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A great post by Ryan Avent critiquing the notion of "sunk costs," particularly as (speciously) applied to suburbia. In particular, Avent shows why, when talking about suburban housing, the concept of "sunk cost" is not (or should not be) a disincentive to selling.

www.ryanavent.com/blog - Preview

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Ryan Avent argues a perspective against NIMBYism here, which never occurred to me before: that "the biggest problem with public involvement and development is that some of the biggest beneficiaries of new development have no seat at the table–those who’ll be living at to-be-constructed residences. Even if you bring all neighborhood stakeholders in, educate them, and get their opinion (eliminating squeaky wheel bias), you’re still not getting the views of all interested parties." He continues as follows:

"However the planning process addresses public participation, policy should begin with a pro-density bias to reflect that fact that other things equal, developments will always be less dense than is socially optimal. That’s because the people who would like to be residents of an area but aren’t benefit from development but have no political say in the matter."

Got that? In ciites, you should plan for optimal density (because that's ecologically efficient, too), but the NIMBYs will argue against density, and they will make those who want to move into the neighbourhood pay the additional cost of keeping density *below* optimal levels. As Avent puts it, "we need to determine whether the burden is on current homeowners to pay for the right to exclude additional residents, or if the burden is on non-residents to pay for the right to live there. Current policy is de facto the latter."

www.ryanavent.com/blog - Preview

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