Key takeaways from the 2022 report by the National League of Cities, on how local governments can adopt various tools to address housing affordability.
The National League of Cities (NLC) comprises voices of America’s cities, towns, and villages, represented by local leaders. As an organization, NLC is strengthening local-level leadership and driving federal policy interventions. The report we have summarized below, serves as an update to their 2019 report, on Local Tools to Address Housing Affordability: A State-By-State Analysis. This update advances the conversation around local-level policy innovations which are furthering the cause of housing affordability and attempting to tackle this crisis across American cities.
How can local governments accelerate affordable housing development?
Local governments can play a major role in the field of affordable housing development but unfortunately, lack the authority, agency, and fiscal resources to do so. NLC has consistently advocated for governance to be strengthened at the local level, to have a greater impact on the lives of local communities. The report’s analysis finds that States should authorize, incentivize and encourage local governments to intervene in the following ways:
Facilitating “middle density” housing options - The problem of missing middle housing has been a pertinent issue in the affordable housing debate. Moving away from the detached single-family houses to include more equitable “middle density” housing options that are affordable to local communities, can optimize the use of limited space. These would include allowing the development of duplexes, townhomes, cottage courts, and more.
Removing regulatory barriers to Accessory Dwelling Units (ADUs) - Given ADUs add an extra unit of independent living space to a property, local governments are recognizing their utility in expanding affordable housing. ADUs create additional housing units without the need for up-zoning or extra government costs or subsidies and can accommodate multi-generational families. The development of ADUs should therefore be encouraged and facilitated by removing all regulatory barriers to the same.
Encouraging transit-oriented development (TOD) - This policy intervention refers to introducing TOD incentives and also advises local governments to encourage density bonuses, flexible design standards, accelerated approvals, by-right development, and more. Local governments can link TOD and affordable housing development in their planning requirements (e.g. Commonwealth of Virginia), and facilitate the creation of affordable, accessible communities.
Creating land banks to repurpose vacant properties for residential use - Depopulation has resulted in high vacancy rates in many towns and cities across the country. Land banks, which are government entities, can drive the redevelopment of abandoned properties in weak markets and facilitate new affordable housing development. If land banks partner with community land trusts (CLTs), they can reverse the trajectory of disinvestment in communities and create community-owned and managed affordable housing units.
Implementing state tax incentives for affordable housing development - To invite greater private sector investment in their communities, local level governments could introduce various tax incentives for developers to build quality affordable housing. Additionally, they could leverage federal incentives for the development of the same.
Creating and contributing to local and state housing trust funds - Local ordinances and state legislation can set up housing trust funds, which are publicly funded sources of affordable housing. These funds are administered at the local level and thereby, prioritize local needs which require flexible spending capabilities. Unlike federal subsidies, housing trust funds don’t come with restrictions that allow local governments to utilize these funds more conveniently, for local housing development.
How can local governments ensure racial equity in their policy interventions?
The intersection of housing and racism is a key concern across American cities and states. This is why the report acknowledges the need for rectifying the long-standing impact of redlining, restrictive covenants, discriminatory zoning, and other purposeful barriers to affordable housing access, for communities of color across the country.
The report, therefore, places a very strong emphasis on racial equity consideration across all the policy solutions recommended in the report. Here are some of the key recommendations on how to equitably implement the solutions mentioned above:
Local governments could provide down payments and closing cost assistance, pre- and post-housing counseling, and subsidies to housing costs for BIPOC and people of low-income status. This would unlock homeownership pathways for communities of color that continue to be impacted by the legacy of redlining.
By allowing for mixed-use development that incorporates green spaces and community spaces, physical and mental health disparities can be mitigated and a healthy living environment can be created for all residents.
Local and state leaders can run ADU awareness campaigns and/or financing support for residents of low-income status or BIPOC homeowners. Such programs can help inform those unaware, about how to build ADUs on their property and/or rent them out as a landlord for an additional income stream.
When building local housing trust funds, local leaders can target specific income groups, geographic areas and populations, for example, those experiencing homelessness or first-time homeowners.
Major findings of the report: which municipalities are doing well?
The study assessed various zoning restrictions, development incentives for parking and TODs, ADU regulations, land banking, state tax incentives, and housing trust funds for various municipalities. Here are the major findings from the report:
“Municipalities within California and Oregon experience the most preemption related to housing affordability and land use from their state government.
Municipalities within Connecticut, Florida, Hawaii, Maine, Massachusetts, and Pennsylvania have access to the most incentives related to affordable housing development.
Municipalities within Georgia, Maryland, Michigan, New York, Ohio, Tennessee, and Virginia have the most local control to address their communities’ housing affordability needs. Recent federal legislation provides local and state governments with an opportunity to make significant investments in housing and the infrastructure needed to support safe, healthy, and thriving communities.”
States and municipalities have to work together to leverage federal investments and tackle the affordability crisis when it comes to housing. Equity has to be at the forefront of all the policy interventions that are being recommended for local governments to implement. For more information, you can read the original report.
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