The Next Generation of NIMBYs
Younger buyers who sunk their savings into new homes have too much to lose.
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The pandemic made it possible for many Millennials to purchase their first home. Could it also have set the stage for a new breed of NIMBYs?
But first, here are three new stories from The Atlantic.
When we think of the typical NIMBY—a pejorative term (short for “Not in My Backyard”) for someone who opposes change in their community, especially if they don’t oppose that change somewhere else—we tend to imagine an upper-middle-class Boomer, shaking his fist at the sky as someone builds affordable housing or a new wind turbine in his neighborhood. Research backs this 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 didn’t just spawn variants of the coronavirus. It may have also turbocharged the development of a new variant of the change-averse homeowner: The Millennial NIMBY.
In the past couple of years, home prices have skyrocketed as the nation’s longtime house-supply deficit barreled into low-interest-rate-and-increased-remote-work-fueled demand. As a result, the median sales price for a home in the U.S. grew from $313,000 in early 2019 to $428,700 in early 2022.
New research from Freddie Mac shows that first-time homebuyers were “the major driver of the increase in demand. In 2021, Freddie Mac financed 554,000 loans for first-time homebuyers—up 22% from 2020,” the chief economist Sam Khater writes. “That’s the highest level since tracking began in 1994” (emphasis my own).
Becoming a homeowner 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 stop renewable-energy projects or mass transit from being built, are very weird and represent a very small percentage of people who own homes.
So why am I worried about these new homeowners? Because I believe that many of them will soon be desperate to maintain their property value—a key ingredient for NIMBYism. (If you’re wondering why NIMBY-ism is bad, you can read my longer-form thoughts here. But it plays a large role in our critical undersupply of housing, our inability to build mass transit, and the floundering of renewable-energy projects such as wind and solar farms.)
The economist William Fischel’s book The Homevoter Hypothesis details the way that homeowners become “homevoters” and act to head off potential declines in their property value. Importantly, these homevoters become extremely risk-averse. Even if new condos down the street are probably not going to hurt your home value, why take the chance?
Millennials took longer than past generations to buy their first home in large part due to the Great Recession. But the low interest rates of the early 2020s made mortgage payments affordable to many, even as the price of homes skyrocketed. In their fever to take advantage of low rates, many of these first-time homeowners put it all on the line: Redfin found that “prospective homebuyers who offered all cash were more than four times as likely to win a bidding war as those who didn’t in 2021.” They also found that waiving pre-inspection improved a competitive offer’s likelihood of success by 25 percent. Another report indicates that a record share of homebuyers bought their home sight unseen.
So now a large swath of Americans not only have sunk much of their savings into new homes but also are more likely to come across costly issues with those new homes, given the frenzy with which they bought them. Unlike their older counterparts, who likely have more diversified savings portfolios, these young homeowners have tied their money up in their houses. While all homeowners care about the value of their property, it stands to reason that people who bought houses with potential resale-value issues—or who have no other savings to rely on in case of a medical or other financial emergency—will be that much more worried about any potential declines in value.
This is one of the first steps on the road to becoming a NIMBY: Feeling like your entire financial future rests on the worth of a single asset—an asset whose worth 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 sense that a neighborhood is “cool.” It’s a scary position to find oneself in, particularly in a country that leaves its elderly, sick, and impoverished without a sufficient social insurance net.
It’s possible that younger homeowners may be less prone to NIMBY-ism than their forebears. After all, they are more liberal and likely to be accepting of new neighbors, and they also are less likely to harbor anti-renter sensibilities, given that they spent more of their lives as renters themselves. But I’m worried—when personal finances square up against political ideals, guessing what the winner will be is not hard.
- The European Commission proposed a plan to ration natural gas, hoping to avoid a winter energy crisis should Russia cut back gas exports.
- A Georgia judge ordered Rudy Giuliani to testify in a criminal investigation into election interference.
- The disbarred South Carolina attorney Alex Murdaugh pleaded not guilty to murdering his wife and son.
- Peacefield: Conservatives “must face the reality that the Republican Party has become a menace to the Constitution,” Tom Nichols writes.
- Up for Debate: Conor Friedersdorf offers what he sees as the real reason Democrats are losing ground on education.
- The Weekly Planet: Robinson Meyer reports on what he calls one of the weirdest recent defeats to countering climate change.
- Famous People: Lizzie and Kaitlyn try to get into a buzzy art show. It does not go as expected.
(A 2018 story from the Atlantic archive)
ChuChu TV, the company responsible for some of the most widely viewed toddler content on YouTube, has a suitably cute origin story. Vinoth Chandar, the CEO, had always played around on YouTube, making Hindu devotionals and little videos of his father, a well-known Indian music producer. But after he and his wife had a baby daughter, whom they nicknamed “Chu Chu,” he realized he had a new audience—of one.
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Isabel Fattal contributed to this newsletter.