Homes in Newark, where much of New Jersey's affordable housing was built under a kind of cap-and-trade scheme.
All right, all right, there’s no need to panic yet, neighbourhood Chicken Littles. The sky is not falling, nor has affordable housing cap-and-trade invaded your exclusive housing corner of American Dreamspace.
But it’s an intriguing idea. And amazingly, it has been tried before. (Full disclosure: it failed miserably to achieve its goals).
Is it worth another look?
Cap-and-trade has been put into effect by some governments as a means of controlling pollution. The emission of a particular industry is capped at a certain level. If they are unwilling or unable to reduce emissions to this level, they can pay for the extra pollution by purchasing credits from other industries that emit at levels below their cap.
Apply this thinking to affordable housing, and consider giving a NIMBY neighbourhood the option of accepting its allotted ‘cap’ of new affordable housing construction, or . . .
. . . achieving the cap by paying (trading with) other communities to build more than their share of affordable housing. Sort of cap-and-trade in reverse.
Cap-and-trade might allow NIMBYites to fulfill wider community responsibilities, while protecting their own neighbourhood. Financial outlay would allow a neighbourhood to have their cake and eat it.
For more on a New Jersey affordable cap-and-trade system that failed, together with thinking that might possibly make the idea workable, read more in CityLab: Why Not Try A Cap-And-Trade System For Low-Income Housing?