Local barriers in the way of new affordable housing

Affordable housing faces many barriers at the local level. Some are written into zoning and building codes that discourage new rental housing. Public forums can provide a platform for Not-In-My-Back-Yard opponents. And even in cities that have adopted rules supporting new rental housing, permit backlogs have delayed projects. Low-income renters have the most to lose from these policies.

Zoning laws and building codes have played a major role in limiting new rental housing. Many cities have zoned large portions of land only for single-family detached homes. This has played a historic role in racial and economic segregation, since low-income households are less likely to be able to buy a home. With less land devoted to multifamily rental buildings, cities have had to spread out to build new housing when their populations grow. This is one of the things that causes urban sprawl.

One city has taken steps to ramp up the production of rental housing by eliminating single-family zoning altogether. Facing an affordable housing crunch, the City of Minneapolis enacted sweeping zoning reforms that allowed duplexes and triplexes on all single-family lots. The changes also allowed new three- to six-story rental properties near public transit. The new policy also requires “inclusionary zoning” for new rental developments. New projects must set aside at least 10% of their units for moderate-income residents. The proposal also increased funding for affordable housing from $15 million to $40 million.

Zoning and building codes have been used a number of ways to limit affordable housing production, whether for renters or low-income homebuyers. Many suburbs have large minimum lot sizes for single-family homes. This makes buying a home more expensive because you have to buy more land. It also makes these neighborhoods less dense.

Building height restrictions are another way that cities have limited new rental housing. You can provide housing to more people on a piece of land if you can add more floors. But cities respond to local complaints that taller buildings will ruin the quality of life in their neighborhoods.

Local governments also use building codes to reinforce patterns of segregation. If the codes require homes and apartment buildings to have more expensive features, then it raises the cost of rent to more than what low-income renters can afford.

Requirements for off-street parking are one way that building requirements limit new affordable housing. Especially in larger cities where more people use public transportation, requiring lots of parking adds a large unnecessary cost. Buildings for seniors also do not need as many parking spaces since many residents will not have cars. The cost of buying land for parking or building underground lots can sink affordable housing proposals. In its sweeping zoning revision, Minneapolis also eliminated the minimum requirements for off-street parking so that this would not get in the way of new rental housing.

Low-income homebuyers face similar challenges from design requirements. Many suburban communities require new homes to be built with two-car garages. This requires larger lots and more construction materials, which increases the cost of a house.

I once visited a subdivision in Central California that was being built by Self-Help Enterprises (SHE). SHE is a nonprofit affordable housing organization serving California’s Central Valley. SHE helps low-income renters become homeowners through its mutual self-help homeownership program. Participants receive subsidized mortgages and do 65% of the labor building their homes. They typically build in groups from 8 to 10 families, and no one moves in until all the homes are done.

I was looking at a row of new homes, some still waiting for their grass to be planted. Although they were small, they all had two-car garages. When I asked why these modest houses had such large garages, the construction manager told me that the local government required them. SHE, however, had designed the homes so that part of the garage could be enclosed and made into an extra bedroom or family room. Since the clients were helping build their own homes, they had the construction skills to close it in themselves later.

The building permit process can also delay or sidetrack rental projects. Permit fees can be extremely high. Projects serving upper-income renters can charge higher rents to cover these fees, but developers proposing affordable rentals often find them a burden. San Francisco is one city that has waived permit fees for affordable housing projects and accessory dwelling units to speed up their development.

The permit review process can also take a long time. It is common for city staff to ask for changes in a project proposal to meet building and safety codes. Every time a change is requested, it adds to the project’s costs. In many cases, developers are asked to make changes at different stages of the review. This process can drag permit reviews out for a year or more in some places. The developers have to pay more fees to architects and other consultants for each change, and more interest on their project financing.

Most local governments require some kind of public input on development proposals. Project proposals get a public hearing where residents can learn about the project, ask questions, and express support or opposition. This could be before a zoning board, design review board or city council meeting. Affordable rental projects often face fierce Not-In-My-Back-Yard (NIMBY) opposition at these public hearings. Even when project proposals meet zoning and building code requirements, strong opposition at public meetings can push officials to deny permit applications.

An example of how this kind of opposition derailed a project can be found in the wealthy suburb of Lafayette, California. California’s state government has made new housing a priority, and has laws that allow some communities to be sued because they have not allowed new housing development. At a time when California needs to create 3.5 million new homes by 2025, residents of Lafayette have delayed a 315-unit rental housing project since 2012. The project met all zoning and building code requirements. Even though it was being built as market-rate housing, not affordable units for low-income renters, Lafayette residents were loud in their opposition.

Opponents rarely say they oppose rental projects because it would mean more low-income or minority neighbors. Lafayette officials instead received comments in writing and public meetings like, “too aggressive,” “not respectful,” “embarrassment,” “outraged,” “audacity,” “very urban,” “deeply upset,” “unsightly,” “monstrosity,” “inconceivable,” “simply outrageous,” “vehemently opposed,” “sheer scope,” “very wrong,” “blocking views,” “does not conform,” “property values will be destroyed,” and “will allow more crime to be committed.” The project has still not yet received a building permit.

Even when cities support affordable housing development, the permit review process can pose problems. Seattle has adopted inclusionary zoning measures that allow new housing in taller buildings in key areas of the city. The Seattle area is short 156,000 units of affordable housing. Developers have responded to the opportunity, but city staff cannot keep up with the growth in permit applications. There is now a backlog that has delayed permit approvals by months.

Permit approval for Seattle projects with design review averaged 316 days in 2014, but grew to an average of 519 days by 2019. Outside of downtown, the time to receive a land-use permit increased by 60% between 2014 and 2019. The delays are costly. According to the Seattle Times, for every two-month improvement in the speed of permitting, $4,000 per unit is saved in interest, consultants and the cost of construction. 

Other cities are also dealing with permit backlogs. San Francisco changed its zoning three years ago to promote the development of accessory dwelling units (ADUs, also called “mother-in-law” units). Making it easier to add ADUs to existing buildings can add thousands of units to a city’s market, without having to secure new land and develop large projects. When Mayor London Breed found a backlog of over 900 permit applications, he ordered city staff to expedite the review of ADU applications. ADU applications had been handled on a case-by-case basis in the past, but city staff created a set process for all ADU permits. The mayor announced that six months after his directive, the city had cleared the backlog.

Understanding how these obstacles limit new projects can help low-income residents push for more rental housing in their communities. Public forums are for everyone, not just those that want to keep affordable housing out. All residents can write to their mayors and city councils. As more low-income renters participate and raise their voices, cities are starting to change their rules for building more affordable housing.