Local Tools to Address Housing Affordability

HOUSING AFFORDABLE, QUALITY, AND safe housing is the key to thriving communities and a top priority for local governments regardless of municipal size or socioeconomic composition. Existing housing prices are the highest in a decade and rents are increasing, exacerbating the economic hardship onset by the COVID-19 pandemic. Municipalities need every tool available to address the affordable housing crisis. Although local governments alone cannot solve every affordable housing barrier, local authority over land use and zoning provides an opportunity for cities, towns, and villages to improve access to housing now, without waiting for federal or state action.

This report serves as an update to the National League of Cities (NLC’s) 2019 report, Local Tools to Address Housing Affordability: A State-By-State Analysis, and explores how states and localities interact in several policy areas related to housing affordability. This 2022 analysis revisits two policies highlighted in the previous report and investigates four new policies related to housing affordability: single-family and multi-family restrictions, development incentives, Accessory Dwelling Units (ADUs), and land banks.

Increasing housing density, or the number of residential units designated to a building or area, is one of the most impactful ways that local governments can influence housing affordability. Unfortunately, multi-family housing (a high-density housing type) makes up only 15 percent of housing units in the US. This challenge, often referred to as “missing middle housing,” is a significant driver of affordability concerns. Missing middle housing especially impacts smaller households, single people, young adults, moderator low-income households, and other demographic groups who desire homeownership but cannot access, or want other options besides, single-family or high-rise housing.

Most states give municipalities the authority to determine the allowable housing types in their jurisdiction. In many places, static or inflexible zoning ordinances do not meet the needs of changing community demographics, leading to many municipalities limiting useful multi-family housing options (e.g., duplexes, courtyards, townhouses, triplexes, mixed-use developments, etc.) in favor of conventional single-family detached dwellings.

Housing density influences the overall aesthetic, demographics, resources, property values, and affordability of a neighborhood. While states hold the authority to regulate housing options, many states expand local authority by allowing municipalities to determine the specific housing types permitted in their jurisdictions. The broad flexibility of residential zoning laws has not met the new and evolving housing needs of residents. Instead, it has produced a landscape of predominantly low-density, single-family detached dwelling units that can exacerbate unaffordability, and increase costs to local governments.

Some state governments view municipalities as not taking aggressive enough action in reducing affordable housing barriers, leading states to set policy floors to address potential gaps. Other state governments are taking the opposite approach by preempting local ordinances aimed at fair and inclusive housing. In both cases, local control is being challenged and sometimes curtailed due to the current housing and homelessness crises. Changes to state and local housing density policies can increase multi-family housing investments, which can mitigate affordability challenges while providing pathways to homeownership for residents.

Higher-density housing’s efficient use of infrastructure relays cost savings to residents by spreading costs across numerous households, compared to low-density single-family development where fewer property owners share a larger portion of the costs. Single-family housing also requires more infrastructure for every household to have access to services. More piping infrastructure is necessary to connect every single-family house to water and sewer treatment plants under sprawl conditions, for instance. Higher-density housing is a compact development that facilitates more efficient use of public infrastructure services and household connections to local utilities.

To foster economic opportunity for all residents, it is critical to consider the equity, economic, social, and health implications of land use and zoning regulation changes, especially for residents of low-income status and/or Black, Indigenous, and People of Color (BIPOC) residents who are often excluded from or priced out of the housing market. Empowering communities with innovative tools to address housing affordability ensures that everyone has access to safe, stable, and affordable homes, fostering a brighter and more equitable future for all

Also Read: The Landscape of Middle-Income Housing Affordability in California