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The Case for Density

Every quarter, the U.S. Department of Housing & Urban Development's (HUD's) Office of Policy Development & Research publishes a periodical called Evidence Matters. This spring's edition, called "Regulatory Barriers and Affordable Housing," is particularly enlightening, and I'm including a link to it here. I have abstracted some of the key points below.

The thesis of the article is that "zoning and land use regulations increase housing prices" (p. 4) and that there is "a strong correlation between the severity of a city's barriers to apartment construction and the percentage of households spending at least 35 percent of their income on rent." (p. 5). The article also ties strong NIMBY-ism (a "not in my back yard" perspective) to higher housing costs, stating that "Strong NIMBY opposition in places of opportunity may have the overall effect of reducing the amount of newly constructed affordable housing built in these areas." (p. 6)

While the reasons behind many types of zoning are good and necessary and benefit the community at large, zoning is also affected by subjective citizen opinions and preferences. The article points out that "Residents of growing suburban communities are demonstrating strong demand for low-density housing." (p. 12) Because of this, "…in modest and high-cost housing markets, local governments use their zoning powers to price out low-income families, bowing to pressure from upper-middle-income households to preserve or increase their home values." (p. 14)

Regulatory Barriers
The regulatory barriers to residential development that increase housing prices include the following:

  • Zoning that is designed to limit density, reducing the number of people that can live on a site, increasing the cost of land, and increasing the cost to potential renters. Density-related zoning includes:
    • Limits on height 
    • Limits on floor area ratio (FAR) 
    • Requirements for ample parking
    • Requirements for setbacks and side yards 
    • Open space requirements
    • Lot size minimums
    • Requirements for single-family homes
    • Restrictive design guidelines
    • Unit mix requirements
    • Prohibitions against accessory dwelling units or small lots
    • Prohibitions against manufactured housing

  • Lengthy permitting processes that delay construction and payment, require revisions to plans, and invite opposition to projects. Elements that make the development process more expensive include:
    • Lack of standard requirements related to affordability
    • Complex planned development processes 
    • Multiple levels of review that are not coordinated or have long waiting periods between them
    • Forums for community input
    • Different processes and requirements in different jurisdictions
In addition, NIMBY opposition, while not a product of regulation, can be exacerbated when zoning and processes are not constructed to ease the development of multi-family buildings.

Recommendations
The article makes a variety of recommendations:

  • What municipalities can do to reduce housing costs:
    • Review and update existing policies and get rid of those that are outdated
    • Establish by-right development for desired affordable housing
    • Adopt form-based codes--meaning that community input is incorporated into the code, not into every individual project
    • Coordinate public hearings to reduce waiting periods 
    • Streamline permitting processes to reduce approval time frames
    • Loosen restrictions on alternatives to single family homes (e.g., accessory dwelling units) 
    • Implement inclusionary zoning 
    • Build in flexibility to adjust to changing market conditions 

  • What states can do to reduce housing costs:
    • Require local and regional housing needs assessments 
    • Support local communities by providing technical assistance and financial incentives to implement zoning frameworks that encourage denser development 
    • Empower localities to align their own resources to create incentives for development 
    • Authorize communities to combat or moderate NIMBY opposition to new development