation and opposition to new construction. What we are left with in coastal California is a housing pyramid scheme run by an informal cartel of homeowners and landlords.

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