Thinking about the Coase theorem. What would happen if there was a way to just paid NIMBYs for new buildings next to them. For example, when a new building goes up, developer pays each resident within 2 blocks or so, say, $1000 or so
If a new building comes up next to me and I get nothing but crowding and neighbors I don't like, obviously I'm going to oppose it. If I get some $$$ that might change my feelings. I guess the question is, what's the effective WTP of a representative NIMBY for keeping others out?
I get all the responses about consolidation as a first-best, but in practice it's not going to happen everywhere. Why not some form of externality payments as a second-best?
Even if the payments aren't calculated correctly, in a simple model, something is better than nothing here as long as you undershoot the optimal subsidies. You basically want to get the trades where the holdout value is like $5000 and the mover value is like $50,000,000
There are obviously subtleties/details/etc but honestly I think not that many, relative to the massive distortion that ppl who effectively have control + property rights, have no incentives/no participation in the upside from ppl moving in
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