High housing costs and inadequate supply are not a natural outcome of market forces, but the result of policy choices. In the U.S., public housing development relies on private developers who are bound by restrictions on the location, size, and funding for new projects. Zoning laws determine the purposes for certain lots of land, and ultimately where new developments can be built. Each zone’s purpose and rules are determined by local governments, making zoning an essential factor in the creation of affordable housing. 

Context

  • The Faircloth Amendment of 1937 sets a limit on the number of public housing units a Public Housing Agency owns, assists or operates, with federal funding. The current limit was established in 1999 in reaction to the perceived failure of the public housing program. PHAs are organizations that oversee and maintain public housing complexes. They often do not reach their Faircloth limits due to a lack of federal funding.
  • An economically efficient housing market should have high-density housing near public transit and in areas with good schools, low crime, etc, as a high number of units on an expensive lot of land results in a lower cost per unit and can accommodate more households. 

Inclusionary Zoning

Zoning laws can be helpful in creating opportunities for affordable development and economic mobilization. Inclusionary zoning requires and incentivizes a certain percentage of units in new developments to be affordable, and ties the development of affordable housing to the development of market-rate housing and guarantees that benefits are accessible to households along a range of incomes. Projects that implement inclusionary zoning near public transit and job centers can expand economic opportunity for low-income households. In addition, local zoning regulations can enable vulnerable communities to push back against projects that would harm them, such as urban renewal or highways.

Exclusionary Zoning

On the other hand, zoning laws can also be socioeconomically exclusive and societally inefficient. Those in favor of zoning reform argue that changing the rules of housing development to require moderately priced housing in high-opportunity areas is essential for more equitable, resilient, and thriving communities. For instance, zoning that does not mandate affordable development in high-value areas, especially places with good transit, leads to higher costs of living for the lowest-income households. This also causes negative externalities such as worsened traffic and harmful environmental impacts. 

Impact on Developers

In many cases, zoning is a barrier for developers who want to create affordable housing. When left to local jurisdictions, cities tend to only subsidize projects in specific areas where the need for affordable housing is most significant. This limits location options for developers who want to use housing subsidies, such as the Low-Income Housing Tax Credit, which is essential to the development process. Local governments also have complicated development processes that favor community preferences over affordable expansion which prevent low-cost, high-density development, especially in affluent neighborhoods with high land values. In desirable markets, developers are often faced with community opposition to new development or rezoning. In the end, the high costs associated with land acquisition and construction make catering to affluent renters the best opportunity for developers to make a profit which has caused affordable development to be neglected in many U.S. cities.

Impact on Homeowners and Renters

When restrictions force affordable housing away from high-value land areas with good transit, high economic opportunity and low crime, poorer households are kept from advancing economically. Limited housing near job centers leads more workers to undertake long-distance commutes, which is infeasible as many households may not own cars. Many low-income workers rely on public transportation, which is not accessible away from city centers. Exclusionary zoning practices such as redlining have also caused racial and economic divides in cities.

Reflection Questions

  • How can local governments balance the preferences of their community with inclusive practices?
  • How can your community include and promote more affordable development?
  • How can federal, state, and local funding ease the affordable construction process for developers?

Loading

Share this post

Give feedback on this brief: