No college for you!
That's the message California's state Supreme Court sent to aspiring students at UC Berkeley. In a decision released Thursday, the court ruled in favor of local activists who challenged plans to increase enrollment at the most selective campus in the University of California system. Class size will be frozen at 2020-2021 levels, and at least 1500 admitted students will be asked to change their educational plans for next year (some may have their admission rescinded altogether).
The case is a particularly stark example of the "not in my backyard" (NIMBY) movements strangling development in many cities. In interviews, the leader of the campaign against enrollment increases has been clear that he simply does not want more residents — or buildings to house them — in Berkeley.
As a matter of both psychology and microeconomics, that makes perfect sense. Homeowners often chose particular neighborhoods or municipalities because they liked conditions at the time of sale. They also want their property values to remain as high as possible. Both attitudes are encouraged by tax policies and cultural habits that push Americans to treat houses as investment goods as well as places of residence.
When they're given veto power over other goals, though, those sentiments are a disaster. By constraining the supply of housing, NIMBYs create an obstacle to social and economic mobility for people who can't afford to live near jobs and other opportunities. Opponents of the Berkeley expansion plan argued that an influx of students would price out current low-income residents, while benefiting disproportionately wealthy students. Even if true, that's a consequence of the zero-sum situation created by the refusal to build, not increasing enrollment as such.
There's an important generational aspect to these tensions, too. Incumbent homeowners tend to be older than new residents or renters. As prices have risen, moreover, the median age of home buyers has also increased. The result is a political economy that benefits the old at the expense of the young. The Berkeley case has attracted national attention because it so vividly reflects that conflict.
You can find a similar pattern for other issues and in other parts of the world, too. Collapsing fertility rates, which may be correlated with rising housing costs, mean a future with many fewer workers relative to retirees. In order to maintain the same level of benefits, those workers will have to pay a higher portion of their income in taxes. It's gerontocracy as political economy.
It's easy to diagnose these pathologies. It's harder to change them so long as voter turnout rates, which are also correlated with homeownership and wealth, differ so much by age. Eventually they'll die, but in the meantime the baby boomer generation and even older Americans who continue to dominate our national life don't have much to worry about. The leader of the anti-enrollment activists in Berkeley? He spends half the year in New Zealand.