In Minneapolis, real estate developer Cody Fischer aimed to take down one big house and instead build an energy-efficient, four-story, 32 unit apartment building. He got the main approval to do his project but then had to halt.
A group of environmentalists sued the Minneapolis government because its housing plan did not undergo environmental review. They believed the increased density would harm the city’s water, air, and ecosystem. Fischer’s proposal was also initially rejected by the planning commission because local neighbors were against it (concentrated interests of a few).
Eventually, the state government stepped in and removed these legal obstacles for cities like Minneapolis that had a detailed housing plan. Fischer and other developers were able to start their projects.
This ties to Becker’s conclusion that no policy that lowers social welfare will be passed. Increasing housing will bring about positive social welfare. The two competing groups were developers (S) and neighbors/environmental group (T). Ultimately the pressure by developers won, implying a larger group size and higher resources per capita. Free riding didn’t break down the group. Additionally, higher level government can be more effective in addressing broader issues like housing. At the local level, private interests (neighbors) can overcome the greater social interest (those who can't find housing).
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