The most powerful voting bloc—homeowners—is financially incentivized to oppose new housing development that would lower prices. This political reality means politicians cannot address housing affordability without alienating their core voters, leading to policy stagnation and an intractable crisis.

The common belief that people oppose new housing to protect property values is likely wrong. A more rational explanation is that residents are protecting their existing quality of life from negative externalities like noise and traffic. Pro-housing arguments should therefore focus on improving neighborhoods, not shaming residents.

Housing scarcity is a bottom-up cycle where homeowners' financial incentive is to protect their property value (NIMBYism). They then vote for politicians who enact restrictive building policies, turning personal financial interests into systemic regulatory bottlenecks.

In markets like Silicon Valley, upzoning would increase land value so much that it would offset any decrease in structure price, making homeowners wealthier. Their opposition is often driven by non-economic factors or misinformation, not pure financial self-interest.

A new building causes tangible harm (traffic, noise) to its immediate neighbors, but provides an imperceptible benefit (a tiny drop in rent) spread across the entire city. This fundamental asymmetry of concentrated harms versus diffuse benefits ensures that organized, rational opposition will almost always overpower weak, widespread support.

Drew Warshaw frames the "Not In My Backyard" (NIMBY) phenomenon as a rational, if selfish, economic decision. Incumbent homeowners are incentivized to restrict new housing supply because basic economics suggest that increasing supply could decrease the value of their primary asset: their home.

The "Not In My Backyard" (NIMBY) phenomenon isn't born from malice. It's driven by older homeowners, who view their house as their primary retirement fund, acting out of self-preservation. They lobby for policies that increase their home's value, without considering the broader economic consequences.

Politicians at all levels actively restrict housing supply through zoning and other policies. This is not incompetence, but a deliberate strategy to protect and inflate property values, which satisfies the large and reliable homeowner voting bloc, ensuring re-election at the expense of renters and future buyers.

When an area becomes desirable, prices rise. The market's natural response is for entrepreneurs to build more housing, stabilizing prices. However, 'Not In My Backyard' (NIMBY) policies prevent this, protecting existing homeowners' property values at the expense of everyone else. The core issue is artificially restricted supply, not demand.