"Promoting housing affordability by combating exclusionary housing policies"

 

CFC # 41863 (Combined Federal Campaign) 

 

White House issues Housing Development Toolkit

focused on exclusionary zoning and other regulatory

barriers to housing development—and on solutions

 

As mentioned on the Home Page, the White House issued its Housing Development Toolkit in September, 2016. The Toolkit focuses on the devastating impacts of regulatory barriers (primarily in the form of local exclusionary housing policies), and points out various action steps that states and local jurisdictions can take to reverse those impacts. Further specifics from that document are summarized below.

 

Challenges

“Over the past three decades, local barriers to housing development have intensified, particularly in the high-growth metropolitan areas increasingly fueling the national economy.” (Toolkit at 5)

Local policies acting as barriers to housing supply include land use restrictions that make developable land much more costly than it is inherently, zoning restrictions, off-street parking requirements, arbitrary or antiquated preservation regulations, residential conversion restrictions, and unnecessarily slow permitting processes. (Toolkit at 5) 

“Researchers have also documented a sharp increase in the gap between home prices and construction costs, with stringent housing regulations now driving cost increases” increasingly. (Id.) Since at least 1980, average housing construction costs nationwide have remained about the same (inflation-adjusted figures), but average house prices have escalated.

For example, by 2005 prices were up about 140% (inflation-adjusted figure). As a result of the housing-led Great Recession, prices “bottomed out” at about 50% above 1980 levels, but by 2013 they had returned to 70% above those levels and were rising rapidly (again, adjusted for inflation). (Id.) Also, since 1960 average rent has risen by 64 percent, while household income has increased by only 18 percent (adjusted for inflation). (Toolkit at 7)

The Toolkit also summarizes the mounting evidence that such regulatory barriers are interfering with the nation’s economic growth, and with interstate commerce—“increasing income inequality by reducing less-skilled workers’ access to high-wage labor markets, and stifling GDP growth by driving labor migration away from the most productive regions.” (Toolkit at 2)

The Toolkit notes the conclusions of Jason Furman, Chair the President’s Council of Economic Advisors—based on important recent studies--that: (1) economic output is lost when the supply of workers to high-productivity regions is restrained; and (2) over time, this effect can be large enough to meaningfully reduce the nation’s overall economic output.

Although media coverage has largely focused on major metros on the West Coast (such as Los Angeles, the San Francisco Bay Area, and Seattle), and on the East Coast (such as Boston, New York City, and Miami), the Toolkit notes:

this problem is now being felt in smaller cities and non-coastal locations . . . .  Growing, dynamic cities like Atlanta, Denver, and Nashville used to be able to tout housing affordability as a key asset – but now see rents rising above the reach of many working families.  (Toolkit at 6)

The Toolkit explains how local housing barriers help perpetuate discrimination against low-income renters, increase homelessness and undercut the effectiveness of HUD’s housing assistance programs. (Toolkit at 11)

 

Action steps

Cities across the country are interested in revising their often 1950s-era zoning codes and housing permitting processes, and increasingly recognize that updating local land use policies could lead to more new housing construction, better leveraging of limited financial resources, and increased connectivity between housing to transportation, jobs and amenities. (Toolkit at 12)

The Toolkit notes that: (1) the President’s proposed FY 2017 budget for HUD includes $300 million to facilitate those cities’ success in modernizing their housing regulatory approaches; and (2) the U.S. Department of Transportation (DOT) has begun examining housing regulations of cities that apply for some DOT grants. (Id.) (Also, HUD recently upgraded its reporting requirements regarding such regulations for applicants for housing assistance grants. For more, click on HUD issues AFFH Rule.

In addition, the Toolkit discusses numerous action steps that some states and local jurisdictions already have taken to promote healthy, flexible, high-opportunity housing markets. Those steps include:

  1. More use of “by-right” zoning approval provisions for housing development, which allow projects “to be approved administratively when proposals meet local zoning requirements;” and preferably “relaxing restrictions related to density, building height, unit size, and parking minimums . . . .”
  2. Taxing vacant urban land and/or facilitating its transfer for redevelopment for needed housing or other productive uses.
  3. Streamlining post-approval housing permit processes and time frames.
  4. Reducing parking requirements for housing developments that include “affordable” units.
  5. Enacting high-density and multi-family zoning.
  6. Allowing accessory dwelling units.
  7. Establishing density bonuses.
  8. Using inclusionary zoning for residential development.
  9. Establishing development tax relief for builders who include “affordable” housing units.
  10. Using property tax abatements or exemptions for such buildings.

 

The Toolkit is essentially consistent with the views
of previous Administrations 

The White House Toolkit is the latest of numerous direct, Presidential initiatives to address with the growing problems. Among the other prominent, Presidential initiatives are: (1) the National Commission on Urban Problems (“Douglas Commission” (1969)), commissioned by President Johnson (Democrat)); and the Advisory Commission on Regulatory Barriers to Affordable Housing ((1991), commissioned by President George H. W. Bush (Republican)).

The Millennial Housing Commission appointed by the U. S. Congress likewise found exclusionary zoning to be a major impediment to housing affordability (2002). The federal Department of Housing and Urban Development (HUD) has provided extensive advice on the problems of barriers to housing development, and solutions for those problems. For example, since 2000 HUD has maintained an extensive Regulatory Barriers Clearinghouse of information on problems and solutions.

 

EHI reports have analyzed many of the issues raised by the Toolkit

and previous Presidential initiatives

Among EHI’s reports on the relevant issues are its:  

  • Analysis of mounting economic evidence that barriers to housing development area are a crucial cause of housing shortages and excessive housing prices. ECONOMIC EFFECTS OF EXCLUSIONARY HOUSING POLICIES (2010).
  • Letters printed by the Washington Post serious, adverse effects of local housing and land use policies in the Washington, DC, region. EHI LETTERS IN WASHINGTON POST(2010 and 2013).
  • Advisory for minority group members on the importance of local planning and zoning to their housing opportunities, and how to participate in those proceedings. See MINORITY GROUPS ADVISORY (2011).
  • Major report on role of governmental land use planning in housing shortages and excessive costs. EHI ANALYSIS OF JOBS-HOUSING REPORT (2013)
  • Analysis of evidence that state and local regulatory restrictions on housing supply are interfering with national economic growth and interstate commerce; and discussion of whether Congress has Constitutional authority to prohibit such effects on interstate commerce. INTERSTATE EFFECTS OF RBHAs (2014). 
  • Summary of how exclusionary housing policies aggravate housing problems that have been linked to adverse effects on children's health, educational achievement, and general cognitive and behavioral development. CHILDREN'S DEVELOPMENT & XHPs (2015). 
  • Analysis of major report by McKinsey Global Institute, which found that overcoming exclusionary housing policies is the most critical step in providing affordable housing in the United States and also around the world. McKINSEY REPORT ON MEETING GLOBAL HOUSING AFFORDABILITY CHALLENGE. (2015).
  • Summary of June 2015 decision by the U.S. Supreme Court that housing practices with disproportionate, adverse impact on minorities may violate federal Fair Housing Act, regardless of intent. See article on Home Page.
  • Report on new HUD rule, Affirmatively Furthering Fair Housing (July 2015), which requires greater consideration of exclusionary and other discriminatory housing conditions by federal housing fund recipients. HUD issues AFFH Rule (2015). 
  • Major report on Loudoun County, Virginia’s, housing needs related to its future Metrorail (commuter rail) stations. Loudoun County’s Metrorail-Related Housing Needs (2015). For an update, click on Loudoun Metrorail-area planning update--June 2016

 Again, to access the White House document itself, click on: https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Housing_Development_Toolkit%20f.2.pdf.