HOUSING DATA AND POLICY SNAPSHOT
State and Local Government Responses to the Housing Crisis
In December 2018, Minneapolis made headlines by becoming the first major U.S. city to eliminate single-family only zoning by allowing duplexes and triplexes in areas that previously only allowed single-family homes. Accompanied by other reforms, such as enacting inclusionary zoning laws, upzoning along transit corridors, and eliminating mandatory parking minimums, this package of reforms was intended to tackle deep-rooted issues within the city’s housing system, including racism, segregation, high costs, underproduction, and sprawl.
These problems are not unique to Minneapolis. As the nation’s housing crisis has worsened in recent years, state and local governments across the country have demonstrated more willingness to evaluate policies and pass reforms aimed at addressing the housing challenges within their own communities. Most of these policies attempt to bolster the supply of housing, increase the diversity of housing types, and/or reduce the cost of housing. Some of the most common reforms include:
- Increasing allowable residential density,
- Legalizing accessory dwelling units (ADUs),
- Reducing or eliminating minimum parking requirements,
- Enacting inclusionary zoning,
- Streamlining building permits and fees,
- Providing design guidance, and
- Raising bonds and/or taxes to support affordable housing funds.
The remainder of this snapshot describes examples of each of these reforms from states and municipalities around the country. In some cases, the reforms inventoried here were enacted in locations with political and/or legal frameworks that differ from those found in Greater Philadelphia. Nonetheless, these examples can help inform more productive conversations around housing and may even serve as inspiration for local policymakers, advocates, and other stakeholders attempting to respond to housing challenges in their own communities.
Increasing Allowable Residential Density
Following in the footsteps of Minneapolis, many governments have taken aim at boosting residential density by permitting “missing middle” and multifamily housing in areas previously reserved exclusively for single-family detached homes. Missing middle housing refers to residential structures that fall somewhere between single-family and mid-rise apartment buildings, including, but not limited to, townhomes, duplexes, triplexes, and cottage clusters. Missing middle housing types are sometimes referred to as “gentle density” because they can provide additional units in neighborhoods primarily composed of single-family homes without radically changing the character of these areas.
In 2019, Oregon passed HB 2001, which legalized the construction of duplexes in all single family zones in cities with populations of at least 10,000. The same bill legalized duplexes, triplexes, fourplexes, and cottage clusters in all single-family zones in cities with more than 25,000 residents. In 2021, California passed SB 9, also known as the HOME Act. This legislation allows most homeowners to build two separate homes or a duplex on a single-family plot and, in some cases, allows for single-family lots to be split for the construction of two additional homes. Meanwhile, Massachusetts passed a multi-family zoning law in 2021 that requires all cities and towns served by the Massachusetts Bay Transit Authority (MBTA) and their adjacent communities to develop at least one multi-family zoning district within a half mile of a transit stop.
At the local level, cities as diverse as Berkeley, California, and Charlotte, North Carolina, eliminated single-family only zoning in 2021, while Tacoma, Washington, approved a plan that same year to re-classify its housing types into “low-scale” and “mid-scale” residential, effectively ending single-family exclusive zones within the city. In August 2022, Spokane, Washington, began piloting temporary zoning that allows duplexes, triplexes, and fourplexes citywide, as well as townhomes on all residential lots, while the city explores permanent plan and code changes to expand housing choice.
Rochester, Minnesota, adopted a new development code in September 2022 that reduces the minimum lot size of many residential districts throughout the city, allows mixed-use housing in commercial areas, and modifies setbacks and floor-area-ratio (FAR) regulations to encourage missing middle housing development. Similar upzoning efforts have also been undertaken in the last year in Decatur, Georgia, and Raleigh, North Carolina.
Legalizing Accessory Dwelling Units (ADUs)
Accessory dwelling units (ADUs) are small houses or apartments located on the same property as a detached single-family home. These smaller, secondary homes provide the basic requirements of heating, cooking, and sanitation and come in a variety of shapes and sizes. These units can be attached to the main house (like a granny flat), separate from it (like a backyard bungalow), or incorporated into a garage. ADUs are lauded for their ability to discreetly fit into a variety of locations and the flexibility they offer homeowners to provide a home for relatives, create a place for a caregiver to stay, or simply earn extra income from renting to a tenant.
Over the last two decades, several states and hundreds of cities and counties have taken steps to enable or encourage the construction of ADUs. For example, in October 2019, California passed AB 68, which legalizes the widespread construction of ADUs across the state. Taking inspiration from the Golden State’s policy, the New York State Legislature began to consider SB S4547A in 2022 which, if passed, would legalize existing and new ADUs statewide.
Just since 2021, local ordinances have made ADUs newly legal in all residential areas in the cities of Alexandria, Virginia; Anchorage, Alaska; Cincinnati, Ohio; Kansas City, Missouri; Laramie, Wyoming; Louisville, Kentucky; Madison, Wisconsin; Richmond, Virginia; Salt Lake City, Utah; South Portland, Maine; and Tucson, Arizona.
Despite these efforts, some communities are finding that simply legalizing ADUs is not enough. Researchers point out that a variety of barriers have prevented ADUs from being even more widely used. Local regulations often make building ADUs a complicated process, and homeowners may have difficulty identifying financing, securing a construction team, and acting as a landlord. Communities and organizations seeking to leverage the benefits of ADUs may need to consider ways that they can ease the process for homeowners and increase ADU financing tools.
Reducing or Eliminating Minimum Parking Requirements
While it may not seem like it, parking spaces cost a lot of money to build, from $20,000 per spot in a surface lot to more than $60,000 per spot in an underground garage. Because these costs are bundled into the price of a finished development, requiring developers to provide parking makes it more expensive to buy or rent new housing. Parking also takes up a lot of space that could be used for more housing, especially in transit-rich neighborhoods where residents may not need to drive as much in their daily lives. Simply put, mandating a high minimum number of parking spaces for new developments limits housing supply and increases the price of units that do get built. In fact, two cities that have recently removed parking mandates—Buffalo and Seattle—found that the majority of new homes permitted after the change would have been illegal to build under their prior codes.
Thus, it is not surprising that parking reforms have been among the most numerous and widespread policies enacted to address the housing crisis. South Bend, Indiana, for example, made parking optional for all new homes and business developments in January 2021. That same month, Berkeley, California, removed minimum parking mandates for all residential uses in most neighborhoods. In May 2021, Richmond, Virginia, eliminated parking minimums and, six months later, San Diego, California, approved a zoning change that eliminates minimum parking requirements for building owners and commercial tenants in transit priority neighborhoods and commercial neighborhoods. The entire state of California followed suit in September 2022 by banning cities from requiring new developments built near public transit to set aside space specifically for parking. A month later, Cambridge, Massachusetts eliminated minimum parking requirements. Finally, in November 2022, Nashville, Tennessee, turned its old parking minimums into parking maximums in its Urban Zoning Overlay areas, most of which lie within a quarter mile of the city’s bus service. Parking maximums have also recently been instituted in Raleigh and Gastonia, North Carolina, and South Burlington, Vermont. Other jurisdictions to abolish parking minimums entirely include Albemarle, North Carolina; Jackson, Tennessee; Lexington, Kentucky; and San Jose, California.
Enacting Inclusionary Zoning
Inclusionary zoning (or inclusionary housing) refers to the practice of requiring developers to sell or rent a certain portion of units in their new residential buildings to lower-income residents. In exchange, many cities offer developers incentives such as height and density bonuses, parking reductions, or tax abatements. Some cities may allow developers to pay a fee or construct affordable units off-site instead of including them in their current development.
Inclusionary zoning was first developed in the 1970s, but this approach has been the subject of renewed interest in recent years. In March 2021, Washington, DC, approved the “IZ Plus” expansion of its existing inclusionary zoning program, which increased the percentage of units that qualifying residential developments must designate as affordable from 8-11 percent to 10-20 percent. A year later, the City of Philadelphia passed an inclusionary zoning ordinance requiring any new residential building of 20 units or more in City Council District 3 or 7 to set aside 20 percent of units for affordable housing. On the other side of Pennsylvania, Pittsburgh expanded its existing inclusionary zoning policy to two new neighborhoods. This policy requires that 10 percent of units in housing developments with 20 or more units be affordable to renters making 50 percent of Area Median Income (AMI) and owners making 80 percent AMI.
Further west, Denver passed its Expanding Housing Affordability Policy in June 2022, which mandates that developers building multifamily projects with 10 or more units maintain between 8-15 percent of units as income-restricted housing for households making between 60 percent and 90 percent AMI for 99 years, or pay in-lieu fees or other negotiations.
Inclusionary zoning is not without its critics. Although advocates for inclusionary zoning view it as a way to increase the supply of affordable homes at little cost to the public, some critics contend that inclusionary zoning policies simply amount to a tax on new development that actually reduces the overall supply of housing, thus raising prices.
Streamlining Building Permits and Fees
Communities have also been streamlining permitting processes and reducing fees for affordable housing developments to make them cheaper and easier to build. At the beginning of 2022, the New York State Legislature began to consider SB S7635 which, if passed, would require any town where less than 10 percent of housing stock is below market rent to allow qualifying affordable housing to go through a special streamlined approval process. Meanwhile, in June 2022, South Bend, Indiana, announced an initiative to remove charges for connecting any new development to existing water and sewer services with five or fewer units, or a housing development with more than five units that is financed by Low Income Tax Credits or built by a nonprofit. Finally, Los Angeles updated its zoning code in July 2023, exempting all affordable housing units from the Site Plan Review process.
Providing Design Guidance
Some municipalities have proactively released design guides to help developers build missing middle and infill housing typologies that are consistent with existing zoning regulations. For example, Norfolk, Virginia, approved the Missing Middle Pattern Book in 2021, which provides free architectural plans for one-, two-, and three-bedroom units that can easily be mixed into existing housing. In August 2022, South Bend, Indiana, released a catalog of pre-approved residential building plans that developers can use free of cost. The measure was aimed at supporting neighborhood infill and the construction of middle-scale housing options.
Raising Bonds and/or Taxes to Support Affordable Housing Funds
The 2022 election season was full of ballot measures aimed at increasing government funding for affordable housing in cities and states around the country. Voters in Austin, Texas; Palm Beach, Florida; Columbus, Ohio; Kansas City, Missouri; Charlotte, North Carolina; and Asheville, North Carolina, approved municipal affordable housing bonds of various sizes. A majority of Los Angeles voters supported a measure that would allow the city to collect extra tax revenue on residential and commercial property sales that exceed $5 million, which would then go toward the construction of affordable housing, emergency rent subsidies, and services for people at risk of homelessness. In Colorado, voters approved a proposition to dedicate 0.1 percent of state income tax revenue for affordable housing programs.
Combining Strategies
None of the policy reforms discussed here will solve a community’s affordability crisis on its own. However, some of these strategies may make sense as part of a community’s effort to more comprehensively plan for its housing needs.
Following Minneapolis’s lead, several jurisdictions have passed legislation packages that incorporate several strategies. In March 2019, for example, Utah passed SB 34, which requires cities to make a plan to increase housing affordability and construction or risk losing state highway funding. The specifics of the plan were left up to individual municipalities with the stipulation that they would have to adopt at least three policies from a larger menu of housing reforms, including starting community land trusts, purchasing and preserving existing affordable units, permitting ADUs, lowering parking requirements, legalizing single room occupancies, reducing minimum lot sizes, and encouraging conversion of unused retail strips into mixed-use residential housing.
In August 2020, Portland, Oregon, passed the Residential Infill Project, which changed the city’s zoning code to allow housing structures like duplexes, triplexes, and fourplexes in more neighborhoods, and provided more flexible rules on how homes could be configured. The project also removed off-street parking requirements in single-dwelling zones. That same year, Cambridge, Massachusetts, passed its 100 Percent Affordable Housing Overlay (AHO) Ordinance, which is designed to reduce barriers to affordable housing development. Within AHO areas, it allows for “as-of-right” construction of affordable housing that can be taller, denser, and subject to fewer parking, open space, and lot coverage requirements than buildings outside of the overlay. San Diego’s “Homes for All of Us” legislative package, passed in March 2022, instituted seven new housing incentive programs, including one for transit-oriented development. The newly adopted Unified Development Ordinance in Charlotte, North Carolina, went into effect in June 2023, allowing duplex and triplex development on single-family land throughout the city and easing construction regulations for ADUs.