Folk Economics and the Persistence of Political Opposition to New Housing

115 Pages Posted: 15 Nov 2022 Last revised: 30 Apr 2024

See all articles by Clayton Nall

Clayton Nall

Department of Political Science, UC Santa Barbara

Christopher S. Elmendorf

University of California, Davis - School of Law

Stan Oklobdzija

Tulane University - Department of Political Science

Date Written: April 29, 2024

Abstract

Why is housing development so severely restricted in U.S. cities and suburbs? Political economy scholars often point to local politics, where homeowners can exploit discretionary planning processes to oppose new developments while renters remain indifferent due to the diffuse benefits of increased supply. One proposed solution has been to elevate land-use authority to the state or regional level, thereby circumventing NIMBYism and leveraging voters' stated preferences for lower prices by increasing housing supply. However, in three surveys of urban and suburban voters, we find a significant barrier: although many desire lower prices, only 30-40\% believe that a higher supply would lead to this outcome. This skepticism towards the ``supply and demand'' principle in housing starkly contrasts with respondents' otherwise accurate understanding of other markets. Instead, for housing, there is a strong, stable ``folk economic'' belief blaming high prices on landlords and developers. We discuss the implications of these findings for state-level housing-supply expansion plans.

Keywords: housing, folk economics, housing supply, NIMBYism, survey research

JEL Classification: R31, H7

Suggested Citation

Nall, Clayton and Elmendorf, Christopher S. and Oklobdzija, Stan, Folk Economics and the Persistence of Political Opposition to New Housing (April 29, 2024). Available at SSRN: https://ssrn.com/abstract=4266459 or http://dx.doi.org/10.2139/ssrn.4266459

Clayton Nall (Contact Author)

Department of Political Science, UC Santa Barbara ( email )

Ellison Hall
Santa Barbara, CA 93106
United States
6178502062 (Phone)

HOME PAGE: http://www.nallresearch.com

Christopher S. Elmendorf

University of California, Davis - School of Law ( email )

Martin Luther King, Jr. Hall
Davis, CA CA 95616-5201
United States
530-752-5756 (Phone)
530-753-5311 (Fax)

Stan Oklobdzija

Tulane University - Department of Political Science ( email )

Tulane University
316 Norman Mayer Building
New Orleans, LA 70118
United States

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