Although home production has been on the rise, one of the consequences of the 2008 foreclosure crisis was a slow rebound in home construction, which has contributed to an underproduction of current housing by an estimated 3 million units. To help with this, the U.S. Department of Housing and Urban Development released a new report outlining “innovative strategies” being pursued by state and local governments to remove barriers to increase the supply of affordable housing.
Earlier this month, the Biden Administration and HUD announced a plan to create 100,000 additional affordable homes across the country in the next three years. This report, which has been created as a part of that plan, was written to identify metropolitan areas with high housing costs and low production, and to identify and recommend best practices for localities and states to help encourage the production of new housing in high-cost metropolitan areas.
“This research is a testament to the Biden-Harris Administration’s commitment to increasing and preserving our nation’s affordable housing supply,” said HUD Secretary Marcia L. Fudge. “The research makes clear that there is bipartisan support for state and local reform to improve housing affordability, and underscores how the President’s Build Back Better Agenda would strengthen the federal government’s capacity to help jurisdictions meet the housing needs of their residents. HUD and the Administration will remain hard at work to build inclusive, equitable communities through affordable housing.”
According to the research, without significant new supply, cost burdens are likely to increase as current home prices reach all-time highs.
The report specifically identifies localities zoning laws as a prime example of what needs to be changed to allow for new affordable housing.
“Many communities limit residential development to primarily single-family detached houses, which can constitute up to 75% of the residential land in many cities, according to one estimate,” the report said. “Large apartment buildings are often perceived as the alternative. Many jurisdictions limit the production of diverse, unsubsidized housing options between single-family and large multifamily housing, ranging from duplexes to fourplexes, courtyard apartments, bungalow courts, and townhouses, which are necessary for meeting the range of families’ needs. This variety of housing, is sometimes referred to as 'missing middle housing.’”
Localities can change this by enacting “gentle density” laws that can allow for low-density multi-family units, such as a duplex or fourplex, to be built in single-family neighborhoods without significantly changing its character.
“States have begun recognizing that allowing gentle density by-right can be an effective way to produce more housing,” the report continued. “Regulatory changes that allow gentle density to be built by-right provide developers with certainty about the product and process, which reduces the risks, development time, and costs. Such changes could increase the number of homes available and bring down average housing prices in high-cost locations, while retaining the physical scale of the neighborhood.
The report singles out Oregon and their solution of outlawing local governments from banning duplexes, triplexes, and fourplexes, as a potential solution to allow for more affordable housing. It also cites California and Washington as examples which have allowed for additional units to be built on existing property by preempting local prohibitions on accessory dwelling units.
Other solutions include easing design and dimensional requirements at the local level so houses can use more cost-effective materials in the design process or reduce setbacks so larger units can be built on existing lots.
The findings of this research and its solutions “will be incorporated into HUD’s Regulatory Barriers Clearinghouse, which contains over 4,800 barriers and solutions and provides a catalog of information that spans all 50 states and over 460 cities and counties. They will also inform the locally driven zoning reform initiative in the President’s Build Back Better Plan.”