This post is to attempt to form and share my thoughts on how bad incentives lead to NIMBYism, and to open the discussion to how we could solve it with a better incentive structure.
NIMBYism
This post isn't intended to be an introduction to the topic, so I'll just provide some resources for those not familiar with it. Firstly, here's a great video by a Canadian couple who live in Montreal about how "Not In My Backyard" activism contributes to the housing crisis that several countries in the developed world are currently facing.
Here's another great one by City Beautiful, about how NIMBY's weaponize the concept of "Historic Neighbourhoods" to prevent any change in theirs.
And of course, there's always the wikipedia article for background.
https://en.wikipedia.org/wiki/NIMBY
People are extremely overinvested in their homes and not invested enough in their community.
In general, NIMBY's are almost always homeowners. For the vast majority of people who own one, a home makes up a very substantial portion of their net worth. For Americans, it typically represents 70% of net worth. In the meantime, people don't have any direct financial stake at all in their local community (be it neighborhood, town, district, city or county).
Loss Aversion
An obvious consequence of this is that a change in value of your house has a massive impact on wealth for most homeowners. Further, there is a psychological tendency for people to be disproportionately more concerned with potential losses than potential gains known as loss aversion. Fear of losing wealth is a much bigger motivator than the possibility to gain it, and combined with the tendency for people to get more conservative and have more wealth tied up in property as they get older, it is hardly a wonder that people get irrationally fixated on the possibility of some new development in the local area potentially destroying their net worth.
Arguments for how the development could actually make your neighbourhood more valuable, and thus indirectly raise the value of the home fall on deaf ears because the potential for losing home value weighs much more on their minds than the vague potential for indirect gains by increasing the value of the neighbourhood or region overall.
Community Stakeholders
This is not intended to be a fully formed solution, but perhaps the starting point to think about one. The details would need to be worked out, but for now I just want to express the basic idea.
What if people did have a financial stake in their local communities? I don't mean like homeowners associations, as that is just the same homeownership but acting as a collective. Imagine there was a corporation, with shares that were "airdropped" to everyone who lives in a neighbourhood (not just the homeowners, but renters too). Then every day, each person residing in the neighbourhood is automatically given more shares. Thus, living in a community for longer gives more new shares every day.
The value of shares would need to be somehow connected to the actual financial health of the neighbourhood. Perhaps buying a home in the neighborhood would require a certain level of shareholding in the community. Or perhaps shares would represent access or ownership of local services, and perhaps those would then pay out dividends every month or so. Shares could be used to raise money for development, bringing in outside capital. There could also be limits on how quickly people can divest, buy or sell, and limits or differences in benefits for external shareholders.
However it ends up implemented, the important point is that if residents have some portion of their net worth directly invested in their community, not just specifically the home, people may be more inclined to think about how NIMBYist behaviour damages the local community, and the losses incurred by not allowing the neighbourhood to grow and develop.
The site I am writing on now is based on Hive, a decentralized network based on community stakeholding. Some ideas and lessons could be drawn from how things have worked here.
Conclusion
Those of us on Hive understand the value of being invested in a larger community of people, however Hive is an online and geographically distributed network of people, bringing the benefits of community stakeholding to a real world, local neighbourhood or town is likely to bring new challenges. Likely, it would need to be tried on a small scale, to find out what works and iterate on that.
Do you think people would move away from NIMBYism if they had a financial stake in their local community?