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The pandemic has enabled many Millennials to buy their first home. Could it also have paved the way for a new breed of NIMBY?
But first, here are three new stories from Atlantic.
fight in the yard
When we think of the typical NIMBY – a derogatory term (short for “Not in my backyard”) for someone who opposes change in their community, especially if they don’t oppose change elsewhere – we have tend to imagine a Boomer-class, waving his fist skyward as someone builds affordable housing or a new wind turbine in his neighborhood. Research backs it up: The types of people who show up at local meetings to oppose new housing are older, more likely to be white, and more likely to be homeowners than those who don’t.
But the pandemic has not only spawned variants of the coronavirus. It may also have accelerated the development of a new variant of the change-averse owner: the Millennial NIMBY.
Over the past two years, house prices have soared as the country’s longstanding housing supply shortfall has turned into demand fueled by low interest rates and increased labor from a distance. As a result, the median selling price of a home in the United States has risen from $313,000 at the start of 2019 to $428,700 at the start of 2022.
New research from Freddie Mac shows that first-time home buyers were “the main driver of increased demand. In 2021, Freddie Mac funded 554,000 loans for first-time buyers, up 22% from 2020,” writes chief economist Sam Khater. “This is the highest level since tracking began in 1994.(emphasis mine).
Becoming an owner does not automatically make you a NIMBY. In fact, the people who attend zoning board meetings to try to block new construction, or who hire lawyers to try to prevent the construction of renewable energy or public transit projects, are very bizarre and represent a very small percentage of people who own homes.
So why am I worried about these new owners? Because I believe many of them will soon be desperate to maintain their property value – a key ingredient of NIMBYism. (If you’re wondering why NIMBY-ism is bad, you can read my longer musings here. But it plays a big role in our critical housing shortage, our failure to build public transportation, and the floundering of renewable energy. projects such as wind and solar farms.)
The economist William Fischel’s book The local voter hypothesis details how homeowners become “voters” and act to avoid potential declines in the value of their property. Importantly, these local voters are becoming extremely risk averse. Even though the new condos down the street probably aren’t going to hurt your home’s value, why take the risk?
Millennials took longer than previous generations to buy their first home, largely because of the Great Recession. But low interest rates in the early 2020s made mortgage payments affordable for many, even as house prices soared. In their fever to take advantage of low rates, many of these new homeowners put everything on the line: Redfin found that “potential buyers who bid all the money were more than four times more likely to win a bidding war than those who did. not in 2021. They also found that waiving pre-inspection improved the odds of a competitive bid being successful by 25%. Another report says a record share of homebuyers bought their homes without seeing them.
So now a large number of Americans have not only invested a large portion of their savings in new homes, but are also more likely to encounter costly problems with these new homes, given the frenzy with which they bought them. . Unlike their older counterparts, who likely have more diversified savings portfolios, these younger homeowners have tied up their money in their homes. While all homeowners care about the value of their property, it stands to reason that people who have purchased homes with potential resale value issues – or who have no other savings to fall back on in case medical or financial emergency – will be all the more concerned about any potential decline in value.
It’s one of the first steps on the path to becoming a NIMBY: feeling like your entire financial future hinges on the value of a single asset, an asset whose value you have very little control over. Home values depend on many variables, including local crime rates, the quality of local public schools, the weather, and the ineffable feeling that a neighborhood is “cool.” It’s a frightening position to find oneself in, especially in a country that leaves its elderly, sick and poor without an adequate social safety net.
It’s possible that young owners are less prone to NIMBY-ism than their ancestors. After all, they are more liberal and likely to accept new neighbors, and they are also less likely to have anti-tenant sensitivities, given that they have spent more of their lives as tenants themselves. themselves. But I’m worried – when personal finances collide with political ideals, guessing who the winner will be isn’t hard.
Related:
Today’s News
- The European Commission has proposed a natural gas rationing plan, hoping to avert a winter energy crisis if Russia cuts its gas exports.
- A Georgia judge has ordered Rudy Giuliani to testify in a criminal investigation into election interference.
- South Carolina disbarred attorney Alex Murdaugh has pleaded not guilty to murdering his wife and son.
Dispatches
Evening reading
By Alexis Madrigal
(A 2018 story from the Atlantic archive)
ChuChu TV, the company responsible for some of the most viewed toddler content on YouTube, has a cute enough origin story. Vinoth Chandar, the CEO, had always played on YouTube, making Hindu devotions and short videos of his father, a well-known Indian music producer. But after he and his wife had a baby girl, whom they nicknamed “Chu Chu”, he realized he had a new audience – of just one.
Read the article completely.
More Atlantic
cultural break
Lily. A poem for Wednesday, “Portrait of the artist with the family dog”.
Look. Jordan Peele Nope is spectacular, indulgent and brutal. You won’t be able to look away.
Play our daily crosswords.
Republicans have already unleashed a firestorm over how companies eager to help their employees have abortions are actually exploiting them to keep working. But the advocacy of American companies on the issue is not so simple. Today, The New Republic published an article reporting that CVS, the nation’s largest pharmacy chain, is running its local branches in states including Alabama, Arkansas, Idaho, Montana, Oklahoma and Texas to ensure that a prescription filled with misoprostol or methotrexate is not going to be used to induce an abortion. Some drugs, like methotrexate, that can be used to end a pregnancy are also used to treat diseases (like lupus). It seems clear to me that fear of liability is going to make companies extremely risk averse when it comes to helping women seeking needed reproductive care, especially as many states consider giving their residents the ability to sue anyone who helps a woman obtain an abortion.
— Jerusalem
Isabel Fattal contributed to this newsletter.
