America has an affordable housing crisis. For more than two decades, supply has not kept pace with demand. The result is housing — rental and homeownership — is out of reach for an increasing number of Americans each day.
Housing is out of reach for an increasing number of Americans each day.
It is not something impacting only poor people. It is crushing the workforce’s pocketbook. Even if you are wealthy, if you buy a house that costs double what it did just a few years ago, the crisis is impacting your life negatively. Wealthy business owners are closing their shops, holding back on expanding their brand and unable to maintain production of their product, because they cannot recruit and retain workers. All because of the housing affordability gap.
Using zoning, land use and incentive programs closely linked to the planning/zoning toolbox is the way many cities and states are searching for the light at the end of the tunnel.
The situation is so dire that “red” states that may have shunned subsidies and workforce housing programs are voting for land-use reform. And “blue” states that may have been viewed as protectionist are removing restrictions that slow bringing housing to market or drive up its cost.
Many states have grown so tired of local rules that make it impossible to build affordable and missing middle housing, that they have passed laws that preempt local control over some land-use decisions. Some have done away with single-family-only zoning — the majority of zoning in all of the land — and allowed Accessory Dwelling Units (ADUs), or even duplexes or triplexes, by right, in single-family districts.
Missing middle refers to the range of housing that fits between single-family detached homes and mid-to-high-rise apartment buildings. Many people grew up in such housing in the 20th century, but zoning restrictions tended to eliminate townhouses and fourplexes and segregated housing into only larger-lot, single-family zones or denser, taller apartment districts.
ADUs, also known as granny flats, are ancillary buildings on a single-family lot. They could be over a carriage house, in a converted garage or in a stand-alone building usually about 500 to 750 square feet. They add gentle density to a neighborhood while creating affordable housing and an income stream for the lot owner to help keep up with rising costs.
In Vermont, a pair of energetic planners is creating a new toolbox of affordable housing solutions in one of the nation’s oldest states. Amy Tomasso is the planning coordinator and Jacob Hemmerick, AICP, is a community planning & policy manager for Vermont Department of Housing & Community Development.
“We knew we had to do a zoning guide. Local zoning codes in Vermont were stuck on midcentury values with large lots and rules that made it hard to build housing that matched our needs,” Tomasso said. “We contracted with Congress for the New Urbanism to design a zoning guide called ‘Enabling Better Places: A Zoning Guide for Vermont Neighborhoods’ based on New Urbanist Principles such as complete streets, a mix of uses, and ways of expanding housing opportunities. The Vermont Association of REALTORS® (VAR), AARP and others helped fund it.”
Hemmerick explained that the Vermont Legislature backed the implementation of the guide with funding for a grant program to provide municipalities with resources to hire consultants to write local zoning that supports great neighborhoods. The legislators renewed that two times since the initial round.
The legislature has also added other benefits for designated neighborhoods, including a freeze on land gains tax for properties upzoned under the new scheme, as well as fee breaks for state wastewater permits in Vermont neighborhoods planned and zoned for compact development.
“Going back to Colonial times, Vermont villages had a pattern colloquially characterized as big house, little house in back and barn, small homes above general stores, carriage houses, and buildings with many porches and apartments. This accommodated multiple families and cottage commerce and industry in the barn or store,” she said. “Then our mid-20th century zoning code made it harder to build that historically occurring range of options and mix of uses. We stopped building missing middle housing, which is very much needed to accommodate a growing population of young families, the workforce and seniors wanting to downsize.”
To remove barriers to convenient and diverse neighborhoods with affordable housing, Tomasso said, “Vermont is presently building a toolkit for small-scale developers of less than 10 units.” It will show housing types, from an Accessory Dwelling Unit to a six plex, for incremental developers.
Hemmerick said the Homes for All project will have community infill case studies and a training summit for small-scale developers. The Vermont Department of Housing & Community Development, led by Commissioner Josh Hanford, selected five communities across the state — to include a range of demographics and existing infrastructure — and creates visualizations of neighborhood infill.
“The toolkit takes a comprehensive approach from permitting to financing. It will look at zoning as a foundation and visualize the missing middle housing types we need, so people can wrap their heads around what missing middle housing looks like and welcome it next door.”
Tomasso said much of Vermont’s housing is out of the price range of its workforce. There also is a need for affordable, accessible housing to meet the needs of seniors, young people, and people with disabilities.
Vermont just launched a pilot program with predevelopment funding for architecture, engineering and other expenses for smart growth neighborhoods in the state.
“Most land-use controls in Vermont are held by municipalities, so we want to give them a suite of tools designed to help them take the next step,” Hemmerick said. “We want to help make it easier to build a home in a livable neighborhood that Vermonters can afford. We want to get people thinking about working across multiple agencies and governments, so we can eliminate hurdles that stand in the way of homes people can afford.”
Earlier this year, Vermont joined Oregon, California, Washington and Montana as a state that preemptively banned local zoning codes that allowed only single-family houses. Now, duplexes are allowed in all single-family residential zones and triplexes and fourplexes in all areas served by water and sewer. Many activists for equity and inclusion have applauded these preemptions as a giant step toward reversing the impact exclusionary zoning has had on affordable housing and racial/economic segregation.
Planners and REALTORS® are spreading the message about the upside of zoning reform.
Planners and REALTORS® are spreading the message about the upside of zoning reform, which goes beyond affordable housing and includes equity, environmental and economic benefits.
VAR has made the creation of new housing the association’s top priority,” said Kathleen Sweeten, VAR CEO. “VAR supports policies that will create ownership and rental opportunities for workforce housing and the provision of incentives for employers who invest in the creation of housing for their employees. We support policies that will expand availability and affordability for homeownership.”
“We’ve seen a shift in the conversation in Vermont. The NIMBY comments common years ago are changing because the housing crisis has become so acute,” said Hemmerick. “Their kids can’t buy a home. Their grandkids can’t buy a home. Seniors can’t downsize. Their favorite hamburger shop is closing because they can’t find workers.”
Vermont has the second oldest housing stock in the nation. So there also are issues to renovations or allowing ADUs on a lot to meet 21st century housing needs and aging-in-place opportunities.
Tomasso said the agency works with AARP and other partners to focus on livability and walkability. Vermonters are buying into the benefits of universal design and housing and communities that support aging in place.
Aaron Shroyer is a senior advisor with the U.S. Department of Housing and Urban Development Office of Policy Development & Research.
“It’s clear that in cities there is downtown and areas where job centers are and these are the hubs of economic activity. But you look at how most of these big cities are zoned, they reserve an outsized portion of their land for single-family housing,” he said. “It sets an artificial cap on the number of people who can live there and the number who can live near the jobs. [People] pay a higher rent because the scarcity of housing.”
Shroyer said cities and the early suburbs had a mix of housing types, then areas were downzoned to allow only single-family houses, often on large lots. “That affordable housing stock is illegal to build in most cities, so it’s important to re-legalize it,” he noted.
Shroyer said cities should eliminate minimum parking requirements, which often mandate more parking spaces than the market requires. Studies have shown that parking spaces in a garage can add $30,000 or more to the price of a unit.
“I’m not the first person to say this, but our focus should be on building affordable housing for people and not for cars,” he said, noting that jurisdictions that do away with parking requirements often see more housing units on a development site.
In the single-family realm, Shroyer suggests removing something that is omnipresent in local zoning codes — minimum lot sizes.
“Larger-lot-size zoning forces a person to buy a house and a yard. Some people don’t want yards,” he said. “What you’re doing is guaranteeing less density. Houston lowered minimum lot sizes from 5,000 square feet to 1,400 about 25 years ago. I’ve read that it produced 80,000 more houses. Now we can’t say the smaller lot sizes are the causation for every house, but it seemed to bring more units to market and more options means more affordability.”
Shroyer agrees with many affordable housing advocates who say cities should allow missing middle and larger multifamily development by right — meaning no expensive variances or land-use changes are required. He also said cities could remove barriers to adaptive reuse and conversion of office or commercial buildings into housing.
“Cities and states can also enable housing production by converting land previously zoned for other uses. As work-from-home continues to be prevalent, the demand for commercial real estate has plummeted, so allow housing in commercial districts,” he said. “We also need to promote affordable housing options near transit and create more people-centered neighborhoods.”
Shroyer is encouraged by a year that has seen about 200 affordable housing policy bills introduced in various states and the majority of them approved. He said all political parties are realizing that more housing supply will help hedge against prices going up so dramatically.
Tom Larson, executive vice president of the Wisconsin REALTORS® Association (WRA), has been working on smart growth and housing affordability issues with state and local lawmakers for a quarter century.
In 2019, WRA commissioned University of Wisconsin-Madison professor of urban and regional planning, Dr. Kurt Paulsen, Ph.D., AICP, and his report, “Falling Behind,” highlights three main causes of the workforce housing shortage:
- Not building enough homes to keep up with population and income growth.
- Construction costs outpacing inflation and incomes.
- Outdated land-use regulations that significantly drive up the cost of housing.
- The results of these root causes of the workforce housing shortage bring about the following results:
- Housing costs on the rise.
- A severe decline in homeownership.
- A continued decline in overall housing affordability.
The report and WRA’s government relations work struck a chord, because eight different pro-housing legislative measures passed with bipartisan backing last year and in the most recent session, five major housing bills passed with almost unanimous support. The highlight is a $525-million revolving loan program for workforce housing.
“Our legislature is not a fan of TIF (Tax Increment Financing), tax credits or grants. It favors a revolving loan program, so the money gets paid back,” Larson observed.
Larson said another issue in the Badger State has been Not In My Back Yard (NIMBY) opposition to affordable housing, saying “you can enact the best land-use regulations you want, but you can’t get a project approved if neighbors oppose everything.”
Larson said two new statewide rules address this. The first is a development-by-right framework, which requires local governments to approve a residential development if the development is consistent with the local development regulations. It gives local officials the spine to make the correct, but politically unpopular decision.
The other change is if local government turns down a development, the applicant can appeal directly to the court and that ruling stands. In the past, courts overturned zoning decisions, but remanded it back to the municipality. The long cycle of winding through staff review, lower hearing boards and a vote by elected officials drove up costs and sometimes killed missing middle and urban infill projects that would have addressed the housing crisis.
Josh Schoemann, county executive of Washington County, Wis., is leading the charge for affordable workforce housing in his area north of Milwaukee.
The biggest challenge is having housing the workforce can actually afford.
“The biggest challenge is having housing the workforce can actually afford. They are costed out of our community,” he said. “I looked up on REALTOR.com and found three houses for sale at $300,000 and below in the whole county.”
Schoemann said the skyrocketing cost of homeownership is making it hard to recruit a workforce and to keep local college graduates in the community. “We focused on Next Generation Housing. We identified very early on that our zoning would not let you build on a single-family lot less than 8,000 square feet and our regulatory hard and soft costs added about $80,000 per lot. Builders tell us they can create a 1,200 square-foot home in the $250,000 range — but when you tack on all the regulatory and infrastructure costs, the price pretty quickly hits about $400,000.”
The county created a pilot project in the village of Jackson, where it funded some infrastructure and allowed smaller lots. The Oaks of Jackson features 105 units — mostly single family with some duplexes and quadplexes — on about 20 acres next to the village hall. Seventy-five percent of the units will sell at $320,000, and 25 percent will be $420,000 or below.
The county invested $7.5 million to lower the cost of homes in the pilot project. Another $2.5 million is in a downpayment assistance program. To get $20,000 of forgivable downpayment funds, a person has to commit to volunteering at a nonprofit to serve the community for five years. If the person does not volunteer, they must pay back the loan five years after receiving it, but at zero-percent interest.
Schoemann said the county has a “fair amount of rentals” so it is not funding affordable apartments. The goal is to create 1,000 units of owner-occupied Next Generation Housing over a decade.
Larson said another provision in Wisconsin, aimed at streamlining workforce housing, places limits on what neighbors have standing to file a court appeal on a zoning decision.
“It limits appeals to those who suffer actual damages. If you’re a neighbor with stormwater put onto your property. that’s actual damage,” he said. “If you are down the road a mile or two and you worry about a few more cars on the road, (due to the development) you do not have standing.
“Under prior law, if you were within a quarter mile of a rezoning, you could file a protest and that triggered a super majority vote. Now that does not happen — only a simple majority is required,” he said.
The state housing authority’s loans to developers involves a competitive process. One of the ways to earn a higher ranking is to be located in a community that has engaged in the most significant zoning regulatory reform.
Larson said part of the reform is allowing smaller lot sizes and more units per acre. “We have found it very persuasive to explain to local officials and members of the public that today you can’t build the housing that most of us grew up in — because local regulations won’t allow it. That frames it. It changes the narrative,” he said.
“We hear ‘We don’t want the others, those people,’” Larson said about the argument for exclusionary zoning. “But when they see the regulations wouldn’t allow themselves or their children to move into the community, it personalizes it. They think of it differently.”
Larson noted that zoning that allows smaller units close to neighborhood conveniences gives seniors a place to downsize into. That frees up housing inventory for young families. Young families, in turn, can rehab Wisconsin’s aging housing stock, where more than half of single-family homes were built before 1980.
Jenny Schuetz, a senior fellow at The Brookings Institution, who gave testimony this summer to the United States Senate Special Committee On Aging, emphasized that her views were her own. Her expert testimony to the committee, chaired by U.S. Senator Bob Casey, focused on an oft-overlooked aspect — housing that is both affordable and accessible to older adults and people with disabilities.
The U.S. housing shortage is creating acute housing affordability challenges for older adults and people with disabilities.
She said the U.S. housing shortage, caused by a gap of nearly 3.8 million additional houses needed to match population growth, is creating acute housing affordability challenges for older adults and people with disabilities. Zoning rules that prohibit all structures except single-family detached homes create direct barriers to building accessible homes.
“Single-family homes are less likely to have accessible features, such as a no-step entry into the home or a bedroom and bath on the main living floor,” she testified. “Historically, duplexes and triplexes have enabled multiple generations and extended families to live together — an important source of informal caregiving.”
CDC research shows one in four million Americans have some kind of disability. But Schuetz noted research has proven that less than 5 percent of homes are accessible for people with moderate mobility difficulties.
“Many older adults and people with disabilities need or prefer fully accessible apartments in elevator buildings. Yet all of these diverse structure types are illegal to build on the majority of residential land in communities across the United States,” she testified. “The lack of small, accessible homes in many neighborhoods limits the ability of older adults … to right-size their home while staying in the same community.”
While acknowledging that local government has most of the power of zoning and land-use regulations, Schuetz noted “the federal government has some policy levers that could help expand the supply and diversity of housing.”
“Congress should create financial incentives for local governments to revise their zoning in favor of allowing a wider range of structure types, and better integrate federal investments in housing, land use and transportation,” she testified. “Local governments and regional planning agencies would also benefit from federally funded technical assistance and clearer guidance on what types of zoning reforms work best in different local housing markets — tasks that fall well within the scope and mission of the U.S. Department of Housing and Urban Development.”
Schuetz said accessible housing and the housing needs of people with disabilities is a serious omission in publicly available data and academic research. “Federal agencies including HUD, HHS, and the Census Bureau should explore ways to address knowledge gaps and support high-quality, policy-relevant research on these topics,” she said of housing needs of people with disabilities. “Rising housing costs create more financial stress for low-income households and people living on fixed incomes.”
U.S. Department of Labor statistics show that people with disabilities are the most under- and un-employed of all minorities. Underscoring a crisis that marginalizes and denies dignity and quality of life for people with disabilities, Schuetz reported that only about 16 percent of low-income disabled Americans receive housing subsidies.