Land-use decisions affect everyone.

For five years I was part of an inadvertent conspiracy to widen income and wealth differences in San Diego. Because of my actions and those of my overwhelmingly white, upper-middle-class neighbors in a well-off San Diego suburb, we’ve enriched ourselves at the expense of lower-income groups. This neat redistribution was accomplished at the expense of, among others, the roughly one-half of San Diego’s population who rent rather than own their homes.

Our tool has been quasi-veto power over building and land-use changes in our area. For whatever changes that might adversely affect our interests, however slightly,we have an automatic response: Not In My Back Yard. In a word, we are the NIMBYs.

Participative democracy is big in California, a land where initiatives are easy to qualify for the ballot (which can run a dozen pages and more), and citizens’ groups are relied upon to make decisions politicians seek to dodge. Such citizen involvement, with its populist roots, sounds innocent enough. But once I became a participant, the hidden toll this system takes on “the other half” slowly dawned upon me.

Six years ago, I joined a community planning group in Scripps Ranch. Consisting mostly of local homeowners, the group reviews and makes recommendations on land-use decisions in our suburb. Several dozen such groups exist in San Diego, as in other big cities. Although our advice is not binding on city planning and zoning authorities or the city council, it is usually followed in great part.

I’ve always been in awe of our power,considering the millions of dollars at stake as we pass judgment on roads, housing densities, and commercial and industrial land use. But I am also an economist teaching at SDSU, as well as a landlord. These roles give me a different insight into the effects of such actions.

Any collection of local residents has a natural tendency to become parochial in its outlook. We tend to favor whatever enhances our community and our property values and disapprove of that which might hurt us, however slightly. Land-use issues are rife with what we economists call spillover effects, which can be positive or negative to the locals. If the vacant land next to your house is turned into a park or golf course, your home’s value may soar. But a high-density apartment complex would clearly depress neighboring house prices.

Accordingly,our votes favor housing with lower densities, higher-end commercial and industrial development, and more parks, school sites,and other public amenities. Despite the entreaties of developers who appear regularly before us and even make up some of our membership,we have, to a remarkable degree, molded our own development.

Thus sculptured, the suburban enclave of Scripps Ranch boasts of its sylvan advantages: large manicured lawns, forested open spaces, upscale shopping centers, good schools and parks, and an involved citizenry. Our “industrial parks” more resemble campuses, with executive offices and research and development buildings predominating.

Our property values reflect this desirability, having soared along with like suburbs across America in a well-documented trend of the ’80s. My house has doubled in value since its purchase seven years ago. Meanwhile, the older, denser, less-expensive neighborhoods of San Diego have not done nearly as well; their rate of appreciation in property values has been far less. So the gap between the two tiers of neighborhoods has grown not only absolutely but relatively.

A recent report by the economic research bureau of the San Diego Chamber of Commerce revealed the extent of this growing polarization. For the three years ending in April of 1989, the housing prices in the neighborhoods of Lemon Grove, El Cajon (East), San Ysidro, and Southeast San Diego increased an average of 38 percent, compounded. In contrast, home prices in the areas of NIMBY strength — Kensington, La Jolla, Rancho Bernardo, and Scripps Ranch— rose by an average of 62 percent,compounded.

Granted, other factors such as crime, drugs, and schools are at work in shaping supply and demand — and thus prices — of the two different kinds of neighborhoods. But the growing power of existing homeowners who lobby for favorable land use in their area cannot be denied. San Diego’s recent adoption of district elections for city council gives these neighborhood groups even more clout.

The growing gap between the two categories of neighborhoods has dire implications for income and wealth distribution in San Diego. Too little attention has been paid by economists to the interrelationship between people’s housing decisions and their resulting income and wealth over time. Being a homeowner in much of California has thrust many people into a net worth far above the norms relative to their income. It is not unheard of for some fortunate individuals to see their income in a given year exceeded by the appreciation in value of their house.

This auspicious turn of events can be advantageous to the homeowner in several ways. The value of a property minus the debt against it is called equity. One can borrow against a growing home equity in order to invest and increase one’s future income stream. In my own case that involved buying rental housing for the growing proportion of San Diego’s population that does not own. Some people tap their home equity and plunk it down on move-up housing. They thereby leverage up their appreciation gains with a larger “investment vehicle.” One can,of course, borrow in order to consume, although studies show that most people do not do so excessively.

Many borrow to pay for their children’s tuition. This is a commendable investment in human capital, which also happens to further widen income disparities between income classes into the future.

Some people simply stay put, enjoying ever-lower housing costs in inflation adjusted terms for the rest of their lives. This while their income cohorts who do not own must experience ever-rising rents and,in addition, forgo the numerous tax benefits of homeownership.

The haves and have-nots in California’s urban areas are increasingly identified by their housing decisions. The haves cluster in like neighborhoods, where they exercise an increasing degree of control over their destiny. They form automatic special- interest groups, which politicians dare not ignore, especially considering their demographic characteristics and voter participation rates. As NIMBYs, they tend to win by invoking environmental or quality-of-life arguments. Conveniently ignored is the fact that fewer new housing units translates into higher prices on existing housing units.

The have-nots in this game are, broadly speaking, all the residents of lesser neighborhoods. They may be renters, squeezed by rising rents due in large part to land-use decisions beyond their knowledge or control. They pay full freight at income-tax time and even unknowingly pay some property taxes that are built into monthly rents. The have-nots may even be owners stuck in declining areas who will never have the land-off at home equity so telling to financial security.

Sharon and Dave are typical of San Diego’s housing have-nots. They have been my tenants for four years in an older Santee fourplex building, which they manage for a reduction in rent. With an annual income of around $30,000,they would be homeowners in most any other American city.

But San Diego is America’s least affordable city for homebuyers. That doesn’t mean our home prices are the highest in absolute terms (Honolulu, Los Angeles, and San Francisco are higher), but the ratio of median income to median home price is least favorable here.

Sharon and Dave have saved up some money for a down payment and every so often search for a house. But each time they look,the prices have ratcheted up another notch.Even in relatively inexpensive Santee and Lakeside, they cannot find a house they can afford. Sharon is worried because her son and daughter are approaching adolescence and must share a bedroom.

Ironically, the have-nots often abet their own economic decline, especially where issues of the environment are concerned. It is widely agreed that new housing inevitably entails at least some ecological costs. NIMBYs in the affected areas quickly mobilize, aided by a press sympathetic to any picketers claiming to protect the environment. Developers can easily be painted as villains. Their actual role in lowering housing costs for homebuyers and renters alike by increasing the supply of available units is seldom given more than token voice by reporters. As a result, the have-nots are likely to harm their own interests when voting or signing petitions.

A recent proposal in the Scripps Ranch area to develop 1200 acres for 3360 housing units was stopped cold by local NIMBYs running a thoroughly effective publicity campaign.The new housing would have done much to dampen the rapid rise in San Diego’s housing costs. But some of the housing units (about one-third) would have occupied a large hill on the north side of Miramar Lake. Incidentally, the other hills overlooking the lake are partially developed,and the occupants of those houses were prominent in the drive to halt the development in order to “preserve the views for all San Diegans.” By mobilizing and artfully calling themselves the “Save the Lake Committee,” they circulated petitions and quickly gathered tens of thousands of signatures.

It wasn’t difficult. Few hurried shoppers outside a Kmart can resist the appeal to “Help save the lake— sign here to halt the developers.” How many people will dig deeper to discover the full effects of their choice? At one community forum to debate the Miramar Lake development, the one-sidedness of the process became clear to me. The developers explained their planned housing and accompanying public facilities. But the audience of 50 or 60 people was overwhelmingly hostile and vocal. When the press reports these noisy confrontations, the image forms of a fight between the little people and the establishment.

But not represented in that audience was a single black or brown face.Not represented, one can assume, were those who would move into the proposed homes from elsewhere in the city. Certainly not represented were those families who would then move up to the houses and apartments thereby vacated in other parts of San Diego.By thus ignoring the economic ecology of housing markets do we trample upon the budgets of the poorer and younger in our society?

The building of 3360 homes on 1200 vacant acres has been stopped at least for now.Ex-councilman Ed Struiksma, who favored the housing, was soundly defeated in the recent election, which also saw an anti-building tilt in other city races. The Scripps Ranch Planning Group recently elected a far more anti-building slate of homeowners to its membership. Meanwhile, rents and home prices continue their relentless squeeze on the have-nots of San Diego. And Sharon and Dave now plan to move to Michigan,where they can buy a house.