The US needs more than 7 million additional affordable housing units in order to adequately house the nation’s lowest earners. Unfortunately, there are several obstacles to expanding affordable housing stock. Zoning laws are among the largest factors.
Zoning laws are regulations that oversee housing construction and development. Their primary purpose is to create residential areas that offer a high quality of life. For example, zoning laws may regulate that chemical-producing industries cannot operate within a certain distance from occupied homes.
However, zoning laws have also been used to promote segregation and homogeneity in neighborhoods. For example, some jurisdictions have placed minimum parking requirements for new multifamily units. On the surface, this may seem practical, as it reduces the use of on-street parking.
However, it also greatly increases developers’ construction costs. As a result, developers may aim to produce fewer, more expensive luxury units rather than building higher-density housing. Zoning laws can also outlaw multifamily units in areas with single-family homes. This prevents neighborhoods from housing residents from diverse economic backgrounds.
Many jurisdictions also prohibit single occupancy properties, which offer cheap, partially communal accommodations for single residents. The dearth of these properties has led to single individuals paying a higher percentage of their incomes toward rent or mortgages.
Zoning laws are set at the local level, and changing these laws can face stiff opposition. While the vast majority of Americans want more affordable housing, many do not want these units developed near their homes.
This discrepancy is often known as NIMBY, or not in my backyard. Opponents of affordable housing projects cite various reasons for their stance. They may worry about a drop in existing property values, an increase in crime rates, or future tax hikes.
NIMBY advocates may not oppose affordable housing altogether, but may prefer for the project to take place in a different location. However, this can make new residential projects unfeasible, as other parts of town may not have the space or resources to add additional residents.
Developers, affordable housing advocates, and politicians have made a considerable effort to combat NIMBYism and restrictive zoning laws. For example, cities can reform laws to allow developers to convert single-family homes into multifamily units.
Some developer funding programs have included set-aside requirements to incentivize affordable housing. In order to qualify for funding, developers must ensure that a certain percentage of new units are reserved for individuals making less than the area’s median income.
These units must reflect the needs of the market so that there are appropriate units for individuals, couples, and families. This arrangement allows developers to recoup their investment and increase the number of market-rate units, while also providing affordable housing.
Changing property tax laws can also encourage developers to create more housing. In many cities, a residential building incurs more tax than a parking garage. However, if taxes became use-neutral, then developers would pay a flat tax based on the amount of land rather than property type. This could encourage more affordable housing developments.
Activists can also address NIMBY proponents’ concerns by demonstrating that affordable housing does not impact house values. For example, a study of affordable housing developments in Chicago found that developments for low-income residents actually increased housing prices in nearby neighborhoods. Affordable housing developments also do not result in an increase in crime. These outcomes have been observed in several other housing markets.
