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STUDIES 

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Neighbors for Neighborhoods
EHO Reality  - May 15, 2026
Neighbors for Neighborhoods
by Jay Cochran
George Mason University
Economist; May 15, 2026
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A joint center of the New York University School of Law and Robert F. Wagner Graduate School of Public Service; August 8, 2018
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NC State
Poole Thought Leadership
May 11, 2023
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There is no reason to belive that MMH leads to affordable housing and instead prices may increase
YIMBY theory Standard supply-demand model Quantity of housing units Price D S₁ S₂ P₁ P₂ More supply Add units → price falls Affordability improves Reality in Arlington, VA High land-value prestige market Quantity of housing units Price D₁ D₂ Induced demand S₁ S₂ P₁ P₂ Land cost floor (~$800K–$1M/lot) Supply increases → price holds or rises New units price at luxury only Why supply-demand theory breaks in high land-value markets 1. Land value floor Arlington lots cost $800K–$1M+. Construction + profit margin means new units must price at $800K–$1.4M+ to pencil out. Affordability impossible at market. 2. Induced demand Upzoning signals desirability. Wealthier buyers & investors are drawn in, shifting demand right faster than supply grows. Net price effect: neutral to up. 3. Filtering failure Filtering (luxury → affordable over decades) requires massive scale. EHO cap: 58 permits/yr. Arlington adds ~100 units/yr vs. structural demand of 1,000s. 4. Inelastic supply Geography & built environment cap supply growth. Small lots, permit caps, legal challenges keep the supply curve steep. Supply elasticity ≈ near zero. 5. Land speculation Upzoning raises land values immediately. Landowners & investors capture the rezoning windfall before a unit is built. Ricardo's rent theory applies. 6. Market segmentation Luxury and affordable housing are not the same market. Adding $900K EHO units does not compete with $300K units. Submarkets operate separately. Bottom line for Arlington EHO EHO permits ~58–100 units/yr in a county of 240,000+. Land costs alone guarantee new units price at $800K–$1.4M. Single-family home prices rose ~7.5% YoY even as EHO was implemented. The supply curve in Arlington is nearly vertical — constrained by land cost, geography, litigation & permit caps — so demand shifts dominate. Standard S&D predicts affordability only when supply is highly elastic and new units compete across price tiers. Neither condition holds in Arlington.
YIMBY v NIMBY Supply & Demand infographic
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Upzoning and Single-Family Housing Prices

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