Association for Public Policy Analysis & Management

California’s high housing demand, combined with a lack of new housing supply to meet this demand, has resulted in its home prices being some of the highest in the nation. A reason often cited for the lack of new affordable housing is NIMBYism (not in my back yard) due to existing homeowners’ fear that proximity to affordable housing reduces their property values. Using a hedonic regression analysis of home prices from Sacramento County (CA), we find that an increase in less than high school educated, poor (and lower income level households), and household size within the Census Tract that a house sits in, lowers its sales price. This is straightforward evidence of the need for California, and states in similar positions, to take seriously the claim put forth by NIMBY groups as they consider policy interventions to address housing affordability. With this understanding, we conclude with possible policy interventions to consider.