Why Homeowners Hate Real Estate Developers
Listen to the Audio Mises Wire version of this article.
On August 12 the president tweeted “The ‘suburban housewife’ will be voting for me. They want safety & are thrilled that I ended the long running program where low income housing would invade their neighborhood. Biden would reinstall it, in a bigger form, with Corey Booker in charge!”
Commentators on MSNBC and CNN took issue with the tweet, referring to it as a “racist dog whistle” and believing the president is out of step to believe apron-clad June Cleavers are worried about people of color moving into their neighborhoods.
Right or wrong, the president, in this case, knows of what he tweets. Go to any city council meeting when a developer attempts to rezone property for high-density zoning, and angry neighbors appear en masse, organized and vocal, not an apron in sight.
In a town as small as Auburn Alabama, angry residents packed city hall chambers to protest proposed student apartments. I wrote of one particular meeting where a woman claimed,
these “students are just nomads” and don’t care about the city the way a homeowner with a white picket fence does. What’s worse, according to the speaker, is new apartments create vacant older units whose owners must lower rents and attract low-income tenants.
“No more poor people in Auburn,” she concluded, not embarrassed by the collective groan in the room or Councilman Tommy Dawson’s quick rebuke. She clarified she was talking about poor people from Mexico.
In tiny Boulder City, Nevada, outside of Las Vegas, the local citizens have no interest in any new development. My former employer purchased a mobile home park out of bankruptcy with the intent to build a new neighborhood of affordably priced townhomes. The local residents fought him at every turn. In a piece for fee.org, I related what happened at a public meeting for the approval of a couple of minor variances from city code to make the project work.
A couple agitators quoted the five criteria of variance approval from a Maine township and insisted this project didn’t meet two of the criteria, as if a town’s laws located hundreds of miles away were relevant at all. One protester told the commission that approving a variance is allowing the applicant to break the law, implying the commission members would be accessories to a crime.
When it was mentioned that affordable housing would be built on the site and fancy drawings were displayed, a gentleman snarled that the town didn’t need affordable housing and it wasn’t the city’s business anyway.
The group’s coup de grâce was that the developer was shamefully maximizing his profit. Of course, they didn’t know that zoning for up to 127 apartment or condo units had been obtained a couple months earlier and our proposed project was for just 66 units. These busybodies didn’t know the costs of the project or how fast the units would sell, or whether the units would sell at all. By the looks of most of them, none had taken any risk beyond shoving a few coins into a slot machine.
The homeless crisis in California is a direct result of the “not in my backyard” movement. In 2017 one state legislator tried to pass legislation to keep local antidevelopment zealots from stopping construction. The New York Times reported,
A full-fledged housing crisis has gripped California, marked by a severe lack of affordable homes and apartments for middle-class families. The median cost of a home here is now a staggering $500,000, twice the national cost. Homelessness is surging across the state.
A nurse making $180,000 a year told the Times she commutes eighty miles each way to her job, because she couldn’t afford housing close to her job. But, legislation to restrict zoning restrictions meets fierce opposition from homeowners, environmentalists, and neighborhood groups. The mayor of Santa Barbara claimed that any restriction from the state level would be “giving developers a great gift and not giving residents and voters a chance to cast their opinions about what happens in their own neighborhood.”
Adam Nagourney and Conor Dougherty wrote, “cities regularly make developments smaller than their zoning allows, something that gradually chips away at future housing production.”
“People here feel like this is a special place, like people in any town or city do,” said Chris Coursey, the mayor of Santa Rosa. “And they want decisions about the future of the community to be made by people in the community who they can actually talk to about this.”
Yes, everyone feels their neighborhood is special and they don’t want any low-income neighbors moving in who will lower their property values.
In Las Vegas, the battle over the development of the former Badlands Golf Club went to the state’s supreme court. In an email obtained by Channel 13 from one then Las Vegas councilman to the rest of the council, he refers to the property owner/developer as an a**hole, mother****er, mentally ill, and worst of all, as imposing surrounding homeowners with “a horrible cost of security in your home and loss of values.”
At a council meeting, the councilman said of the Israeli developer, "You have rights, but you've got to stop treating these people like a bunch of unruly Palestinians getting thrown—you know—a concrete block settlement thrown into their land right there."
The bankrupt Black Mountain Golf and Country Club in Henderson, Nevada, has sat fallow for a couple years as neighbors fought redevelopment. While the developer (my former employer) finally gained rezoning approval, the process took over four years.
"Not only are they putting houses on it. They are putting houses that are not acceptable to us,” Denell Hahn told Carla Wade of KTNV13. “Very high density. Very tiny streets. We're already maxed out on traffic. We are already maxed out on schools and public services."
"I've lived on the golf course since 1975,” said John Cahill. “And I have four family members that have lived there since 1962 and they looked out on the fairway every day. And all that has gone away."
Homeowners believe their property rights extended far beyond their property lines. They want to dictate who lives near them, how much money their neighbors make, what their neighbors look like, and most importantly, as Ms. Hahn said above, what the houses in their neighborhood look like and what they cost.
The president might not know much, but as a real estate developer, he knows what homeowners fear most.