I was visiting family in Florida the past few days when I was told that some of the neighbors in their development were unhappy that a new higher density housing development was being built a few miles up the street next to the neighborhood supermarket. Their neighbors were concerned these town houses would "change the character of the neighborhood" by adding almost 500 additional families and their cars. The neighbors used terms like "low-income housing" to emphasize that these townhouses were not wanted.

This bothered me. It was bad enough that these euphemisms such as "change the character of the neighborhood" were probably being used as cover for racism or classism ie. a desire to not live within a 10 mile radius of "people that shop at Walmart" or (gasp!) "immigrants.” Even more worrying was the general sense of entitlement behind their words. For some reason, the neighbors felt that they had a right to tell the rightful owners of a piece of land what they could do with it and others where they could live solely by owning another piece of property in the same zip code. In their view, living in a neighborhood should give them a right to a veto over anything that happens in it.

If you asked the neighbors if they believed in private property, they’d surely tell you yes, after all they are patriotic Americans, not some sort of red commies!Well, private property, it turns out, provides a mechanism that will let the neighbors get what they want…if only they’d use it. We see the mechanism used in big cities all the time. Let’s take a look at how it works:

A developer wants to build a tall building with a beautiful view of the harbor but doesn't want someone to build another building in front and block their billion dollar view. To prevent this from happening, the developer will negotiate with the owners of adjacent plots of land to purchase the air rights - the right to build over a certain height. In exchange for not building a tall building that will block the view, these owners are compensated by the developer in a voluntarily exchange of value.

If our not-so-friendly Florida neighbors don’t want these apartments-for-people-that-might-shop-at-Walmart (disclosure: I shop at Walmart) to be built, they are more than welcome to buy the land. As owners of this land, they could use or not use it as they please. But they didn't buy the land, someone else did. And that person bought it acquired the right to use it as he pleases. What pleased him was to build housing that he thought the marketed needed.

Presumably, these friendly Florida neighbors were either unwilling or unable to pay the market cost to own the land. Instead, they chose to complain to anyone who will listen while simultaneously trying to use the blunt tool of government - coercive force - to take what they can't afford to pay for. They want property rights over $100 million of land but they can only afford a $200k condominium. Instead of respecting the rights of owners or becoming owners themselves, they instead try to take those rights by force. And thus we see what Not-In-My-Backyard-ism (NIMBYism) really is: a highly incentivized tool for people who feel entitled to live above their means and at the cost of the property rights of others. It lets morally-questionable people leverage their $200k condos or $500k houses to take rights over millions or billions of dollars of other people’s property.

Unfortunately, the incentives are such that we’re unlikely to see the disappearance of this phenomenon any time soon. In the meantime, you’re welcome to tell me what to build in my backyard^*, but only if you buy it!

^*Just kidding! I live in Hong Kong where only decabillionaires can afford a backyard! Also, all land is owned by the state.