P = alpha – beta*F – gamma*f
F = FAR of subject’s lot
f = FAR of neighbors [an externality]
beta = marginal impact of own FAR on price
gamma = marginal impact of neighbor FAR
alpha = all other location factors

alpha, beta and gamma are typically derived through hedonic regression. Neighbor’s FAR (gamma) is almost always a negative externality. So, you can see that a NIMBY can improve his own property value through keeping F low by protesting new development. They aren’t as irrational as they seem…

P = alpha – beta*F – gamma*f
F = FAR of subject’s lot
f = FAR of neighbors [an externality]
beta = marginal impact of own FAR on price
gamma = marginal impact of neighbor FAR
alpha = all other location factors

alpha, beta and gamma are typically derived through hedonic regression. Neighbor’s FAR (gamma) is almost always a negative externality. So, you can see that a NIMBY can improve his own property value through keeping F low by protesting new development. They aren’t as irrational as they seem…

1. Not 500 feet from the Beach 44th Street subway station, the huge beach and boardwalk on the Atlantic Ocean is completely deserted, year-round. (Is there any other place in the world like this?)

2. For decades (perhaps forty years now), the area has reverted to nature with weed-filled lots occupying oceanfront property.

3. The only signs of life are in the hideous public housing projects, located further inland.

4. Some new housing is finally being built, but only after a generation of bureaucratic delays.

Is there any way that private unregulated real-estate markets could have resulted in a worse outcome?

Also, be it in the Rockaways or anywhere else, there seems to be no understanding that low urban densities result in dreaded “suburban sprawl”. If you don’t build up, then you have to build out.

Meanwhile, in Mumbai…

1. Not 500 feet from the Beach 44th Street subway station, the huge beach and boardwalk on the Atlantic Ocean is completely deserted, year-round. (Is there any other place in the world like this?)

2. For decades (perhaps forty years now), the area has reverted to nature with weed-filled lots occupying oceanfront property.

3. The only signs of life are in the hideous public housing projects, located further inland.

4. Some new housing is finally being built, but only after a generation of bureaucratic delays.

Is there any way that private unregulated real-estate markets could have resulted in a worse outcome?

Also, be it in the Rockaways or anywhere else, there seems to be no understanding that low urban densities result in dreaded “suburban sprawl”. If you don’t build up, then you have to build out.

Meanwhile, in Mumbai…

To be precise, the value of the existing dwelling decreases because of the negative externalities involved with sharing the neighborhood with more people. (there are some positive externalities too) Meanwhile, however, the value of the land under the dwelling increases. If there is a drastic shift in demand which causes the value of the land to approach the replacement cost of the building, then it will be a net benefit to the homeowner himself.

So, there often is utility in being a NIMBY. I will dig into my notes tonight and provide the econometric equations to support this.

To be precise, the value of the existing dwelling decreases because of the negative externalities involved with sharing the neighborhood with more people. (there are some positive externalities too) Meanwhile, however, the value of the land under the dwelling increases. If there is a drastic shift in demand which causes the value of the land to approach the replacement cost of the building, then it will be a net benefit to the homeowner himself.

So, there often is utility in being a NIMBY. I will dig into my notes tonight and provide the econometric equations to support this.