Urban Land Institute headquarters in Washington, DC

WASHINGTON, DC—More than 11 million US households are severely cost burdened, paying half or more of their income for housing, says the Urban Land Institute, citing the latest study on affordability from the Joint Center for Housing Studies at Harvard University. Their ranks are expected to swell by another 1.3 million households over the next decade. To help stem the tide of economic burden, a new report from ULI advocates closer partnerships between states and cities.

“At a time when states and cities are often at odds over hotly contested social and economic issues, land use reforms that expand housing choices and opportunities can constitute common ground,” says Stockton Williams, principal author of the report and executive director of ULI's Terwilliger Center for Housing, which published the report. “State and local collaboration on housing can create a lower cost of doing business, a more efficient real estate market and a wider array of options for buyers and renters across the income spectrum.”

The report proposes five ways in which states can help cities and counties promote housing development, primarily through their land use powers. They include the following:

Ensure that localities and regions are assessing their housing needs for the future. “Because many communities do not analyze their housing needs or assess the importance of housing to economic growth, states should establish and enforce workable standards,” according to ULI.
Provide local communities with incentives to zone for new housing. “Zoning often needs to be modified to allow for and encourage development of needed new housing. States can support communities' efforts with financial and technical assistance.”
Reduce regulatory requirements that increase costs and stifle development. ULI says that states can use their authority and creativity to cut the regulatory red tape that makes housing more expensive than it has to be.
Authorize cities to invest their own resources linked to pro-housing land use. Even with appropriate zoning, local jurisdictions often need state approval to offer their own incentives for construction of below-market rate housing.
Enable local communities to overcome unreasonable neighborhood opposition. “Community opposition can drive up the cost of—or completely derail—the construction of new housing,” ULI says. States can provide mechanisms to moderate NIMBY opposition and make it easier to build housing needed to support local growth.

An example of a state program that has pushed back against NIMBY-ism is Massachusetts' Comprehensive Permitting and Zoning Appeal Law. Dating back the late 1960s, the law allows developers to bypass local review processes for projects with specified minimum levels of affordable housing. It's estimated that more than 68,000 housing units, 35,000 of which are affordably priced, have been developed statewide as a result of this law, according to the ULI report.

Another Massachusetts law, the Smart Growth Zoning Overlay District Act, has spurred development of more than 3,300 housing units, with over 1,000 more in the pipeline. In Connecticut, the Incentive Housing Zones program, which provides municipalities with technical assistance and financial incentives, has helped create about 1,700 housing units. California is aiming to lower the cost of developing affordable housing via parking reduction and accessory dwelling unit laws.

ULI's report describes a Washington state law that allows cities to exempt rental or owner-occupied multifamily properties in designated areas from property taxes for eight to 12 years. And there's Utah's Neighborhood Development Act, which permits use of tax increment financing for redevelopment activities, requiring a 20% allocation toward affordable housing for certain types of projects.

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Five Steps to Promoting Affordable Housing

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