The “Yes in My Back Yard” movement to build more housing recently won a major victory in California. A bill (AB 2011) upzoned many commercial areas to allow multifamily apartment construction. Another bill (AB 2097) eliminated the requirement that developers provide parking spaces in developments near mass transit, even if they choose not to. A recent blog post by Darrell Owens Discusses the political economy of these changes:

The [building] Trades knew the legislature was desperate to pass a housing bill and made it clear that all new housing needed to be built exclusively by unions. In 2020, they demonstrated their seriousness by single-handedly smoking the entire housing agenda and threatened to do so again by opposing AB 2011.

But this time more unions came into play: The Carpenters Union, which represents many construction workers, supported AB 2011 and rallied loudly. In the legislature, there is a world of difference between supporting a bill on paper and coming together to support the bill you support. Carpenters and SEIU did the latter, which made all the difference.

The Carpenters’ view was that a lack of housing construction led to the decline of construction labor unions, and that it was in the union’s best interest to keep the housing supply in line with the demand for jobs. The other big union supporters of SB 2011 weren’t construction unions at all — it was SEIU, the Public Workers Union and the School Workers Union. They supported AB 2011 because their workers were affected by housing shortages. This was a deep entry of non-construction unions into the land use debate.

Note: Wayne’s blog post provides more detailed information on what is in the two housing bills.

It reminds me of transportation deregulation in the 1970s and 1980s. Over time, the regulations became so burdensome that they imposed large costs on the economy. Although losing from deregulation, it is not a zero sum game. When regulations are highly counterproductive, it eventually reaches a point where the winners from deregulation are in a position to gain more than the losers insiders. In fact, in some cases regulations can become so burdensome that even insiders benefit from removing them. I suspect that many Communist Party insiders benefited from market reforms in the 1990s, as they were well suited to take advantage of the new (and much more efficient) market economy.

In recent years, California’s construction industry has shrunk dramatically from its heyday in the second half of the 20th century. It appears that things have reached a tipping point in recent years, where the political coalition for YIMBYism is beginning to win the battle against the still-powerful NIMBYs.

Rest assured. While progress is being made, I won’t be satisfied until a 50-story condo tower is built next to my beautiful home in a quiet part of Orange County.

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