How Self-Interest and Symbolic Politics Shape the Effectiveness of Compensation for Nearby Housing Development

Policy with concentrated costs often faces intense localized opposition. Both private and governmental actors frequently use financial compensation to attempt to overcome this opposition. Using the policy of new housing production, we measure the effectiveness of financial compensation in winning policy support. We build a novel survey platform that shows respondents images of their self-reported neighborhood with hypothetical renderings of new housing development superimposed on existing structures. Using a sample of nearly 600 Bostonians, we find that compensating nearby residents increases their support for nearby market-rate housing construction. However, compensation does not influence support for affordable housing. We theorize that the inclusion of affordable housing activates symbolic attitudes, decreasing the importance of self-interest and thus the effectiveness of compensation. Our findings suggest greater interaction between self-interest and symbolic politics within policy design than previously asserted. Together, this research points to opportunities for creative coalition building by policy entrepreneurs when facing opposition due to concentrated costs.