YIMBYs gain ground across the country, but NIMBYs persist

YIMBYs are gaining ground in the battle against their development-averse opponents — but the conflict is far from over. 

Policy battles are slogging along in markets across the country, where barriers to new housing have left developers itching to get in on the action. 

In New York, South Florida and Austin, lawmakers have claimed strides in removing the red tape keeping developers on the sideline. In Chicago, a new transfer tax could slow the development of much needed housing. 

Then there’s California. Los Angeles passed a transfer tax that raised alarms in the industry one year before Gov. Gavin Newsom and the state’s attorney general joined a court case in support of builder’s remedy, a groundbreaking pro-development state law.  

The Real Deal tapped reporters in each of these markets for its Deconstruct podcast, breaking down the progress — or lack thereof — YIMBYs have made, and what to expect for 2024. 

Los Angeles

California has emerged as the front lines for real estate policy action.

First, the city of Los Angeles passed Measure ULA, a transfer tax that applies a 4 percent tax for transactions between $5 million to $10 million, and a 5.5 percent tax on those over $10 million. Critics say the tax has put a freeze on the city’s market, from commercial sales to multifamily development. 

Builder’s remedy — a policy putting pressure on cities to pass a state-approved housing plan — emerged as an oft-cited stipulation for developers who can bypass a city’s zoning laws for affordable housing projects if a city fails to get state approval. 

“Builder’s remedy is loved by YIMBY groups,” said Bella Farr, TRD’s LA bureau chief and Deconstruct co-host. “It’s a way to fast-track housing development, specifically projects with affordable portions.”

The policy is especially popular in high-end markets like Santa Monica and Beverly Hills, where YIMBY attitudes reign supreme. 

New York

New York Gov. Kathy Hochul recently announced plans to replace 421a, which provides tax exemptions for developers that designate about 30 percent of new housing units for affordable housing. Meanwhile, New York City officials passed a new subsidy program for developers, but the details leave much to be desired. 

“We’re not gonna see developers who were banking on 421a try to use this program,” said Kathryn Brenzel, a senior reporter in New York. “It’s not really a replacement for 421a.”

That’s because the subsidy only applies to projects that are 70 percent affordable, with 15 percent of units set aside for formerly homeless individuals. That provision could be enough to dissuade developers. 

Texas

Austin’s new mayor is looking for a gradual solution to its housing shortage. 

Kirk Watson has made some progress on the development front, like allowing duplexes to be built on residential lots, softening parking requirements, and decreasing the minimum lot size. But he’s been met with resistance from the courts and local NIMBY groups.

“While YIMBYs have been racking up these wins, the courts have struck down some pro-development codes,” said TRD’s Texas bureau chief Joe Lovinger, calling it a “couple steps forward, couple steps backward situation.”

South Florida

Florida Gov. Ron DeSantis in March passed the Live Local Act, which creates incentives for developers who incorporate workforce housing into their projects. The law, which allows developers to bypass local height and density restrictions, sparked some resistance in some Florida cities. 

“That has created this conflict between developers and municipalities,” said Katherine Kallergis, a senior reporter in South Florida. The municipalities can “fight it, but they’ll probably be challenged in court.” 

Chicago

Chicago Mayor Brandon Johnson took a page out of Los Angeles’ book last year, proposing a transfer tax on real estate transactions. The law would increase the tax rate on real estate sales over $1 million to 3 percent from 0.75, quadrupling the seller’s tax bill. For those below $1 million, the tax rate would decrease. 

“The vast majority of real estate transactions would see a little bit of savings when they go to sell,” said Sam Lounsberry, TRD’s Chicago bureau chief. 

But that doesn’t mean it won’t affect development. Multifamily developments, which would almost exclusively trade above the $1 million mark, would be vulnerable to such taxes if developers looked to offload a project after completion. 

Few major metros are moving in Chicago’s direction — for the time being.

“Over the last decade or so, you really saw these YIMBY groups gain momentum,” said Kathryn Brenzel, a senior reporter for TRD in New York. “Elected officials have been listening to them.”

Check out TRD’s “Deconstruct” for a deeper dive into the YIMBY vs. NIMBY battle sweeping the nation.