Local tools to address housing affordability 2022

Local tools to address housing affordability 2022

Summary of the 2022 NLC report

By: Sumedha Bose, Builders Patch Staff

SUMMARY

Key takeaways from the 2022 report by the National League of Cities, on how local governments can adopt various tools to address housing affordability.

Background

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 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 across American cities.

How can local governments accelerate affordable housing development?

Local governments can play a major role in affordable housing development but unfortunately often lack the authority, agency, and fiscal resources to do so. NLC has consistently advocated for governance to be strengthened at the local level for greater impact on 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 issue of missing middle housing has been salient in the affordable housing debate. Shifting from detached single-family homes to more equitable “middle density” housing options can optimize limited space. These include duplexes, townhomes, cottage courts, and more.

• Removing regulatory barriers to Accessory Dwelling Units (ADUs)
  ADUs add an extra unit of independent living space to a property, recognized by local governments for their value in increasing affordable housing. ADUs create additional units without up-zoning or additional government costs, accommodating multi-generational families.

• Encouraging transit-oriented development (TOD)
  This policy intervention involves introducing TOD incentives and advising local governments to promote density bonuses, flexible design standards, and accelerated approvals. Local governments can integrate TOD and affordable housing development in their planning requirements.

• Creating land banks to repurpose vacant properties for residential use
  With high vacancy rates in many towns and cities, land banks can aid in redeveloping abandoned properties and facilitating new affordable housing. Collaborating with community land trusts (CLTs) can reverse disinvestment trends in communities.

• Implementing state tax incentives for affordable housing development
  Local governments could introduce various tax incentives to attract private sector investment in affordable housing initiatives.

• Creating and contributing to local and state housing trust funds
  Housing trust funds are publicly funded sources of affordable housing, managed locally to prioritize needs for flexible spending capabilities.

How can local governments ensure racial equity in their policy interventions?

The report stresses the importance of addressing the intersection of housing and racism in policy-making. Here are key recommendations on promoting equity:

• Providing down payments and closing cost assistance, pre- and post-housing counseling, and subsidies to housing costs for BIPOC and low-income communities.

• Allowing for mixed-use development that incorporates green spaces and community spaces to promote health and well-being among residents.

• Running ADU awareness campaigns to support low-income and BIPOC homeowners, informing them about building ADUs on their property.

• Targeting specific income groups and geographical areas in housing trust fund initiatives.

Major findings of the report: which municipalities are doing well?

The study assessed various zoning restrictions, development incentives, and regulations for different municipalities:

• Municipalities in California and Oregon face the most state preemption regarding housing affordability and land use.

• Municipalities in Connecticut, Florida, Hawaii, Maine, Massachusetts, and Pennsylvania have the best access to incentives for affordable housing development.

• Georgia, Maryland, Michigan, New York, Ohio, Tennessee, and Virginia have significant local control to address housing affordability needs.

Conclusion

States and municipalities must collaborate to leverage federal investments and tackle the housing affordability crisis. Equity must be prioritized in all policy interventions recommended for local governments.