SPECULATIONS Why Are There NIMBYs?

ABSTRACT. An owner-occupied home is an un-usual asset because it cannot be diversi ® ed among locations and because it is the only sizable asset that most owners possess. Among the unin-sured risks of homeownership is devaluation by nearby changes in land use. Opponents of land-use change are called NIMBYs ( ̀ `Not In My Back Yard ’ ’). This article submits that NIMBYism is a rational response to the uninsured risks of home-ownership. It explores the possibilities and draw-backs of providing an insurance market to cover such risks. It concludes that some progress is being made towards developing such markets. (JEL R52) Residents who strenuously oppose devel-opment of land in their immediate area are often called ``NIMBYs, ’ ’ the acronymic per-soni ® cation of the expression ``not in my backyard. ’ ’ The oppositionof neighbors is an important problemin American land-use reg-ulation. It can frustrate the implementation of carefully planned residential development, locally desired industrial development, and placement of the necessary nuisances of ur-ban life, such as power plants and land ® ll